[Federal Register Volume 75, Number 93 (Friday, May 14, 2010)]
[Notices]
[Pages 27375-27377]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-11512]


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POSTAL REGULATORY COMMISSION

[Docket No. MC2010-24; Order No. 457]


Review of Nonpostal Services Language

AGENCY:  Postal Regulatory Commission.

ACTION:  Notice.

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SUMMARY:  The Commission is establishing a docket to consider the 
Postal Service's proposed nonpostal services Mail Classification 
Schedule language. It solicits comments to assist in this task.

DATES:  Comments are due: June 4, 2010. Reply comments are due: June 
18, 2010.

[[Page 27376]]


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 the For 
Further Information Contact section by telephone for advice on 
alternatives to electronic filing.

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

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
II. Postal Service Filings
III. Notice of Filings
IV. Ordering Paragraphs

I. Introduction

    Pursuant to section 404(e) of title 39, the Commission in Order No. 
154 authorized 14 activities of the Postal Service to continue as 
``nonpostal services.''\1\ By this notice, the Commission initiates 
Docket No. MC2010-24 to consider the Postal Service's proposed Mail 
Classification Schedule (MCS) language for its authorized nonpostal 
services.
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    \1\ Docket No. MC2008-1, Review of Nonpostal Services Under the 
Postal Accountability and Enhancement Act, December 19, 2008 (Order 
No. 154); see also Errata Notice, January 9, 2009 (Errata), petition 
denied, United States Postal Service v. Postal Regulatory 
Commission, 2010 WL 1189617 No. 09-1032 (CADC, March 30, 2010).
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II. Postal Service Filings

