[Federal Register Volume 74, Number 157 (Monday, August 17, 2009)]
[Rules and Regulations]
[Pages 41336-41340]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-19440]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3020

[Docket No. CP2009-46; Order No. 265]


Global Plus 1 Contracts

AGENCY: Postal Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Commission is making changes to the Competitive Product 
List, including adding a Global Plus 1 contract. This is consistent 
with changes in a recent law governing postal operations. Republication 
of the lists of market dominant and competitive products is also 
consistent with requirements in the new law.

DATES: Effective August 17, 2009 and is applicable beginning July 31, 
2009.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman at 202-789-6820 or 
[email protected].

SUPPLEMENTARY INFORMATION: Regulatory History, 74 FR 36276 (July 22, 
2009).

I. Introduction
II. Background
III. Comments
IV. Commission Analysis
V. Ordering Paragraphs

I. Introduction

    The Postal Service proposes to add a specific Global Plus 1 
contract to the Global Plus Contracts product established in Docket No. 
CP2008-8. For the reasons discussed below, the Commission approves the 
Postal Service's proposal.

II. Background

    On July 13, 2009, the Postal Service filed a notice, pursuant to 39 
CFR 3015.5, announcing that it has entered into two additional Global 
Plus 1 contracts, which it states fit within the previously established 
Global Plus Contracts product.\1\ The Postal Service

[[Page 41337]]

states that each contract is functionally equivalent to previously 
submitted Global Plus 1 contracts, are filed in accordance with Order 
No. 85, and are supported by Governors' Decision No. 08-8 filed in 
Docket No. CP2008-8.\2\ Notice at 1.
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    \1\ Notice of the United States Postal Service of Filing Two 
Functionally Equivalent Global Plus 1 Contracts Negotiated Service 
Agreements, July 13, 2009 (Notice). While the Notice was filed 
jointly in Docket Nos. CP2009-46 and CP2009-47, the Commission will 
address the issues in these dockets in separate orders. The Postal 
Service requests that the two contracts be included in the Global 
Plus 1 product, and ``that they be considered the new `baseline' 
contracts for future functional equivalency analyses...'' Id. at 2.
    \2\ See Docket Nos. CP2008-8 through CP2008-10, Order Concerning 
Global Plus Negotiated Service Agreements, June 27, 2008 (Order No. 
85).
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    The Notice also states that in Docket No. CP2008-8, the Governors 
established prices and classifications for competitive products not of 
general applicability for Global Plus Contracts.\3\ The Postal Service 
states that the instant contract is the immediate successor contract to 
Docket No. CP2008-9 which is to expire soon, which the Commission found 
to be functionally equivalent in Order No. 85. Id. at 2.
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    \3\ See Docket No.CP2008-8, Notice of United States Postal 
Service of Governors' Decision Establishing Prices and 
Classifications for Global Plus Contracts, June 2, 2008, at 1.
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    The Postal Service contends that the instant contract should be 
included within the Global Plus 1 product on the Competitive Product 
List. Id. at 1.
    In support, the Postal Service has also filed a redacted version of 
each contract and related materials as Attachment 1-A. A redacted 
version of the certified statement required by 39 CFR 3015.5 is 
included as Attachment 2-A. The Postal Service requests that the 
instant contract ``be considered the new `baseline' contract[s] for 
future functional equivalency analyses concerning this product.'' Id. 
at 2.
    The Postal Service filed the instant contract pursuant to 39 CFR 
3015.5. The contract becomes effective August 1, 2009, unless 
regulatory reviews affect that date, and has a one-year term.
    The Postal Service maintains that certain portions of this contract 
and certified statement required by 39 CFR 3015.5(c)(2), containing 
names and identifying information of the Global Plus 1 customer, 
related financial information, as well as the accompanying analyses 
that provide prices, terms, conditions, and financial projections 
should remain under seal. Id. at 3.
    The Postal Service asserts the contract is functionally equivalent 
with the contract filed in Docket No. CP2009-47 because they share 
similar cost and market characteristics. It contends that they should 
be classified as a single product. Id. It states that while the 
existing contracts filed in Docket Nos. CP2008-9 and CP2008-10 
exhibited minor distinctions, the new contracts are virtually identical 
to one another. Id. at 4.
    The Postal Service maintains these differences only add detail or 
amplify processes included in prior Global Plus 1 contracts. It 
contends because the instant contract has the same cost attributes and 
methodology as well as similar cost and market characteristics the 
differences do not affect the fundamental service being offered or the 
essential structure of the contract. Id. at 7-8. It states the contract 
is substantially similar both to the existing contract in Docket No. 
CP2008-9 and to the existing Global Plus 1 contracts and should be 
added to the Global Plus 1 product. Id. at 8.
    In Order No. 249, the Commission gave notice of the docket, 
appointed a Public Representative, and provided the public with an 
opportunity to comment.\4\
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    \4\ Notice and Order Concerning Two Functionally Equivalent 
Global Plus 1 Contracts Negotiated Service Agreements, July 16, 2009 
(Order No. 249).
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    On July 22, 2009, Chairman's Information Request No. 1 (CHIR No. 1) 
was issued with responses due by July 27, 2009. On July 24, 2009, the 
Postal Service provided its responses to CHIR No. 1.

