[Federal Register Volume 74, Number 183 (Wednesday, September 23, 2009)]
[Notices]
[Pages 48613-48614]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-22862]


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POSTAL REGULATORY COMMISSION

[Docket No. CP2009-57; Order No. 281]


International Mail

AGENCY: Postal Regulatory Commission.

ACTION: Notice

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SUMMARY: The Commission is adding Inbound International Expedited 
Services 2 to the Competitive Product List. This action is consistent 
with changes in a recent law governing postal operations.

DATES: Effective September 23, 2009 and is applicable beginning August 
19, 2009.

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

SUPPLEMENTARY INFORMATION: Regulatory History, 74 FR 37739 (July 29, 
2009).

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

I. Introduction

    The Postal Service proposes a change in rates not of general 
applicability for Inbound International Expedited Services 2. For the 
reasons discussed below, the Commission approves the Postal Service's 
proposal.

II. Background

    On July 28, 2009, the Postal Service filed a notice announcing 
changes in rates not of general applicability for Inbound International 
Expedited Services 2 effective January 1, 2010.\1\ The Postal Service 
attached a redacted copy of the 2010 rates and a certified statement 
establishing compliance with 39 U.S.C. 3633 and 39 CFR 3015.5(c)(2) to 
the Notice as Attachments 1 and 2, respectively. Id. at 2. The Postal 
Service also submitted as Attachment 3 a listing of countries in each 
pricing tier and incorporated by reference the description of Inbound 
International Expedited Services 2 contained in its supporting 
documentation filed in Docket Nos. MC2009-10 and CP2009-12. The Postal 
Service submitted the rates, related financial information, and 
certified statement required by 39 CFR 3015.5(c)(2) under seal.
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    \1\ Notice of the United States Postal Service of Filing Changes 
in Rates Not of General Applicability, July 28, 2009 (Notice).
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    The Notice states that in Docket No. MC2009-10, the Governors 
established prices and classifications not of general applicability for 
Inbound Express Mail International (EMS). W. Ashley Lyons, Manager, 
Regulatory Reporting and Cost Analysis, Finance Department certifies 
that the prices are in compliance with the price floor and ceiling 
formulas set forth in Governors' Decision No. 08-20 and 39 U.S.C. 
3633(a). See id., Attachment 2. In Order No. 162, the Commission added 
Inbound International Expedited Services 2 to the Competitive Product 
List as a new product under Express Mail, Inbound International 
Expedited Services.\2\ The rates took effect on January 1, 2009.
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    \2\ See Docket Nos. MC2009-10 and CP2009-12, Order Adding 
Inbound International Expedited Services 2 to Competitive Product 
List, December 31, 2008 (Order No. 162).
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    In accordance with the provisions of the EMS Cooperative of the 
Universal Postal Union (UPU), rates for the delivery of inbound Express 
Mail International must be communicated to the UPU by August 31 of the 
year before which they are to take effect. As a member of the EMS 
Cooperative, the Postal Service may not change its rates for the coming 
year after August 31. In Order No. 162, the Commission raised concerns 
with filing these rates with the Commission after August 31, even 
though they do not take effect until January 1 of the following year. 
The Commission indicated that if a product is found to violate the 
Postal Accountability and Enhancement Act (PAEA), e.g., does not 
satisfy section 3633(a)(2), the Postal Service may be without a 
suitable remedy until the rate change is permitted for the following 
year. Id. at 9. The Commission, therefore, appreciates the Postal 
Service's filing the 2010 rates well in advance of the August 31, 2009 
UPU deadline.
    In its Notice, the Postal Service indicates that the rates to take 
effect in

[[Page 48614]]