    While the proceedings resulting in Order No. 154 were ongoing, the 
Postal Service filed proposed MCS language for six activities which the 
Postal Service identified as nonpostal services.\2\ Of the six 
activities, Order No. 154 provisionally accepted language for four 
nonpostal services for insertion into the MCS.\3\
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    \2\ The proposed language included the following six activities: 
Officially Licensed Retail Products (OLRP), Passport Photo Service, 
Photocopying Service, Electronic Postmark (EPM), Notary Public 
Services, and Stored Value Cards. Docket No. MC2008-1, United States 
Postal Service Notice of Filing of Proposed Mail Classification 
Schedule Language for Six Nonpostal Services Pursuant to Order No. 
120, November 7, 2008. For the convenience of interested persons, 
the Mail Classification Schedule language proposed by the Postal 
Service in this filing and two other filings, dated March 10, 2009 
and April 26, 2010 and discussed further below, is attached to this 
order for illustrative purposes and will not be published in the 
Federal Register. The language is available on the Commission's Web 
site (http://www.prc.gov).
    \3\ Notary Public Services and Stored Value Cards were not 
authorized as nonpostal services. Order No. 154 at 40, 89.
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    Further, Order No. 154 required the Postal Service to file proposed 
MCS language for the 10 other nonpostal services that it authorized. 
Id. at 90.\4\ In response to Order No. 154, the Postal Service filed a 
notice of proposed MCS language for those nonpostal services.\5\ One 
service, the Warranty Repair Program, had been temporarily allowed 
subject to review in Phase II of that proceeding. At the conclusion of 
Phase II, the Warranty Repair Program was ordered terminated. 
Therefore, consideration of the proposed language for that product is 
moot.\6\ The Postal Service's Notice proposes to realign and combine 
these authorized nonpostal services into eight products.
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    \4\ Of the 10 authorized nonpostal services, Philatelic Sales 
and MoverSource were classified as market dominant. The remaining 
eight authorized nonpostal services classified as competitive were 
Affiliates for Website, Affiliates--Other (Linking Only), FedEx Drop 
Boxes, Licensing Programs Other Than Officially Licensed Retail 
Products, Meter Manufacturers Marketing Program, Non-Sale Lease 
Agreements (Non-Government), Training Facilities, and Warranty 
Repair Program (in part, subject to review in Phase II). See Errata 
at Appendix I, Part B.
    \5\ United States Postal Service Notice of Filing of Proposed 
Mail Classification Schedule Language for Nonpostal Activities in 
Response to Order No. 154, March 10, 2009 (Notice).
    \6\ The Warranty Repair Program failed to meet the grandfather 
requirement for a nonpostal service under section 404(e) of title 39 
insofar as it relates to the provision of service to others. Docket 
No. MC2008-1(Phase II), Phase II Review of Nonpostal Services Under 
the Postal Accountability and Enhancement Act, January 14, 2010, at 
31, 39 (Order No. 392); appeals docketed, Le Page's 2000 Inc. and Le 
Page's Products, Inc. v. Postal Regulatory Commission, No. 10-1031 
(CADC, February 12, 2010) consolidated with United States Postal 
Service v. Postal Regulatory Commission, No. 10-1033 (CADC, February 
12, 2010). The decision in Phase II regarding the Warranty Repair 
Program was not appealed and is final.
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    The eight renamed nonpostal services are classified as follows: 
Market Dominant--Alliances with the Private Sector to Defray Cost of 
Key Postal Functions, and Philatelic Sales; Competitive--Rental, 
Leasing, Licensing or Other Non-Sale Disposition of Tangible Property; 
Advertising; Mail Services Promotion; Training Facilities and Related 
Services; Licensing of Intellectual Property Other than OLRP; and 
Equipment Repair Service.
    For the two market dominant nonpostal products, the Postal Service 
does not propose to realign Philatelic Sales. The Postal Service 
proposes to align the other market dominant service, MoverSource, an 
alliance with a private sector company to provide change-of-address 
assistance, with another alliance, WhitePages. For each of these latter 
activities, costs are defrayed through advertising solicited by the 
private sector entity. The Postal Service proposes to entitle this 
product ``Alliances with the Private Sector to Defray Cost of Key 
Postal Functions.'' Id. at 7.
    With respect to Philatelic Sales, the Postal Service filed a notice 
of amendment to its proposed MCS language to incorporate into the 
nonpostal Philatelic Sales product its current shipping charges for 
philatelic order fulfillment.\7\ The amendment reflects the Postal 
Service's proposed method for reflecting shipping fees in the MCS 
pursuant to Commission Order No. 391.\8\
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    \7\ Notice of the United States Postal Service of Amendment to 
Mail Classification Schedule Language for Nonpostal Activities 
Required to be Filed by Order No. 154, April 26, 2010.
    \8\ Docket No. MC2009-19, Order Approving Addition of Postal 
Service to the Mail Classification Schedule Product Lists, January 
13, 2010, at 12-15 (Order No. 391).
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    Web-based linking agreements are divided into three separate 
categories. Agreements providing links to merchants' Web sites are 
styled ``Advertising.''\9\ Agreements to list a vendor on usps.com and 
to promote a vendor's mailing services or product are entitled ``Mail 
Services Promotion.'' Id. at 8. The third category of web-based 
alliances is the aforementioned market dominant MoverSource-WhitePages 
alignment.
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    \9\ The Postal Service cites as current agreements Maponics, 
Label Universe, and Mail Service Provider agreements. Id. at 8.
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    The Postal Service proposes to maintain the alignment of services 
described in Order No. 154 for Training Facility and Licensing of 
Intellectual Property Other Than OLRP.\10\ Id. at 6. The Postal Service 
restyles ``Training Facility'' as ``Training Facilities and Related 
Services.'' Id. at Appendix A.
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    \10\ In Order No. 392, the Commission limited the scope of its 
licensing authorization by denying authorization for Postal Service 
branding of mailing and shipping products related to Postal Service 
operations for general retail distribution. Order No. 392 at 39; 
appeals docketed, see note 6, infra. The Postal Service has not 
filed to amend its proposed language for ``Licensing of Intellectual 
Property Other Than OLRP'' to conform to Order No. 392.
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    The Postal Service proposes to rename some competitive nonpostal 
services to reflect more accurately the nature of the activities within 
each service. Id. at 3. The Postal Service asserts that to reduce 
potential confusion, some nonpostal activities are realigned to be 
independent of the names of current vendors or programs, or the 
location of the activity. This permits the Postal Service to enter into 
a similar agreement with others, or to accept advertising for other 
products in other venues. Id. at 4. Some similar services are grouped 
together such as certain web-based agreements within the broader 
category of Advertising. Id. at 4-5. Additionally, the Postal Service