III. Comments

    Comments were filed by the Public Representative.\5\ No other 
interested parties submitted comments. The Public Representative states 
the individual contracts appear to satisfy the statutory criteria, but 
because of the timeframe to provide comments and information identified 
in CHIR No. 1, his response is not an unqualified recommendation in 
support of each contract's approval. Id. at 2. He notes that relevant 
provisions of 39 U.S.C. 3632, 3633 and 3642 appear to be met by these 
additional Global Plus 1 contracts. Id. The Public Representative 
states that he believes the contracts are functionally equivalent to 
the existing Global Plus Contracts product. He also determines that the 
Postal Service has provided greater transparency and accessibility in 
its filings. Id. at 3.
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    \5\ Public Representative Comments in Response to Order No. 249, 
July 23, 2009 (Public Representative Comments). The Public 
Representative's comments jointly address the Postal Service's 
filings in Docket Nos. CP2009-46 and CP2009-47.
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    The Public Representative notes that the general public benefits 
from the availability of these contracts in several ways: Well prepared 
international mail adds increased efficiency in the mailstream, 
enhanced volume results in timeliness in outbound shipments to all 
countries including those with small volume, and the addition of 
shipping options may result in expansion of mail volumes, particularly 
with the incentives for Postal Qualified Mailers (PQMs) and increased 
efficiency in existing postal capacity. Id. at 4-5.
    Finally, he discusses the need for self-contained docket filings. 
In particular, he notes that the instant contract relies on data from 
the most recent International Cost and Revenue Analysis (ICRA), which 
was filed under seal in another docket. He suggests that the Postal 
Service should identify the location of the ICRA utilized and cited in 
that docket. Id. at 6.

IV. Commission Analysis

    The Postal Service proposes to add an additional contract under the 
Global Plus Contracts product that was created in Docket No. CP2008-8. 
As filed, this docket presents two issues for the Commission to 
consider: (1) Whether the contract satisfies 39 U.S.C. 3633, and (2) 
whether the contract is functionally equivalent to previously reviewed 
Global Plus 1 contracts. In reaching its conclusions, the Commission 
has reviewed the Notice, the contract and the financial analyses 
provided under seal, supplemental information, and the Public 
Representative's comments.
    Statutory requirements. The Postal Service contends that the 
instant contract and supporting documents filed in this docket 
establish compliance with the statutory provisions applicable to rates 
for competitive products (39 U.S.C. 3633). Notice at 2. J. Ron Poland, 
Manager, Statistical Programs, Finance Department asserts Governors' 
Decision No. 08-8 for Global Plus Contracts establishes price floor and 
ceiling formulas issued on May 28, 2008. He certifies that the pricing 
in the instant contract meets the Governors' pricing formula and meets 
the criteria of 39 U.S.C. 3633(a)(1), (2) and (3). He further states 
that the prices demonstrate that the contract and the included 
ancillary services should cover their attributable costs, preclude the 
subsidization of competitive products by market dominant products, and 
should not impair the ability of competitive products on the whole to 
cover an appropriate share of institutional costs. Id., Attachment 2-A.
    For his part, the Public Representative indicates that the contract 
appears to satisfy 39 U.S.C. 3633. Public Representative Comments at 1-
3.
    Based on the review of the data submitted, including the 
supplemental

