[Federal Register Volume 77, Number 232 (Monday, December 3, 2012)]
[Notices]
[Pages 71643-71644]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-29067]


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POSTAL REGULATORY COMMISSION

[Docket No. R2013-1; Order No.1556]


Standard Mail Pricing

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is noticing a recent Postal Service filing 
concerning Standard Mail pricing and related matters. This notice 
informs the public of the filing, invites public comment, and takes 
other administrative steps.

DATES: Comments are due: December 4, 2012.

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

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
at 202-789-6820.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. Summary of Proposed Changes to Standard Mail Rates
III. Nonprofit Discounts
IV. Mail Classification Schedule Changes (MCS)
V. Administrative Actions

I. Background

    In Order No. 1541, the Commission determined provisionally that, 
pursuant to 39 CFR 3010.13(j), the planned adjustments do not violate 
the price cap in 39 U.S.C. 3622(d); are consistent with, or justified 
by an exception to, the workshare discount limitations in 39 U.S.C. 
3622(e); and establish prices that satisfy 39 U.S.C. 3626.\1\ In 
addition, however, the Commission found that the planned Standard Mail 
Flats rates failed to satisfy the applicable directives set forth in 
the FY 2010 Annual Compliance Determination (ACD), which were further 
clarified and reaffirmed in Order No. 1427 and Order No. 1472.\2\ Order 
No. 1541 at 2. Accordingly, the Commission remanded all Standard Mail 
rates to allow the Postal Service to modify its planned rates to comply 
with the FY 2010 ACD and applicable statutory standards. In addition, 
the Commission requested the Postal Service to respond to certain other 
rate matters, each of which is discussed below.
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    \1\ Order No. 1541, Order on Price Adjustments for Market 
Dominant Products and Related Mail Classification Changes, November 
16, 2012 (Order No. 1541).
    \2\ Docket No. ACR2010, Order on Remand, August 9, 2012 (Order 
No. 1427); Docket No. ACR2010-R, Notice and Order Confirming 
Termination of Stay, September 21, 2012 (Order No. 1472).
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    Pursuant to Order No. 1541, on November 26, 2012, the Postal 
Service filed revised prices for Standard Mail Flats.\3\ It also 
addressed the miscellaneous rate matters discussed in Order No. 1541.
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    \3\ United States Postal Service Response to Order No. 1541, 
November 26, 2012 (Response).
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II. Summary of Proposed Changes to Standard Mail Rates

    The revised prices for Standard Mail Flats reflect an above-average 
increase of 2.617 percent. No other Standard Mail prices were changed. 
Response at 3.
    The following table presents the Postal Service's planned 
percentage price changes for Standard Mail products.

                       Standard Mail Price Changes
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                                                               Percent
                   Standard mail product                     change  (%)
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Letters....................................................        2.610
Flats......................................................        2.617
Parcels....................................................        3.081
High Density/Saturation Letters............................        2.059
High Density/Saturation Flats and Parcels..................        2.092
Carrier Route..............................................        2.907
Overall....................................................        2.569
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    To achieve the above-average price increase for the Standard Mail 
Flats product, the Postal Service made two principal changes to its 
initially filed planned Standard Mail Flats price adjustments. First, 
it reduced the prebarcoding discount between automation and non-
automation Flats from 7.5 to 5.5 cents. Second, the Postal Service used 
the correct avoided cost of 4.6 cents for automation 3-Digit Flats. Id. 
at 3-4. As a result of these changes, some rate cells would receive a 
price decrease, so a number of minor mechanical adjustments were also 
made to mitigate the deviation from the desired overall price increase. 
Id. at 4.

[[Page 71644]]

    The Postal Service acknowledges that the Commission's FY 2010 ACD 
Order requested that the Postal Service provide `` `an explanation of 
how the proposed prices will move the Flats cost coverage toward 100 
percent' '' (footnote omitted). Id. It states that given the short 
amount of time allowed to prepare revised rate adjustments and to 
obtain Governors' approval, it has not been able to assess the full 
impact on the revised price increase on Standard Mail Flats' projected 
cost coverage. Id. It also states that although it is complying with 
the Commission's directive by proposing an above-average price increase 
for Standard Mail Flats, it believes that the Commission has 
overstepped its authority by ordering such an increase. Id. at 5.

