[Federal Register Volume 74, Number 227 (Friday, November 27, 2009)]
[Pages 62357-62358]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-28377]



[Docket Nos. MC2010-11 and CP2010-11; Order No. 345]

New Postal Product

AGENCY:  Postal Regulatory Commission.

ACTION:  Notice.


SUMMARY:  The Commission is noticing a recently-filed Postal Service 
request to add Inbound Air Parcel Post at Universal Postal Union (UPU) 
Rates to the Competitive Product List. The Postal Service has also 
filed a related contract. This notice addresses procedural steps 
associated with these filings.

DATES:  Comments are due: December 7, 2009.

ADDRESSES:  Submit comments electronically via the Commission's Filing 
Online system at http://www.prc.gov. Commenters who cannot submit their 
views electronically should contact the person identified in FOR 
FURTHER INFORMATION CONTACT by telephone for advice on alternatives to 
electronic filing.

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

I. Introduction
II. Notice of Filing
III. Ordering Paragraphs

I. Introduction

    On November 17, 2009, the Postal Service filed a request pursuant 
to 39 U.S.C. 3642 and 39 CFR 3020.30 et seq. to add Inbound Air Parcel 
Post at Universal Postal Union (UPU) Rates to the Competitive Product 
List.\1\ The Postal Service asserts that Inbound Air Parcel Post is a 
competitive product within the meaning of 39 U.S.C. 3632(b)(3).

    \1\ Request of the United States Postal Service to Add Inbound 
Air Parcel Post at Universal Postal Union (UPU) Rates to the 
Competitive Products List, Notice of Establishment of Prices and 
Classifications Not of General Applicability for Inbound Air Parcel 
Post at UPU Rates Established in Governors' Decision No, 09-15, and 
Application for Non-Public Treatment of Materials Filed Under Seal, 
November 17, 2009 (Request).

    The Postal Service states that prices and classifications 
underlying these rates are supported by Governors' Decision No. 09-
15.\2\ Id. at 1-2. This

[[Page 62358]]

Request has been assigned Docket No. MC2010-11.

    \2\ The Request and Governors' Decision both note that the 
classification for Inbound Air Parcel Post was originally proposed 
by the Postal Service for the Mail Classification Schedule language 
in response to PRC Docket No. RM2007-1, Order No. 43, Order 
Establishing Ratemaking Regulations for Market Dominant and 
Competitive Products, October 29, 2007 (Order No. 43). Id. at 1.

    The Postal Service states that Governors' Decision No. 09-15 
establishes the prices for Inbound Air Parcel Post at UPU Rates and the 
changes in classification necessary to implement those prices. Id. at 
3. The rates authorized by Governors' Decision No. 09-15 are inward 
land rates when there is no contractual relationship with the tendering 
postal operator at the highest possible inward land rate eligible for 
the United States under the Parcel Post regulations. Id. These rates 
are assigned Docket No. CP2010-11.
    Request. In support of its Request, the Postal Service filed the 
following materials: (1) An application for non-public treatment of 
pricing and supporting documents filed under seal;\3\ (2) a Statement 
of Supporting Justification as required by 39 CFR 3020.32;\4\ (3) a 
redacted version of Governors' Decision No. 09-15 establishing prices 
and classifications for Inbound Air Parcel Post at UPU Rates, 
certification of the Governors' vote, a certification of compliance 
with 39 U.S.C. 3633 (a), proposed Mail Classification Schedule (MCS) 
language, and a Management Analysis of Inbound Air Parcel Post at UPU 

    \3\ Attachment 1 to the Request.
    \4\ Attachment 2 to the Request.
    \5\ Attachment 3 to the Request.