[[Page 41338]]

information, the Commission finds that the contract should cover its 
attributable costs (39 U.S.C. 3633(a)(2)), should not lead to the 
subsidization of competitive products by market dominant products (39 
U.S.C. 3633(a)(1)), and should have a positive effect on competitive 
products' contribution to institutional costs (39 U.S.C. 3633(a)(3)). 
Thus, an initial review of the contract indicates that it comports with 
the provisions applicable to rates for competitive products.
    Functional equivalence. The Postal Service asserts that the instant 
contract is functionally equivalent to the contract filed in the 
companion proceeding, Docket No. CP2009-47, as well as with Global Plus 
1 contracts filed previously because they share similar cost and market 
characteristics. Notice at 4. The Postal Service states that the 
customers under the existing and proposed contracts are the same. In 
addition, it notes that existing contracts exhibited some differences, 
the contracts proposed in Docket No. CP2009-46 and CP2009-47 are 
virtually identical. Id.
    Having reviewed the contracts filed in the instant proceeding and 
in Docket No. CP2009-47, and the Postal Service's justification, the 
Commission finds that the two contracts may be treated as functionally 
equivalent.
    New baseline. The Postal Service requests that the contracts filed 
in Docket Nos. CP2009-46 and 2009-47 be included in the Global Plus 1 
product and ``considered the new `baseline' contracts for purposes of 
future functional equivalency analyses concerning this product.'' 
Notice at 2. Currently, the Global Plus 1 product consists of two 
existing contracts that will be superseded by the contracts in Docket 
Nos. CP2009-46 and CP2009-47. Under those circumstances, the new 
contracts need not be designated as a new product. Accordingly, the new 
contracts in Docket Nos. CP2009-46 and CP2009-47 will be included in 
the Global Plus 1 product and become the ``baseline'' for future 
functional equivalency analyses regarding that product.
    Self-contained docket filings. The Public Representative reiterates 
a point made in Order No. 247 regarding the need for self-contained 
docket filings. In particular, he points to the difficulty in obtaining 
IRCA data relied on to support the instant contract but filed under 
seal in another docket. He suggests that ``filings that reference the 
ICRA should include a pointer to the location of the ICRA utilized and 
cited in that docket.'' Public Representative Comments at 6.
    The Public Representative point is well taken. The Commission does 
not wish to burden the Postal Service with extraneous filing 
requirements, nor does it intend for the process of reviewing Postal 
Service filings to become labyrinthine. Recognizing that Postal Service 
filings are electronic, the Commission will adopt the following policy: 
1. The redacted Governors' Decision on which the contract is based 
should be included with the filing; 2. an html link should be provided 
to the document filed by the Postal Service that notices that the 
unredacted Governors' Decision is being filed under seal; and 3. all 
other confidential data relied on to support the specific contract 
should be filed in the docket in which that specific contract is filed.
    Other considerations. If the agreement terminates earlier than 
anticipated, the Postal Service shall promptly inform the Commission of 
the new termination date.
    In conclusion, the Commission finds that the negotiated service 
agreement submitted in Docket No. CP2009-46 is appropriately included 
within the Global Plus Contracts product.

V. Ordering Paragraphs

    It is ordered:
    1. The contract filed in Docket No. CP2009-46 is included within 
the Global Plus 1 product (CP2008-8 and CP2009-46).
    2. The existing Global Plus 1 product (CP2008-9 and CP2008-10) is 
removed from the product list.
    3. As discussed in the body of this order, future contract filings 
which rely on materials filed under seal in other dockets should be 
self-contained.
    4. The Postal Service shall notify the Commission if the 
termination date changes as discussed in this order.