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requests that web-based linking agreements providing links to merchant 
websites be treated as price categories rather than separate products 
pending review in a rulemaking on the form and content of rules for 
nonpostal services. Id. at 5. The Postal Service asserts that 
designating the linking agreements as price categories pending further 
review removes uncertainty as to whether a section 3642 proceeding to 
add new products to the MCS would be required for any new web-based 
linking agreements. Id.
    The nonpostal service described in Order No. 154 as Non-Sale Lease 
Agreements (Non-Government) includes leasing of parking facilities, 
office space, antenna towers, advertising, storage, and retail lobby 
space. Order No. 154 at 66. Non-sale dispositions of real property are 
sometimes structured as a ``license'' of real property. Notice at 9-10. 
The FedEx Drop Boxes arrangement identified in Order No. 154 as a 
separate nonpostal service also involves the licensing or rental of 
real property. Id. at 10.
    The Postal Service notes that the Commission did not specifically 
address the rental of personal property in Order No. 154 and proposes 
to include the rental of equipment such as forklifts within this group. 
The Postal Service further notes that for years it has rented personal 
property such as exercise and audio visual equipment as part of its 
training facilities operations, but charges are accounted for as part 
of the training operations, and the Postal Service does not recommend 
including them in this description. Id. The Postal Service proposes to 
retitle this group of activities ``Leasing, Licensing and Other Non-
Sale Disposal of Tangible Property.'' Id.

III. Notice of Filings

    The Commission establishes Docket No. MC2010-24 for consideration 
of the Postal Service's proposed language for nonpostal products 
attached to this order to be included in the MCS.
    As noted above, the MCS language recognized by the Postal Service 
is attached to this order. Part 3020 of the Commission's rules provides 
for establishing product lists. Subpart A of the current MCS rules 
includes provisions for nonpostal products. 39 CFR 3020.13(a)(6) and 
(b)(5). Subpart B provides for changes to the product lists initiated 
by the Postal Service. The Commission will treat the Postal Service's 
filings as a unified request to modify the product lists.\11\
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    \11\ Because the Postal Service's filings are pursuant to 
Commission orders, the filing requirements of subpart B shall, to 
the extent necessary, be waived.
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    Under section 3020.34 of the rules, upon review of these Postal 
Service filings together with comments of interested parties, the 
Commission may approve the requests, institute further proceedings, 
permit the Postal Service an opportunity to modify its request, or take 
other appropriate action. Pursuant to 39 U.S.C. 404(e)(5) and 39 CFR 
3020.33, the Commission provides interested persons an opportunity to 
express views and offer comments on the planned modifications and 
whether they are consistent with the policies of 39 U.S.C. 3642.
    Comments on the proposed nonpostal services MCS language filed by 
the Postal Service are due no later than June 4, 2010. Reply comments, 
if any, are due June 18, 2010.
    Pursuant to 39 U.S.C. 505, Emmett Rand Costich is appointed to 
serve as officer of the Commission (Public Representative) to represent 
the interests of the general public in the above-captioned docket.

IV. Ordering Paragraphs

    It is ordered:
    1. Docket No. MC2010-24 is established to consider the Postal 
Service's proposed nonpostal product Mail Classification Schedule 
language filed with its notices of March 10, 2009 and April 26, 2010, 
together with the nonpostal service Mail Classification Schedule 
language for four nonpostal services filed November 7, 2008 referred to 
in the body of this order.
    2. Docket No. MC2009-20 is closed.
    3. Comments are due no later than June 4, 2010.
    4. Reply comments are due no later than June 18, 2010.
    5. The Commission appoints Emmett Rand Costich as Public 
Representative to represent the interests of the general public in this 
proceeding.
    6. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. 2010-11512 Filed 5-13-10; 8:45 am]
BILLING CODE 7710-FW-S