[Federal Register Volume 74, Number 7 (Monday, January 12, 2009)]
[Notices]
[Pages 1263-1264]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-290]


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POSTAL REGULATORY COMMISSION

[Docket Nos. MC2009-14 and CP2009-20; Order No. 164]


International Mail Contracts

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is noticing a recently-filed Postal Service 
request to add International Business Reply Service (IBRS) to the 
Competitive Product List. The Postal Service has also filed a related 
contract. The notice invites public comment and addresses routine 
procedural matters. In addition, it directs several questions to the 
Postal Service.

DATES: Postal Service responses to questions identified in this notice 
are due January 12, 2009. Comments are due January 16, 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:

I. Introduction

    On December 24, 2008, the Postal Service filed a formal request 
pursuant to 39 U.S.C. 3642 and 39 CFR 3020.30 et seq. to add 
International Business Reply Service Contract 1 to the Competitive 
Product List.\1\ The Postal Service asserts that the new International 
Business Reply Service Contract 1 product is a competitive product 
``not of general applicability'' within the meaning of 39 U.S.C. 
3632(b)(3). Request at 1. The Request has been assigned Docket No. 
MC2009-14.
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    \1\ Request of the United States Postal Service to Add 
International Business Reply Service Contracts to the Competitive 
Products List, and Notice of Filing (Under Seal) Contract and 
Enabling Governors' Decision, December 24, 2008 (Request). The 
Postal Service proposes to call this new product ``International 
Business Reply Service Contracts.'' In this Notice, the Commission 
proposes to slightly alter that proposed name to ``International 
Business Reply Service Contract 1'' to provide for the possibility 
that more than one type of International Business Reply Service 
contract may exist in the future that is not functionally or 
substantially equivalent to the proposed Docket No. CP2009-20 
contract. This may occur even though other future contracts may meet 
the parameters set by the Governors' Decision No. 08-24.
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    The Postal Service contemporaneously filed a contract related to 
the proposed new product pursuant to 39 U.S.C. 3632(b)(3) and 39 CFR 
3015.5. The contract has been assigned Docket No. CP2009-20.
    Request. The Request incorporates (1) A statement of supporting 
justification as required by 39 CFR 3020.32, (2) a redacted version of 
the Governors' Decision authorizing the new product; (3) requested 
changes to the Mail Classification Schedule; and (4) a certification of 
compliance with 39 U.S.C. 3633(a).\2\ Substantively, the Request seeks 
to add International Business Reply Service Contract 1 to the 
Competitive Product List. Id. at 1-2.
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    \2\ Attachment 1 consists of a statement of supporting 
justification for this Request. Attachment 2 is the redacted 
Decision of the Governors of the United States Postal Service on 
Establishment of Prices and Classifications for International 
Business Reply Service (IBRS) Contracts (Governors' Decision No. 08-
24). The Governors' Decision includes three attachments. Attachment 
A is proposed Mail Classification Schedule language. Attachment B is 
the price floor and price ceiling formulas approved by the 
Governors. Attachment C provides an analysis of the proposed price 
floor and price ceilings discussed in Attachment B. Attachment D is 
a certification as to the formulas for prices offered under 
applicable International Business Reply Service contracts. 
Attachment 3 is a redacted certification for the IBRS contract at 
issue in Docket No. CP2009-20. Unredacted copies of the Governors' 
Decision, the IBRS contract, the certification, and other supporting 
documentation establishing compliance with 39 CFR 3015.5 were filed 
separately with the Commission under seal.
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    In the statement of supporting justification, Jo Ann Miller, 
Director, Global Business Development, asserts that the service to be 
provided under the contract will cover its attributable costs, make a 
positive contribution to institutional costs, and increase contribution 
toward the requisite 5.5 percent of the Postal Service's total 
institutional costs. Id., Attachment 1. Thus, Ms. Miller contends there 
will be no issue of subsidization of competitive products by market 
dominant products as a result of this contract. Id.
    Product description. As part of her statement of supporting 
justification, Ms. Miller describes the proposed product. She explains 
that IBRS contracts are for U.S.-based entities seeking a channel for 
returned merchandise or other articles from their overseas customers. 
Such entities typically supply preprinted, prepaid IBRS packaging in 
which their customers can place used or defective consumer items into 
the mailstream at no direct cost. The business entity compensates the 
Postal Service for this service, and the Postal Service remits to the 
relevant foreign postal administration the amount due for collection 
and transportation of the items in the foreign country. Id., Attachment 
1, section (d).
    Related contracts. An unredacted version of the specific 
International Business Reply Service Contract 1 is included with the 
Request filed under seal. Unlike past practice, the entirety of the 
Docket No. CP2009-20 contract was filed under seal, and no redacted 
version was filed publicly. The Commission requests the Postal Service 
to explain why no portions of this contract can be filed publicly no 
later than January 12, 2009.
    The contract is for 1 year from the date the Postal Service 
notifies the customer that all necessary approvals and reviews of the 
agreement have been obtained. The Postal Service represents that the 
contract is consistent with 39 U.S.C. 3633(a). See id., Attachment 1 
and Attachment 3.
    The Postal Service also explains that it has two ongoing similar 
arrangements with two customers whose prior contracts officially 
expired. These ``contingency arrangements'' survive the contracts' 
expiration and govern any residual items that third parties might 
continue to enter into the mailstream for return to the IBRS customers. 
The Postal Service states when the Docket No. CP2009-20 contract 
expires, this contingency arrangement will continue with respect to 
this contract partner until such time as a new IBRS contract can take 
effect after all necessary approvals and reviews. The Postal Service 
shall provide any and all IBRS contingency arrangements currently in 
effect no later than January 12, 2009. See Request at 3.
    Confidentiality. The Postal Service filed much of the supporting 
materials, including the Governors' Decision and the specific 
International Business Reply Service Contract 1, under seal. In its 
Request, the Postal Service maintains that the contract, related 
financial information, the customer's name, the accompanying analyses 
and certified statements that provide cost, prices, terms, conditions, 
and financial projections should remain under seal. Id. at 3-4. It 
notes that prices and other contract terms relating to parties' 
processes and procedures are confidential in the business world and

