[Federal Register Volume 77, Number 247 (Wednesday, December 26, 2012)]
[Notices]
[Pages 76091-76092]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-30942]


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POSTAL REGULATORY COMMISSION

[Docket No. CP2013-28; Order No. 1587]


International Mail Contract

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is noticing a recently-filed Postal Service 
request concerning a contingent pricing arrangement related to an 
international mail contract. This document invites public comments on 
the request and addresses several related procedural steps.

DATES: Comments are due: December 27, 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. Introduction
II. Notice of Filing
III. Commission Action
IV. Ordering Paragraphs

I. Introduction

    On December 14, 2012, the Postal Service filed notice of a 
contingency price arrangement (Pricing Arrangement) pursuant to a 
provision in an expired International Business Reply Service (IBRS) 
competitive contract.\1\ The Postal Service intends for the new prices, 
which apply to certain postage-prepaid items returned from overseas 
locations to a U.S.-based entity, to begin

[[Page 76092]]

January 1, 2013 and to continue indefinitely. Id. Attachment 1 at 1.
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    \1\ Notice of United States Postal Service of Prices Under 
Functionally Equivalent International Business Reply Service 
Competitive Contract 1 Negotiated Service Agreement, December 14, 
2012 (Notice). The Notice was filed pursuant to 39 CFR 3015.5. 
Notice at 1.
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    The Postal Service requests that the Commission include the Pricing 
Arrangement within the IBRS Competitive Contract 1 product on the 
competitive products list based on its functional equivalence to IBRS 
contracts in Docket Nos. CP2009-20 and CP2009-22. Id. at 4.

II. Contents of Filing

    The filing includes a Notice and the following attachments:
     Attachment 1--a redacted copy of the Postal Service's 
notice to the customer concerning the intended application of 
contingency prices;
     Attachment 2--a redacted copy of the certification under 
39 CFR 3015.5(c)(2);
     Attachment 3--a redacted copy of Governors' Decision No. 
08-24; and
     Attachment 4--an application for non-public treatment of 
material filed under seal.
    The Postal Service also provided a redacted copy of the Pricing 
Arrangement and supporting financial documentation as a public Excel 
file. Id. at 5.
    Product history. The Commission added International Business Reply 
Service Contract 1 to the competitive product list in Order No. 178, 
following consideration in two baseline cases.\2\ The controlling 
Governors' Decision is No. 08-24. Id. at 1-2.
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    \2\  See Docket Nos. M2009-14 and CP2009-20.
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    IBRS competitive contracts are for U.S.-based entities that seek a 
channel for returned merchandise or other articles from their overseas 
customers. These entities typically supply preprinted, prepaid IBRS 
packaging in which overseas customers can place used or defective 
consumer items and enter them into the mailstream at no direct cost. 
Id. at 1. The Postal Service's contracting partner is the recipient of 
IBRS items, not the sender, and therefore has no control over the 
contingency that IBRS items might be tendered after expiration of the 
contract. Id. at 2. Given that costs are incurred in accepting and 
delivering these items, the Postal Service and its IBRS contracting 
partners have agreed to let the Postal Service set prices to cover 
costs and potentially incentivize customers to enter into new 
arrangements. Id.
    Instant docket. The contract that triggered the prices in the 
Pricing Arrangement was executed before the Commission's current rules 
for competitive and market dominant products took effect. Id. That 
contract expired March 31, 2008 and no successor contract was executed. 
The Postal Service asserts that the prices in the Pricing Arrangement 
occur under a surviving contractual term. Id. It expects the prices to 
apply to an extremely small number of postal items due to the mailer's 
profile and the passage of time since expiration of the contract. Id. 
at 4.
    Related dockets. The Postal Service states that it has filed three 
previous notices of changes in contingency prices under the underlying 
expired contract (covering calendar years 2010, 2011 and 2012), and 
that the Commission has added each pricing arrangement to the 
competitive product list under the IBRS Competitive Contract 1 product 
based on functional equivalence. Id. at 3-4. The Postal Service 
addresses several points about the status of the underlying contract 
under Commission rules, and concludes that filing materials under 39 
CFR 3015.5, as it has done here, resolves any inconsistency. Id. at 4.
    Functional equivalency. The Postal Service asserts that the Pricing 
Arrangement is essentially identical to those envisioned in the 
contracts the Commission included in the IBRS Competitive Contract 1 
product in Docket Nos. CP2009-20 and CP2009-22, with minor procedural 
variations due to different negotiation outcomes. Id. at 5-6. It 
asserts that the nature of the service provided in all three contracts 
is essentially the same. Id. at 6. The Postal Service also incorporates 
by reference its position on functional equivalence in Docket No. 
CP2009-22. Id. at 6.

III. Commission Action

    The Commission establishes Docket No. CP2013-28 for consideration 
of matters raised in the Notice. The Commission invites comments on 
whether the Pricing Arrangement is consistent with the requirements of 
39 CFR 3015.5 and the policies of 39 U.S.C. 3632 and 3633. The 
Commission also invites comments on the Postal Service's intention to 
have the new contingency prices apply indefinitely. Comments are due no 
later than December 27, 2012. The public portions of the Postal 
Service's filing can be accessed via the Commission's Web site at 
http://www.prc.gov. Information on how to obtain access to nonpublic 
material appears at 39 CFR 3007.40.
    The Commission appoints James F. Callow to represent the interest 
of the general public (Public Representative) in this case.

IV. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket No. CP2013-28 to consider 
matters raised by the Postal Service's Notice.
    2. Pursuant to 39 U.S.C. 505, James F. Callow is appointed to serve 
as officer of the Commission (Public Representative) to represent the 
interests of the general public.
    3. Comments by interested persons in this proceeding are due no 
later than December 27, 2012.
    4. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. 2012-30942 Filed 12-21-12; 8:45 am]
BILLING CODE 7710-FW-P