    Air parcels comprise inbound parcels eligible to receive 
transportation by air rather than surface. Governors' Decision No. 09-
15 at 2. The Postal Service indicates that the United States receives 
both air and surface parcels from foreign postal administrations which 
compensate the Postal Service for delivery of these parcels in the 
United States. Request at 2. It maintains that it has negotiated 
separate agreements for parcel rates with certain foreign posts, but 
most compensate it at the United States default rates for inbound 
parcel delivery. Id. The default rates are known as inward land rates. 
The Postal Service notes that inward land rates are set according to 
formulas in the UPU Parcel Post Regulations which constitute 
international law. Id. More specifically, the UPU Postal Operations 
Council sets rates.\6\ The Postal Service states that UPU Parcel Post 
Regulations require that rates are based on a percentage of each 
member's inward land rate in 2004. Id. at 3. UPU members may qualify 
for percentage ``bonuses'' to their base rate based upon their 
provision of certain value-added services.\7\ Id. The Postal Service 
states it is responsible for gathering information that the UPU Postal 
Operations Council uses to calculate the rates including completion of 
a questionnaire on service bonus eligibility, and submission of annual 
inflation information from the Consumer Price Index for All Urban 
Consumers. Id. It explains that the UPU uses this information from the 
member posts and publishes an annual notice in the fall establishing 
the postal administration's parcel rates for the following year. Id.

    \6\ The UPU Postal Operations Council is a designated body of 
the UPU which is responsible for rate setting.
    \7\ The Postal Service states that services such as ``track and 
trace, home delivery, published delivery standards, and use of a 
common inquiry system'' qualify UPU members for bonuses. Id. Members 
may also seek an inflation-related adjustment to the base rate which 
is capped at 5 percent per year.

    The Postal Service states that because of the unique situation of 
setting inward land rates, it chose to establish rates for inbound air 
parcels by reference to the Universal Postal Convention. Id.
    In the Statement of Supporting Justification, Brian Hutchins, 
Manager, International Postal Relations, asserts that adding Inbound 
Air Parcel Post at UPU Rates to the competitive product list improves 
the Postal Service's competitive posture, 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 2. Thus, Mr. 
Hutchins contends there will be no issue of subsidization of 
competitive products by market dominant products as a result of this 
product addition. Id.
    W. Ashley Lyons, Manager, Regulatory Reporting and Cost Analysis, 
Finance Department, certifies that the contract complies with 39 U.S.C. 
3633(a). Request, Attachment 3. He asserts that the prices for Inbound 
Air Parcel Post at UPU Rates ``should cover its attributable costs and 
preclude the subsidization of competitive products by market dominant 
products.'' Id.
    The Postal Service filed much of the supporting materials under 
seal. In its Request, the Postal Service maintains that certain 
portions of Governors' Decision 09-15 and related financial information 
should remain confidential including portions of the management 
financial analysis of Inbound Air Parcel Post at UPU Rates and the 
accompanying analyses that provide prices, terms, conditions, cost 
data, and financial projections should remain under seal. Request at 2. 
Prices and classification changes established in Governors' Decision 
No. 09-15 are scheduled to take effect January 1, 2010. Governors' 
Decision No. 09-15 at 2.

II. Notice of Filings

    The Commission establishes Docket Nos. MC2010-11 and CP2010-11 for 
consideration of the Request pertaining to the proposed Inbound Air 
Parcel Post at UPU Rates product and the related rates and 
classifications, 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.
    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, 39 CFR part 3015, and 39 CFR 
3020 subpart B. Comments are due no later than December 7, 2009. The 
public portions of these filings can be accessed via the Commission's 
Web site http://www.prc.gov.
    The Commission appoints Paul L. Harrington to serve as Public 
Representative in these dockets.

III. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket Nos. MC2010-11 and CP2010-11 
for consideration of the matters raised in each docket.
    2. Pursuant to 39 U.S.C. 505, Paul L. Harrington 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 are due no 
later than December 7, 2009.
    4. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Judith M. Grady,
Acting Secretary.
[FR Doc. E9-28377 Filed 11-25-09; 8:45 am]