List of Subjects in 39 CFR Part 3020

    Administrative practice and procedure; Postal Service.

    Issued: July 31, 2009.

    By the Commission.
Judith M. Grady,
Acting Secretary.

0
For the reasons stated in the preamble, under the authority at 39 
U.S.C. 503, the Postal Regulatory Commission amends 39 CFR part 3020 as 
follows:

PART 3020--PRODUCT LISTS

0
1. The authority citation for part 3020 continues to read as follows:

    Authority:  39 U.S.C. 503; 3622; 3631; 3642; 3682.


0
2. Revise Appendix A to Subpart A of Part 3020--Mail Classification 
Schedule to read as follows:

Appendix to Subpart A of Part 3020--Mail Classification Schedule

Part A--Market Dominant Products

1000 Market Dominant Product List

First-Class Mail
    Single-Piece Letters/Postcards
    Bulk Letters/Postcards
    Flats
    Parcels
    Outbound Single-Piece First-Class Mail International
    Inbound Single-Piece First-Class Mail International
Standard Mail (Regular and Nonprofit)
    High Density and Saturation Letters
    High Density and Saturation Flats/Parcels
    Carrier Route
    Letters
    Flats
    Not Flat-Machinables (NFMs)/Parcels
Periodicals
    Within County Periodicals
    Outside County Periodicals
Package Services
    Single-Piece Parcel Post
    Inbound Surface Parcel Post (at UPU rates)
    Bound Printed Matter Flats
    Bound Printed Matter Parcels
    Media Mail/Library Mail
Special Services
    Ancillary Services
    International Ancillary Services
    Address List Services
    Caller Service
    Change-of-Address Credit Card Authentication
    Confirm
    International Reply Coupon Service
    International Business Reply Mail Service
    Money Orders
    Post Office Box Service
Negotiated Service Agreements
    HSBC North America Holdings Inc. Negotiated Service Agreement
    Bookspan Negotiated Service Agreement
    Bank of America Corporation Negotiated Service Agreement
    The Bradford Group Negotiated Service Agreement
    Inbound International
    Canada Post--United States Postal Service Contractual Bilateral 
Agreement for Inbound Market Dominant Services

Market Dominant Product Descriptions

First-Class Mail
[Reserved for Class Description]
    Single-Piece Letters/Postcards
    [Reserved for Product Description]
    Bulk Letters/Postcards
    [Reserved for Product Description]
    Flats
    [Reserved for Product Description]
    Parcels
    [Reserved for Product Description]
    Outbound Single-Piece First-Class Mail International
    [Reserved for Product Description]
    Inbound Single-Piece First-Class Mail International
    [Reserved for Product Description]
Standard Mail (Regular and Nonprofit)
[Reserved for Class Description]
    High Density and Saturation Letters
    [Reserved for Product Description]

[[Page 41339]]

