[Federal Register Volume 74, Number 111 (Thursday, June 11, 2009)]
[Notices]
[Pages 27843-27845]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-13744]


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POSTAL REGULATORY COMMISSION

[Docket No. R2009-4; Order No. 220]


Postal Service Price Changes

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is conducting a review of the Postal Service's 
planned price adjustment for Standard Mail High Density flat pieces. 
This document invites public comment.

DATES: Comments are due June 22, 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. Overview

    On June 1, 2009, the Postal Service filed with the Commission a 
notice announcing its intention to adjust prices for Standard Mail High 
Density flat pieces pursuant to 39 U.S.C. 3622 and 39 CFR Part 3010.\1\ 
The proposed adjustment has a planned implementation date of July 19, 
2009. The Postal Service submits that this proposal represents a way 
that it can take advantage of its greater pricing flexibility for 
market dominant products under the Postal Accountability and 
Enhancement Act (PAEA), Public Law 109-435, 120 Stat. 3218 (2006), to 
``respond quickly and flexibly to perceived needs in the mailing 
community.'' Id. at 3.
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    \1\ United States Postal Service Notice of Market-Dominant Price 
Adjustment, June 1, 2009 (Notice).
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II. Postal Service Filing

    Price adjustment. The proposed price adjustment reduces prices for 
the Standard Mail High Density flats price categories for both 
commercial and nonprofit mailpieces. Id. at 2. The

[[Page 27844]]

adjustment decreases the minimum per-piece prices for commercial and 
nonprofit High Density flats by 0.1 cent, and decreases the pound price 
element for commercial and nonprofit High Density flats to match the 
Standard Mail Saturation flats pound price element. The per-piece price 
element for pound rated pieces increases by 0.7 cents per piece to 
``ensure a smooth transition at the breakpoint,'' according to the 
Postal Service. Id. at 3. Dropship discounts for High Density flats do 
not change under this proposal.
    In support of the proposal, the Postal Service explains that it has 
heard the concerns expressed by High Density flats mailers on the 
detrimental impact that the above-average price increases implemented 
on May 11, 2009 will have on their businesses. After taking this 
concern into consideration, the Postal Service determined that High 
Density flat prices that reflect an increase from the previous year 
similar to the average Standard Mail increase are more appropriate at 
this time. Id. at 2.
    Conformance with 39 CFR Part 3010. The Postal Service's proposed 
schedule of prices appears in Appendix A as draft Mail Classification 
Schedule language, which is attached to the Notice. Id. at 1. It also 
represents, in conformance with the notice requirements of 39 CFR 
3010.14(a)(3), that it will issue public notice of the price changes at 
least 45 days before the effective date via several additional means, 
including issuing notice of the price changes on the Postal Service's 
Web site (http://www.usps.com), the Postal Explorer Web site (http://www.pe.usps.com), the DMM [Domestic Mail Manual] Advisory, and the P&C 
[Producers and Consumers] Weekly, and a press release announcing the 
changes. The Postal Service identifies Joseph Moeller, Manager, 
Pricing, as the official available to provide prompt responses to 
requests for clarification from the Commission. Id. at 2.
    Impact on the price cap. Because the proposed High Density flat 
price adjustments are decreases and not part of the annual CPI cap 
price change, the Postal Service considers this price adjustment to be 
outside the Commission's current rules. Id. at 3. The Postal Service 
``proposes that the adjustments have no impact on price cap issues, but 
would welcome other views.'' Id. Accordingly, the Postal Service has 
made no calculation of cap or price changes described in Commission 
rule 3010.14(b)(1) through (4). The Postal Service ``is not claiming 
any new unused rate adjustment authority as a result of this price 
decrease.'' Id.\2\
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    \2\ The Postal Service submits that the unused price adjustment 
authority for Standard Mail should remain at 0.081 percent. Id. at 
3. See Order No. 191, Order Reviewing Postal Service Market Dominant 
Price Adjustment, May 16, 2009.
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    Objectives and factors. The Postal Service lists and discusses what 
it considers the relevant objectives and factors of 39 U.S.C. 3622 as 
to their relationship to the proposed price adjustment. Id. at 4-8. It 
believes at most, the price reductions will cause only a modest 
decrease in Postal Service revenues, and could potentially avoid 
diversion of large volumes of mail currently paying High Density flats 
prices to non-postal delivery.
    Workshare discounts. The Postal Service maintains its view that the 
price differences between the High Density categories and the 
Saturation and Carrier Route categories are not workshare discounts. It 
recognizes that the Commission has instituted Docket No. RM2009-3 to 
consider that issue. In this case, the Postal Service provides in 
Appendix B (and an associated Excel file) a table showing the cost and 
price differences, as well as passthroughs for Carrier Route, High 
Density, and Saturation flats (both commercial and nonprofit) following 
the adjustments to the prices of High Density flats. The Postal Service 
notes that none of the passthroughs exceeds 100 percent, so the 
limitations of section 3622(e) do not apply. It explains that all of 
the passthroughs for the High Density/Carrier Route relationship are 
slightly higher, and the passthroughs for the High Density/Saturation 
relationship are slightly lower than those reported in Docket No. 
R2009-2 due to the instant proposed High Density flats price reduction.
    Preferred rates. The Postal Service explains that nonprofit High 
Density flats receive the same price reductions as commercial flats. 
Due to the fact that the proposed price changes apply to both 
commercial and nonprofit flats and due to the small volumes of High 
Density nonprofit flats, the Postal Service submits that the required 
60 percent ratio, required under 39 U.S.C. 3626, between commercial and 
nonprofit prices is not altered as a result of the proposed price 
adjustment.

