[Federal Register Volume 74, Number 3 (Tuesday, January 6, 2009)]
[Notices]
[Pages 473-474]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-31413]


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POSTAL REGULATORY COMMISSION

[Docket No. ACR2008; Order No. 161]


FY 2008 Annual Compliance Report; Comment Request

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is establishing a docket for consideration of 
the Postal Service's compliance with statutory provisions pertaining to 
costs, revenues, rates, and quality of service. The Postal Service's 
recently-filed FY 2008 report forms the basis for consideration. The 
public is invited to comment.

DATES: Comments are due January 30, 2009. Reply comments are due 
February 13, 2009.

ADDRESSES: Submit comments electronically via the Commission's Filing 
Online system at http://www.prc.gov.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
202-789-6820 and [email protected].

SUPPLEMENTARY INFORMATION: Section 3652 of title 39 of the United 
States Code requires the Postal Service to file a report with the 
Postal Regulatory Commission on the costs, revenues, rates, and quality 
of service associated with its products within 90 days after the close 
of each fiscal year. That section requires that the Postal Service's 
annual report be sufficiently detailed to allow the Commission and the 
public to determine whether the rates charged and the service provided 
comply with all of the requirements of title 39. See 39 U.S.C. 
3652(a)(1) and (e)(1)(A). The Postal Service filed its annual 
compliance report for FY 2008 with the Commission on December 29, 2008. 
Appended to it are four major sets of data: (1) The Cost and Revenue 
Analysis (CRA); (2) the International Cost and Revenue Analysis (ICRA); 
(3) the models of costs avoided by worksharing; and (4) billing 
determinant information.\1\
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    \1\ United States Postal Service FY 2008 Annual Compliance 
Report, December 29, 2008 (FY 2008 ACR). Public portions of the 
Postal Service's filing are available at the Commission's Web site, 
http://www.prc.gov.
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    After receiving the FY 2008 ACR, the Commission is required under 
39 U.S.C. 3653 to provide an opportunity to comment to the interested 
public and an officer of the Commission to represent the interests of 
the general public. A public representative (officer of the Commission) 
will be designated in a subsequent notice to be issued in the near 
future. The Commission hereby solicits public comment on the degree to 
which the Postal Service's operations and financial results comply with 
the policies of title 39. Comments by interested persons are due on or 
before January 30, 2009. Reply comments are due on or before February 
13, 2009. After completing its review of the FY 2008 ACR, public 
comments, and any other information submitted in this proceeding, the 
Commission will issue an Annual Compliance Determination (ACD).
    The Commission is aware that the comment periods in annual 
compliance report proceedings are brief when one considers the 
complexity of the issues involved. However, the statute affords the 
Commission 90 days to digest the report filed by the Postal Service and 
evaluate the Postal Service's compliance with the broad range of 
policies articulated in title 39. Expediting public comment is 
essential if the Commission is to have sufficient time to take the 
public's concerns into account in making its evaluation.
    This is the second compliance report filed by the Postal Service 
since passage of the Postal Accountability and Enhancement Act (PAEA) 
of 2006. The first compliance report was filed on December 28, 2007, 
and covered FY 2007. FY 2007 was a transitional period during which the 
rate-setting criteria of the former Postal Reorganization Act (PRA) 
remained in force. The fact that FY 2007 was a transitional period 
presented the Postal Service with a difficult task.\2\ The Commission 
therefore reviewed the Postal Service's rates and service under the 
standards of the PAEA with due regard for the ``unique and non-
recurring factors'' confronted by the Postal Service and with 
appreciation for ``the good faith effort of the Postal Service to 
provide useful available information. * * * Id. The Commission stated 
that ``[i]n future years, when the Postal Service has the benefit of * 
* * rules [keyed to the evaluation of the PAEA's standards], a more 
rigorous level of scrutiny will be more justifiable.'' Id.
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    \2\ Included among the difficulties faced by the Postal Service 
was the fact that it ``[did] not have experience producing annual 
cost, revenue, and volume figures so quickly after the close of the 
fiscal year.'' FY 2007 ACD at 9. In addition, many of the Postal 
Service's products ``did not have service standards and service 
measurement procedures in effect during FY 2007.'' Id. at 8. The 
rates that were charged during FY 2007 were also established under 
similar, but different, policies of the PRA. Id.
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    The Postal Service states that although the transition issues are 
``less acute'' this year, some still remain. As an example, the Postal 
Service points to the fact that the lists of market dominant and 
competitive products in the Mail Classification Schedule were not 
finalized until after the start of FY 2008. Moreover, the Postal 
Service notes that final rules governing the form and content of the 
annual compliance report have not yet been issued.\3\
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    \3\ On August 28, 2008, the Commission instituted a rulemaking 
proceeding in which it proposed periodic reporting rules to 
implement all of the PAEA's provisions intended to make the Postal 
Service's operations and finances transparent and accountable. 
Docket No. RM2008-4, Notice of Proposed Rulemaking Prescribing Form 
and Content of Periodic Reports, August 22, 2008. The Commission is 
reviewing the initial and reply comments submitted in that 
proceeding.
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    Among the materials submitted by the Postal Service as part of its 
filing is a document identified as USPS-FY08-9 which serves as a 
roadmap summarizing other materials submitted as part of the FY 2008 
ACR and discussing changes in methodologies from the Commission's 
methodologies in the FY 2007 ACD.
    The Postal Service states that the major sets of materials and the 
formats in which they are presented should be familiar to the 
Commission and those persons who have participated in earlier postal 
rate proceedings. The one