    High Density and Saturation Flats/Parcels
    [Reserved for Product Description]
    Carrier Route
    [Reserved for Product Description]
    Letters
    [Reserved for Product Description]
    Flats
    [Reserved for Product Description]
    Not Flat-Machinables (NFMs)/Parcels
    [Reserved for Product Description]
Periodicals
[Reserved for Class Description]
    Within County Periodicals
    [Reserved for Product Description]
    Outside County Periodicals
    [Reserved for Product Description]
Package Services
[Reserved for Class Description]
    Single-Piece Parcel Post
    [Reserved for Product Description]
    Inbound Surface Parcel Post (at UPU rates)
    [Reserved for Product Description]
    Bound Printed Matter Flats
    [Reserved for Product Description]
    Bound Printed Matter Parcels
    [Reserved for Product Description]
    Media Mail/Library Mail
    [Reserved for Product Description]
Special Services
[Reserved for Class Description]
    Ancillary Services
    [Reserved for Product Description]
    Address Correction Service
    [Reserved for Product Description]
    Applications and Mailing Permits
    [Reserved for Product Description]
    Business Reply Mail
    [Reserved for Product Description]
    Bulk Parcel Return Service
    [Reserved for Product Description]
    Certified Mail
    [Reserved for Product Description]
    Certificate of Mailing
    [Reserved for Product Description]
    Collect on Delivery
    [Reserved for Product Description]
    Delivery Confirmation
    [Reserved for Product Description]
    Insurance
    [Reserved for Product Description]
    Merchandise Return Service
    [Reserved for Product Description]
    Parcel Airlift (PAL)
    [Reserved for Product Description]
    Registered Mail
    [Reserved for Product Description]
    Return Receipt
    [Reserved for Product Description]
    Return Receipt for Merchandise
    [Reserved for Product Description]
    Restricted Delivery
    [Reserved for Product Description]
    Shipper-Paid Forwarding
    [Reserved for Product Description]
    Signature Confirmation
    [Reserved for Product Description]
    Special Handling
    [Reserved for Product Description]
    Stamped Envelopes
    [Reserved for Product Description]
    Stamped Cards
    [Reserved for Product Description]
    Premium Stamped Stationery
    [Reserved for Product Description]
    Premium Stamped Cards
    [Reserved for Product Description]
    International Ancillary Services
    [Reserved for Product Description]
    International Certificate of Mailing
    [Reserved for Product Description]
    International Registered Mail
    [Reserved for Product Description]
    International Return Receipt
    [Reserved for Product Description]
    International Restricted Delivery
    [Reserved for Product Description]
    Address List Services
    [Reserved for Product Description]
    Caller Service
    [Reserved for Product Description]
    Change-of-Address Credit Card Authentication
    [Reserved for Product Description]
    Confirm
    [Reserved for Product Description]
    International Reply Coupon Service
    [Reserved for Product Description]
    International Business Reply Mail Service
    [Reserved for Product Description]
    Money Orders
    [Reserved for Product Description]
    Post Office Box Service
    [Reserved for Product Description]
Negotiated Service Agreements
[Reserved for Class Description]
    HSBC North America Holdings Inc. Negotiated Service Agreement
    [Reserved for Product Description]
    Bookspan Negotiated Service Agreement
    [Reserved for Product Description]
    Bank of America Corporation Negotiated Service Agreement
    The Bradford Group Negotiated Service Agreement

Part B--Competitive Products

2000 Competitive Product List

Express Mail

    Express Mail
    Outbound International Expedited Services
    Inbound International Expedited Services
     Inbound International Expedited Services 1 (CP2008-7)
     Inbound International Expedited Services 2 (MC2009-10 and 
CP2009-12)

Priority Mail

    Priority Mail
    Outbound Priority Mail International
    Inbound Air Parcel Post
     Royal Mail Group Inbound Air Parcel Post Agreement

Parcel Select

Parcel Return Service

International

    International Priority Airlift (IPA)
    International Surface Airlift (ISAL)
    International Direct Sacks--M-Bags
    Global Customized Shipping Services
    Inbound Surface Parcel Post (at non-UPU rates)
     Canada Post--United States Postal service Contractual Bilateral 
Agreement for Inbound Competitive Services (MC2009-8 and CP2009-9)
    International Money Transfer Service
    International Ancillary Services

