[Federal Register Volume 77, Number 131 (Monday, July 9, 2012)]
[Notices]
[Pages 40387-40389]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-16589]


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POSTAL REGULATORY COMMISSION

[Docket No. R2012-9; Order No. 1389]


Price Adjustment

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is noticing a recently filed Postal Service 
request to adjust prices for several market dominant products within 
First-Class Mail and Standard Mail. This notice addresses procedural 
steps associated with the filing.

DATES: Comments are due: July 17, 2012.

ADDRESSES: Submit comments electronically via the Commission's

[[Page 40388]]

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 
at 202-789-6820.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Introduction
II. Postal Service Filing
III. Commission Action

I. Introduction

    On June 27, 2012, the Postal Service filed a notice with the 
Commission announcing its intent to adjust prices for several market 
dominant products within First-Class Mail and Standard Mail pursuant to 
39 U.S.C. 3622 and 39 CFR 3010.\1\ The adjustment is a 2-percent 
discount on the prices for First-Class Mail and Standard Mail letters, 
flats, and cards (presort and automation), which include a qualifying 
mobile barcode or similar print technology inside or on the qualifying 
mailpieces (Mobile Shopping Promotion). Notice at 1. The Mobile 
Shopping Promotion is proposed to take effect at 12:01 a.m. on November 
7, 2012 and will expire at 11:59 p.m. on November 21, 2012. Id.
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    \1\ United States Postal Service Notice of Market-Dominant Price 
Adjustment, June 27, 2012 (Notice).
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II. Postal Service Filing

    Incentive program. The Postal Service proposes an upfront 2-percent 
discount on First-Class Mail and Standard Mail letters, flats, and 
cards (presort and automation) that include, in or on the mailpiece, a 
mobile barcode (or other print/mobile technology). Id. This technology 
must direct the recipients of the mailpieces to a mobile-optimized Web 
site that allows them to purchase an advertised product on the mobile 
device. The Postal Service also proposes to allow mailers to qualify 
for an extra 1-percent rebate on their qualifying mailings, if a 
portion of their orders is fulfilled via Priority Mail[supreg] between 
November 9, 2012 and December 31, 2012. Id. at 1-2. In order to claim 
the rebate, mailers would be required to demonstrate that the number of 
Priority Mail packages delivered to customers exceeded 0.5 percent of 
the total number of qualifying mailpieces sent during the Mobile 
Shopping Promotion. Id. at 7. Mailers may submit applications for this 
rebate between January 1, 2013 and February 15, 2013. Id. at 9.
    Participants will be required to register for and accept the terms 
of the Mobile Shopping Promotion at least 2 hours prior to their first 
qualifying mailing. Id. at 7-8. Participants must disclose which 
permits will be participating in the Mobile Shopping Promotion and 
agree to participate in a survey at the end of the promotional period. 
Id. at 8. The Postal Service plans to open registration around 
September 15, 2012. Id.
    The Postal Service will require the mailings to be submitted 
electronically via mail.dat, mail.xml, or Postal Wizard. Mailers must 
affirmatively claim the Mobile Shopping Promotion on their electronic 
postage submissions and certify that each mailpiece meets the 
requirements. Mailers must claim the Mobile Shopping Promotion discount 
at the time of mailing. Id. Postage must be paid using a permit 
imprint, pre-cancelled stamp permit, or qualifying meter mail. Id. at 
8-9.
    Standard Mail Flats compliance with 39 U.S.C. 101(d). In its FY2010 
Annual Compliance Determination Report, the Commission directed the 
Postal Service to increase the cost coverage of the Standard Mail Flats 
product through a combination of above-average price adjustments and 
cost reductions.\2\ The Postal Service acknowledges that the Mobile 
Shopping Promotion will have the short-term effect of lowering postage 
revenues from Standard Mail Flats. However, it contends that the long-
term effect will be to encourage future revenue growth by improving the 
value of direct mail to advertisers. Notice at 10. Also, the Postal 
Service expects the revenue loss to be much smaller than the loss 
expected from the Mobile Shopping Promotion approved by the Commission 
in Docket No. R2012-6. Id. at 13.
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    \2\ Docket No. ACR2010, Annual Compliance Determination Report, 
March 29, 2011 at 106.
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    Impact on the price cap. The Postal Service will not calculate the 
cap implication of the discount as described in rule 3010.14(b)(1) 
through (4). Id. at 14. The Postal Service states that, consistent with 
past limited-availability discounts, it intends to essentially ignore 
the effect of the price decrease resulting from the program on the 
price cap for both future and current prices. Id.
    Objectives and factors, workshare discounts, and preferred rates. 
The Postal Service lists the relevant objectives and factors of 39 
U.S.C. 3622, and claims the program to a large extent ``does not 
substantially alter the degree to which First-Class Mail and Standard 
Mail prices already address'' the objectives and factors. Id. at 16. In 
particular, the Postal Service contends that the Mobile Shopping 
Promotion is an example of the increased pricing flexibility under the 
Postal Accountability and Enhancement Act (objective 4), and will 
encourage new mail volumes, which will have the effect of enhancing the 
financial position of the Postal Service (objective 5). Id. at 16. 
Similarly, the Postal Service claims that the Mobile Shopping Promotion 
encourages increased mail volume (factor 7) and will not imperil the 
ability of First-Class Mail or Standard Mail to cover its attributable 
costs (factor 2). Id. at 18.
    According to the Postal Service, the Mobile Shopping Promotion will 
not impact current workshare discounts. Id. As the Mobile Shopping 
Promotion does not exclude any mailers, the Postal Service asserts that 
it will not affect compliance with any preferred rate requirements. Id. 
at 19.
    Mail Classification Schedule (MCS). The Postal Service provides 
proposed MCS language in Appendix A of its notice. It outlines the 
proposed changes in the MCS for the relevant products. Id. Appendix A.

III. Commission Action

    The Commission establishes Docket No. R2012-9 to consider all 
matters related to the notice. 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 3010. Comments are due no later 
than July 17, 2012.
    The Commission appoints Katalin K. Clendenin to represent the 
interests of the general public in this proceeding.
    It is ordered:
    1. The Commission establishes Docket No. R2012-9 to consider 
matters raised by the Postal Service's June 27, 2012 notice.
    2. Interested persons may submit comments on the planned price 
adjustments. Comments are due no later than July 17, 2012.
    3. Pursuant to 39 U.S.C. 505, Katalin K. Clendenin is appointed to 
serve as an officer of the Commission (Public Representative) to 
represent the interests of the general public in this proceeding.
    4. The Secretary shall arrange for publication of this order in the 
Federal Register.


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    By the Commission.
Ruth Ann Abrams,
Acting Secretary.
[FR Doc. 2012-16589 Filed 7-6-12; 8:45 am]
BILLING CODE 7710-FW-P