III. Nonprofit Discounts

    In Order No. 1541, the Commission requested that the Postal Service 
explain why different discount levels for Commercial and Nonprofit 
Standard Mail are consistent with the Postal Accountability and 
Enhancement Act (PAEA) and not contrary to National Easter Seal Society 
v. USPS, 656 F.2d 754 (DC Cir 1981). Order No. 1541 at 51. The Postal 
Service maintains that National Easter Seal Society did not hold that 
phasing in nonprofit discounts would necessarily be discriminatory, but 
rather simply required that the Postal Service have a reasonable ground 
for the phased in schedule. Response at 6.
    The Postal Service states that ``[t]he varying presort discounts 
among Commercial and Nonprofit Standard Mail arise from the complex 
task of designing rates that comply with 39 U.S.C. 3626(a)(6),'' which 
requires that the average revenue per piece from nonprofit products 
equal, as nearly as practicable, 60 percent of the average revenue per 
piece from the corresponding Commercial products. Id. The complexity of 
this task may ``preclude[] the Postal Service from making Nonprofit 
presort discounts identical to Commercial presort discounts without 
setting the Nonprofit base rate higher than would be most efficient or 
preferable from a policy perspective.'' Id. at 7.
    The Postal Service points out that, in both previous rate cases and 
the current docket, some nonprofit discounts have varied from the 
corresponding Commercial presort discounts. Id. The Postal Service also 
filed updated pages reflecting worksharing discounts and benchmarks for 
Flats, High Density and Saturation Letters, and High Density and 
Saturation Flats/Parcels in Attachment B to its Response. It has shown 
nonprofit discounts on a separate line when they differ from Commercial 
discounts, along with the other discounts in the relevant category. Id. 
Attachment B. The Postal Service states that the passthroughs for 
nonprofit discounts are all at 100 percent or below, and can be 
justified the same way as the corresponding Commercial discounts.\4\ 
Id. at 8.
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    \4\ The Postal Service also refers to Order No. 1541 n.65 in 
Attachment C of its Response, regarding the High Density Plus rate 
category.
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IV. Mail Classification Schedule Changes (MCS)

    In conformance with 39 CFR 3010.14(b)(9), the Postal Service 
identifies changes to the Standard Mail Flats MCS. Attachment A to the 
Response presents price and classification changes.

V. Administrative Actions

    Public comment period. The Commission`s rules provide a period of 
10 days from the date of the Postal Service's filing for public 
comment. 39 CFR 3010.13(f). The Postal Service plans to implement the 
planned prices on January 27, 2013. To permit the Commission to fully 
consider this matter and to enable the Postal Service to provide the 
requisite 45 day notice before implementing the planned prices, the 
Commission finds it appropriate to shorten the comment period. Comments 
by interested persons are due no later than December 4, 2012.
    Interested persons are encouraged to review the Postal Service's 
Response and workpapers in their entirety.
    Pursuant to Commission rule 3010.13(f), comments should address 
subjects identified in rule 3010.13(b) and may address the substance of 
the Postal Service's Response.
    Participation and designated filing method. Interested persons are 
not required to file a notice of intervention prior to submitting 
comments. Instead, they are to submit comments electronically via the 
Commission's Filing Online system, unless a waiver is obtained. 
Instructions for obtaining an account to file documents online may be 
found on the Commission's Web site, (http://www.prc.gov), or by 
contacting the Commission's docket section at [email protected] or 
via telephone at 202-789-6846.
    Persons without access to the Internet or otherwise unable to file 
documents electronically may request a waiver of the electronic filing 
requirement by filing a motion for waiver with the Commission. The 
motion may be filed along with any comments the person may wish to 
submit in this docket. Persons requesting a waiver may file hardcopy 
documents with the Commission either by mailing or by hand delivery to 
the Office of the Secretary, Postal Regulatory Commission, 901 New York 
Avenue NW., Suite 200, Washington, DC 20268-0001 during regular 
business hours by the date specified for such filing. Any person 
needing assistance in requesting a waiver may contact the Commission's 
docket section at [email protected] or via telephone at 202-789-6846. 
Hardcopy documents will be scanned and posted on the Commission's Web 
site.
    Public Representative. Kenneth E. Richardson will continue to serve 
as Public Representative in this proceeding.\5\
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    \5\ See Order No. 1501, Notice and Order on Planned Rate 
Adjustments and Classification Changes for Market Dominant Postal 
Products, October 15, 2012, at 16.
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    It is ordered:
    1. Comments by interested persons on the planned price adjustments 
are due no later than December 4, 2012.
    2. The Commission directs the Secretary of the Commission to 
arrange for prompt publication of this notice in the Federal Register.

    By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. 2012-29067 Filed 11-30-12; 8:45 am]
BILLING CODE 7710-FW-P