Special Services

    Premium Forwarding Service

Negotiated Service Agreements

Domestic
    Express Mail Contract 1 (MC2008-5)
    Express Mail Contract 2 (MC2009-3 and CP2009-4)
    Express Mail Contract 3 (MC2009-15 and CP2009-21)
    Express Mail Contract 4 (MC2009-34 and CP2009-45)
    Express Mail & Priority Mail Contract 1 (MC2009-6 and CP2009-7)
    Express Mail & Priority Mail Contract 2 (MC2009-12 and CP2009-
14)
    Express Mail & Priority Mail Contract 3 (MC2009-13 and CP2009-
17)
    Express Mail & Priority Mail Contract 4 (MC2009-17 and CP2009-
24)
    Express Mail & Priority Mail Contract 5 (MC2009-18 and CP2009-
25)
    Express Mail & Priority Mail Contract 6 (MC2009-31 and CP2009-
42)
    Express Mail & Priority Mail Contract 7 (MC2009-32 and CP2009-
43)
    Express Mail & Priority Mail Contract 8 (MC2009-33 and CP2009-
44)
    Parcel Return Service Contract 1 (MC2009-1 and CP2009-2)
    Priority Mail Contract 1 (MC2008-8 and CP2008-26)
    Priority Mail Contract 2 (MC2009-2 and CP2009-3)
    Priority Mail Contract 3 (MC2009-4 and CP2009-5)
    Priority Mail Contract 4 (MC2009-5 and CP2009-6)
    Priority Mail Contract 5 (MC2009-21 and CP2009-26)
    Priority Mail Contract 6 (MC2009-25 and CP2009-30)
    Priority Mail Contract 7 (MC2009-25 and CP2009-31)
    Priority Mail Contract 8 (MC2009-25 and CP2009-32)
    Priority Mail Contract 9 (MC2009-25 and CP2009-33)
    Priority Mail Contract 10 (MC2009-25 and CP2009-34)
    Priority Mail Contract 11 (MC2009-27 and CP2009-37)
    Priority Mail Contract 12 (MC2009-28 and CP2009-38)
    Priority Mail Contract 13 (MC2009-29 and CP2009-39)
    Priority Mail Contract 14 (MC2009-30 and CP2009-40)
Outbound International
    Direct Entry Parcels Contracts
     Direct Entry Parcels 1 (MC2009-26 and CP2009-36)
    Global Direct Contracts (MC2009-9, CP2009-10, and CP2009-11)
    Global Expedited Package Services (GEPS) Contracts
     GEPS 1 (CP2008-5, CP2008-11, CP2008-12, and CP2008-13, CP2008-
18, CP2008-19, CP2008-20, CP2008-21, CP2008-22, CP2008-23, and 
CP2008-24)
    Global Plus Contracts
     Global Plus 1 (CP2008-8 and CP2008-46)
     Global Plus 2 (MC2008-7, CP2008-16 and CP2008-17)
Inbound International
    Inbound Direct Entry Contracts with Foreign Postal 
Administrations (MC2008-6, CP2008-14 and CP2008-15)

[[Page 41340]]

    International Business Reply Service
    Competitive Contract 1 (MC2009-14 and CP2009-20)

Competitive Product Descriptions

    Express Mail [Reserved for Group Description]
    Express Mail [Reserved for Product Description]
    Outbound International Expedited Services [Reserved for Product 
Description]
    Inbound International Expedited Services [Reserved for Product 
Description]
    Priority [Reserved for Product Description]
    Priority Mail [Reserved for Product Description]
    Outbound Priority Mail International [Reserved for Product 
Description]
    Inbound Air Parcel Post [Reserved for Product Description]
    Parcel Select [Reserved for Group Description]
    Parcel Return Service [Reserved for Group Description]
    International [Reserved for Group Description]
    International Priority Airlift (IPA) [Reserved for Product 
Description]
    International Surface Airlift (ISAL) [Reserved for Product 
Description]
    International Direct Sacks--M-Bags [Reserved for Product 
Description]
    Global Customized Shipping Services [Reserved for Product 
Description]
    International Money Transfer Service [Reserved for Product 
Description]
    Inbound Surface Parcel Post (at non-UPU rates) [Reserved for 
Product Description]
    International Ancillary Services [Reserved for Product 
Description]
    International Certificate of Mailing [Reserved for Product 
Description]
    International Registered Mail [Reserved for Product Description]
    International Return Receipt [Reserved for Product Description]
    International Restricted Delivery [Reserved for Product 
Description]
    International Insurance [Reserved for Product Description]
    Negotiated Service Agreements [Reserved for Group Description]
    Domestic [Reserved for Product Description]
    Outbound International [Reserved for Group Description]

Part C--Glossary of Terms and Conditions [Reserved]

Part D--Country Price Lists for International Mail [Reserved]

[FR Doc. E9-19440 Filed 8-14-09; 8:45 am]
BILLING CODE 7710-FW-P