[Federal Register Volume 74, Number 55 (Tuesday, March 24, 2009)]
[Proposed Rules]
[Pages 12295-12296]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-6197]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3020

[Docket No. RM2009-3; Order No. 192]


Postal Rates

AGENCY: Postal Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission announces a new proceeding to address workshare 
discount methodologies in First-Class Mail and Standard Mail. The 
proceeding will allow certain issues raised in Docket No. R2009-2 to be 
fully addressed.

DATES: Comments due May 26, 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: In a concurrently issued order in Docket No. 
R2009-2, the Commission largely approves the Postal Service's planned 
market dominant price changes scheduled to take effect May 11, 2009. 
That approval includes a commitment to institute a rulemaking 
proceeding to examine methodologies underlying the calculation of 
workshare discounts. By this order, the Commission fulfills that 
commitment.
    In Docket No. R2009-2, the Postal Service proposes workshare 
discounts for First-Class Mail and Standard Mail that are not based on 
established workshare cost avoidance methodologies. In First-Class, the 
Postal Service did not use the existing benchmark, bulk metered mail, 
for calculating workshare discounts and instead based the discounts on 
presort First-Class Mail delinked from single-piece First-Class Mail. 
In Standard Mail, the Postal Service did not use the existing 
methodology based on costs avoided by shape between Basic and High 
Density, and High Density and Saturation.
    In each instance, the Postal Service offers a legal rationale for 
its approach. It notes First-Class Mail Presort and Single-Piece 
Letters are separate products and contends that the reference to ``each 
market-dominant product'' in the reporting language of U.S.C. 3652(b) 
therefore excludes the inter-product automation Mixed AADC presort 
letter discount from the limitations of U.S.C. 3622(e).\1\ With respect 
to Standard Mail, the Postal Service argues that density differences 
between Carrier Route Basic and High Density, and between High Density 
and Saturation are not the result of ``presorting, prebarcoding, 
handling, or transportation'' as worksharing is defined under 39 U.S.C. 
3622(e)(1).\2\
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    \1\ See Docket No. R2009-2, Response of the United States Postal 
Service to Chairman's Information Request No. 1, February 20, 2009; 
and Docket No. ACR2008, Responses of the United States Postal 
Service to Commission Order No. 169, January 21, 2009, at 17-18 
(Response to Order No. 169).
    \2\ See Docket No. R2009-2, Responses of the United States 
Postal Service to Questions 1-12 of Chairman's Information Request 
No. 4, March 4, 2009, at 12-13; and Response to Order No. 169 at 17-
18.
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    Numerous parties in both Docket Nos. R2009-2 and ACR2008 contest 
the Postal Service's rationales.\3\ Some

[[Page 12296]]

support the Postal Service's methodologies.\4\ As the Commission 
explained in Order No. 191, also issued today, the expedited pre-
implementation review of proposed market dominant rate adjustments 
under section 3622 precludes any meaningful examination of departures 
from established rate methodologies and analytical principles.
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    \3\ See, e.g., Docket No. R2009-2, Public Representative 
Comments in Response to Notice of Price Adjustment for Market-
Dominant Price Adjustment, March 2, 2009, at 9-12; Initial Comments 
of American Postal Workers Union, AFL-CIO, March 2, 2009, at 1-5; 
Comments of the Greeting Card Association, March 2, 2009, at 2; 
Comments of Newspaper Association of America on Notice of Market-
Dominant Price Adjustment, March 2, 2009, at 10-11; Docket No. 
ACR2008, Initial Comments of the Major Mailers Association on the 
Annual Compliance Report of the United States Postal Service, 
January 30, 2009, at 1; and Initial Comments of American Postal 
Workers Union, AFL-CIO, January 30, 2009, at 3-4.
    \4\ See, e.g., Docket No. R2009-2, Comments of Valassis Direct 
Mail Inc. and the Saturation Mailers Coalition, March 2, 2009, at 5.
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    In Docket Nos. R2008-1 and ACR2007, various parties suggested 
changes to the existing workshare discount methodologies and methods 
for measuring cost avoidance, which, given the expedited nature of 
those proceedings, the Commission declined to hear. See Docket No. 
ACR2007, Annual Compliance Determination FY2007, March 27, 2008, at 18; 
Docket No. R2008-1, Review of Postal Service Notice of Market Dominant 
Price Adjustment, March 17, 2008, at 19.
    Consequently, pursuant to 39 U.S.C. 503, 3622(a), and 3652(e), the 
Commission is initiating this proceeding to afford the Postal Service 
(and interested persons supporting its rationales) an opportunity to 
address the legal, factual, and economic underpinnings of the 
methodologies used by the Postal Service to develop its proposed First-
Class Mail and Standard Mail discount rates in Docket No. R2009-2. In 
addition, interested persons, including the Postal Service, may submit 
alternative workshare discount rate design and cost avoidance 
calculation methodologies. Alternative methodologies must address the 
legal, factual, and economic bases underlying them.\5\ The foregoing 
presentations are due no later than 60 days after publication of this 
order in the Federal Register.
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    \5\ Statements, if any, submitted in support of a party's 
position must comply with rule 3001.31 of the Commission's Rules of 
Practice and Procedure.
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    After an opportunity to review those presentations, the Commission 
will issue a procedural schedule to provide interested persons an 
opportunity to submit responsive presentations. Depending on the 
breadth and complexity of issues presented, the Commission may provide 
an opportunity for hearings and may find it appropriate to bifurcate 
the proceeding.
    Based on the record developed in this proceeding, the Commission 
will evaluate whether any change in the established workshare discount 
methodologies, including methods to calculate avoided costs, is 
warranted. While the established methodologies will continue to be 
employed until (and if) changed, the Commission emphasizes that the 
intent of this proceeding is to provide a forum for a thorough 
examination of these important issues.
    Pursuant to 39 U.S.C. 505, the Commission designates Emmett Rand 
Costich and James Callow to serve as Public Representative to represent 
the interests of the general public in this proceeding.
    It is Ordered:
    1. As discussed in the body of this order, initial presentations 
may be filed by any interested person no later than 60 days after 
publication of this order in the Federal Register.
    2. Following receipt of the initial presentations, the Commission 
will issue a further procedural schedule in this proceeding.
    3. Pursuant to 39 U.S.C. 505, Emmitt Rand Costich and James Callow 
are designated as the Public Representative in this proceeding to 
represent the interests of the general public.
    4. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Steven W. Williams,
Secretary.
 [FR Doc. E9-6197 Filed 3-23-09; 8:45 am]
BILLING CODE 7710-FW-P