[[Page 1264]]

should be protected in accordance with industry standards. Id.

II. Notice of Filings

    The Commission establishes Docket Nos. MC2009-14 and CP2009-20 for 
consideration of the Request pertaining to the proposed International 
Business Reply Service Contract 1 product and the related contract, 
respectively. In keeping with practice, these dockets are addressed on 
a consolidated basis for purposes of this Order; however, future 
filings should be made in the specific docket in which issues being 
addressed pertain.
    The Commission appoints Michael J. Ravnitzky to serve as Public 
Representative in these dockets.
    Comments. Interested persons may submit comments on whether the 
Postal Service's filings in the captioned dockets are consistent with 
the policies of 39 U.S.C. 3632, 3633, or 3642 and 39 CFR part 3015 and 
39 CFR 3020 subpart B. Comments are due no later than January 16, 2009. 
The public portions of these filings can be accessed via the 
Commission's Web site (http://www.prc.gov).
    Pursuant to 39 CFR 1315.6, the Commission requests that the Postal 
Service address the following issues by January 12, 2009:
    1. Ms. Miller's statement describing the product and why it should 
be classified as competitive, at least preliminarily, seems as though 
it could also apply to the domestic Merchandise Return Service product 
which is currently classified as market dominant. See Request, 
Attachment 1, section (d). Should this proposed product category be 
called ``International Merchandise Return Service'' to better align it 
with its domestic counterpart (Merchandise Return Service) and to avoid 
confusion with the market dominant product of the same name 
``International Business Reply Service''? See Order No. 43, Order 
Establishing Ratemaking Regulations for Market Dominant and Competitive 
Products, October 29, 2007 at Appendix A, sections 1540 and 1505.10.
    2. For the reasons set forth in Attachment 1, section (d), should a 
proceeding be initiated to consider moving the domestic Merchandise 
Return Service product to the competitive rate category? If not, please 
explain the processing and market characteristic differences between 
the proposed new product and Merchandise Return Service.
    Other interested persons also may find it appropriate to address 
these issues in their comments.

III. Ordering Paragraphs

    It is Ordered:
    1. The Commission establishes Docket Nos. MC2009-14 and CP2009-20 
for consideration of the matters raised in each docket.
    2. Pursuant to 39 U.S.C. 505, Michael J. Ravnitzky is appointed to 
serve as officer of the Commission (Public Representative) to represent 
the interests of the general public in these proceedings.
    3. Comments by interested persons in these proceedings, including 
those addressing questions (1) and (2) of section II above, are due no 
later than January 16, 2009.
    4. The Postal Service shall address questions (1) and (2) of 
section II above no later than January 12, 2009.
    5. The Postal Service shall provide any and all IBRS contingency 
arrangements currently in effect no later than January 12, 2009.
    6. The Postal Service shall explain why no portions of this 
contract can be filed publicly no later than January 12, 2009.
    7. The Secretary shall arrange for publication of this Order in the 
Federal Register.

    By the Commission.
Steven W. Williams,
Secretary.
[FR Doc. E9-290 Filed 1-9-09; 8:45 am]
BILLING CODE 7710-FW-P