[[Page 474]]

significant change is that certain materials previously presented in 
one version containing both market dominant and competitive product 
information have been split into public and non-public versions.\4\
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    \4\ Part V of the FY 2008 ACR identifies the materials that it 
has included in the non-public annex to its filing and the rationale 
for its actions.
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    In general, most of the analytical methods employed in producing 
the FY 2008 ACR appear to be consistent with established precedent or 
have been approved by the Commission.\5\ A discussion of methodology 
changes can be found in Section Two of the roadmap document, USPS-FY08-
9, and in the preface that accompanies each of the FY 2008 ACR's 
appended materials.
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    \5\ Subsequent to the issuance of the Commission's FY 2007 ACD, 
the Postal Service submitted 13 proposals for change to the costing 
methodologies for the FY 2008 ACR. Twelve of these 13 proposals have 
been addressed by the Commission in the following orders: Order No. 
115, Order Accepting Certain Analytical Principles For Use in the 
Postal Service's Periodic Reports, October 18, 2008 (addressing 
Proposals One through Ten); Order No. 118, Order Concerning Costing 
Methods Used in Periodic Reporting (Proposals Ten And Eleven), 
October 22, 2008; and Order No. 156, Order Concerning Costing 
Methods Used in Periodic Reporting (Proposal Thirteen), December 23, 
2008. Proposal Twelve is still being considered by the Commission in 
Docket No. RM2009-1.
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    Section 3652(g) of title 39 requires that the Comprehensive 
Statement of Postal Operations (Comprehensive Statement) mandated by 39 
U.S.C. 2401(e) be included in the Postal Service's annual compliance 
report. The Postal Service indicates that its FY 2008 Comprehensive 
Statement is currently available on the Postal Service's Web site at 
http://www.usps.com/strategicplanning/cs08/cs2008.pdf.\6\
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    \6\ Notice of the United States Postal Service Regarding the FY 
2008 Comprehensive Statement, December 30, 2008.
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    It is Ordered:
    1. The Commission establishes Docket No. ACR2008 to consider 
matters raised by the Postal Service's FY 2008 Annual Compliance 
Report.
    2. Public comments on the United States Postal Service FY 2008 
Annual Compliance Report are due on or before January 30, 2009.
    3. Reply comments on the United States Postal Service FY 2008 
Annual Compliance Report are due on or before February 13, 2009.
    4. The Secretary shall arrange for publication of this Order in the 
Federal Register.

    By the Commission.
Steven W. Williams,
Secretary.
 [FR Doc. E8-31413 Filed 1-5-09; 8:45 am]
BILLING CODE 7710-FW-P