2010 are divided into two tiers.\3\ Tier one applies to postal 
operators with a performance level agreement, such as EMS Pay-for-
Performance Plan participants and Kahala Posts Group members. Tier two 
applies to all other postal operators that transmit EMS to the United 
States. Notice at 2-3. The Postal Service provided a listing of 
countries in each tier, noting that this list may be subject to change 
on January 1, 2010. Id. at 3 and Attachment 3.
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    \3\ The Postal Service states it expects that all members of the 
EMS Cooperative will participate in the Pay-for-Performance Plan. 
Therefore, the former three-tier rate structure is now consolidated 
into two tiers.
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    The Postal Service states that the China Post Group, whose inbound 
EMS rates were established by a bilateral agreement approved by the 
Commission in Docket Nos. CP2008-6 and CP2008-7, is expected to join 
Tier 1. Id. at 3. The parties have agreed that the bilateral agreement 
will expire at the end of the 1-year term. Id.
    The Postal Service maintains that the rates, related financial 
information, and certain portions of the certified statement required 
by 39 CFR 3015.5(c)(2), should remain under seal. Id. at 4.
    In Order No. 271, the Commission gave notice of the docket, 
appointed a Public Representative, requested supplemental information 
pursuant to 39 CFR 3015.6, and provided the public an opportunity to 
comment.\4\
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    \4\ Notice and Order Concerning Filing of Changes in Rates for 
Inbound International Expedited Services 2, August 4, 2009 (Order 
No. 271).
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    The Postal Service submitted responses to the Commission's request 
for supplemental information on August 10, 2009.\5\ In Order No. 271, 
among other things, the Commission requested the Postal Service to 
provide supplemental information including the 2010 EMS Pay-for-
Performance Plan. The Postal Service response indicated this 
information was not yet available. On August 12, 2009, Chairman's 
Information Request No. 1 (CHIR No. 1) was issued requesting the 2009 
EMS Pay-for-Performance Plan by August 14, 2009. On August 13, 2009, 
the Postal Service provided its response to CHIR No. 1 under seal.
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    \5\ Response of the United States Postal Service to Order No. 
271, Notice of Filing Requested Materials Filed Under Seal, August 
10, 2009.
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III. Comments

    Comments were filed by the Public Representative.\6\ No other 
interested parties submitted comments. The Public Representative states 
that each element of 39 U.S.C. 3633(a) appears to be met by the 
proposed Inbound International Expedited Services 2 rate proposal. Id. 
at 2. He further states that the Postal Service has provided adequate 
justification for maintaining confidentiality in this case. Id. at 2-3. 
The Public Representative observes that the rates have been filed in a 
timely manner for the Commission's review and to permit notification to 
the UPU prior to the effective date. Additionally, he notes that the 
instant notice provides a current projection based upon the most recent 
information available and that the participation of the other postal 
administrations in the pricing structure may be subject to change. Id. 
at 4-5. The Public Representative concludes that the Notice comports 
with 39 CFR 3015, 39 U.S.C. 3632 and 3642.
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    \6\ Public Representative Comments in Response to United States 
Postal Service Notice of Filing Changes for Inbound International 
Expedited Services 2, August 13, 2009 (Public Representative 
Comments). The Public Representative filed an accompanying Motion of 
the Public Representative for Late Acceptance of Comments in 
Response to United States Postal Service Notice of Filing Changes 
for Inbound International Expedited Services 2, August 13, 2009. The 
motion is granted.
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IV. Commission Analysis

    The Commission has reviewed the Notice, the supplemental 
information, and the comments filed by the Public Representative.
    Statutory requirements. Planned price changes for competitive 
products are reviewed pursuant to 39 U.S.C. 3633(a) and Commission 
regulations under 39 CFR 3015, which implements section 3633. In brief, 
these statutory and regulatory provisions require each competitive 
product to cover its attributable costs (39 U.S.C. 3633(a)(2)), 
prohibit the subsidization of competitive products by market dominant 
products (39 U.S.C. 3633(a)(1)), and require that competitive products 
collectively make an appropriate contribution to the recovery of the 
Postal Service's total institutional costs.
    Based on the information provided, the Commission finds that the 
proposed rates cover attributable costs, 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, a preliminary review of the proposed rates indicate that the 
rates comport with the provisions applicable to rates for competitive 
products.
    Other considerations. The Postal Service is directed to provide the 
Commission with the 2010 EMS Pay-for-Performance Plan once it is 
approved by the EMS Cooperative of the UPU.
    Based on the record in this proceeding, the Commission finds that 
the proposed rates for Inbound International Expedited Services 2 are 
in accord with the relevant statutory and regulatory requirements of 39 
U.S.C. 3633(a) and 39 CFR 3015.7.

V. Ordering Paragraphs

    It is ordered:
    1. The proposed rates for Inbound International Expedited Services 
2 will take effect January 1, 2010 are in accordance with the relevant 
statutory and regulatory requirements of 39 U.S.C. 3633(a) and 39 CFR 
3015.7.
    2. The Postal Service is directed to provide the Commission the 
2010 EMS Pay-for-Performance Plan as discussed in this order within 30 
days after adoption by the EMS Cooperative of the Universal Postal 
Union.
    3. The Secretary shall arrange for publication of this order in the 
Federal Register.

    Issued: August 19, 2009.

    By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. E9-22862 Filed 9-22-09; 8:45 am]
BILLING CODE 7710-FW-P