III. Commission Action

    The Commission establishes Docket No. R2009-4 to consider all 
matters related to the Notice as required by 39 U.S.C. 3622.
    Comments. The Commission's rules provide for a 20-day comment 
period starting from the date of the filing of the Notice. See 39 CFR 
3010.13(a)(5). Interested persons may express views and offer comments 
on whether the planned changes are consistent with the policies of 39 
U.S.C. 3622 and 39 CFR part 3010. In particular, the Commission 
requests that interested parties (including the Postal Service) address 
the following topics:
    1. This is the first Postal Service request for a permanent rate 
decrease in rates of general applicability. The Postal Service states 
that it ``proposes that the adjustments have no impact on price cap 
issues, but would welcome other views.'' Id. at 3. Title 39 U.S.C. 
3622(d)(1)(A) states that the Commission's system of rate regulation 
must include regulations that include an annual limitation calculation 
from the last date that ``the Postal Service files its notice of its 
intention to increase rates.'' 39 U.S.C. 3622(d)(1)(A) (emphasis 
added). Does this provision suggest that permanent rate decreases in 
rates of general applicability do not require an analysis under section 
3622(d)(1)(A)?
    2. If the price cap under section 3622(d)(1)(A) does not apply to 
this case, is an analysis under section 3622(d)(2)(C) (relating to 
unused rate adjustment authority) also not required?
    3. Notwithstanding the potential application of section 
3622(d)(2)(C) to this case, can the Postal Service waive some or part 
of its unused rate adjustment authority? Can the Commission enforce 
such a waiver?
    4. The Notice states that ``the Postal Service is not claiming any 
new unused rate adjustment authority as a result of this price 
decrease.'' Id. at 3. Should this statement be construed as an 
intention by the Postal Service to waive any resulting additional 
unused rate adjustment authority that may result due to the rate 
decreases from the instant rate adjustment?
    Comments are due no later than June 22, 2009.
    Public representative. The Commission appoints Kenneth E. 
Richardson to represent the interests of the general public in this 
proceeding. See 39 U.S.C. 505. Pursuant to rule 3010.13(c), the 
Commission will issue its determination in this proceeding by July 6, 
2009.

IV. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket No. R2009-4 to consider 
matters raised by the Postal Service's June 1, 2009 filing.
    2. Interested persons may submit comments on the planned price 
adjustments. Comments are due June 22, 2009.

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    3. Pursuant to 39 U.S.C. 505, the Commission appoints Kenneth E. 
Richardson to represent the interests of the general public in this 
proceeding.
    4. The Commission directs the Secretary of the Commission to 
arrange for prompt publication of this Notice in the Federal Register.

    By the Commission.
Judith M. Grady,
Acting Secretary.
[FR Doc. E9-13744 Filed 6-10-09; 8:45 am]
BILLING CODE 7710-FW-P