[Federal Register Volume 78, Number 228 (Tuesday, November 26, 2013)]
[Notices]
[Pages 70600-70601]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-28259]


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POSTAL REGULATORY COMMISSION

[Docket No. R2014-3; Order No. 1882]


International Mail Contract

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is noticing a recent Postal Service filing 
concerning a bilateral rate and service agreement with Canada Post 
Corporation. This notice informs the public of the filing, invites 
public comment, and takes other administrative steps.

DATES: Comments are due: December 2, 2013.

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. The Postal Service's Filings
III. Commission Action
IV. Ordering Paragraphs

I. Introduction

    Background. On November 15, 2013, the Postal Service filed notice, 
pursuant to 39 CFR 3010.40 et seq., announcing that it has entered into 
a bilateral agreement (Agreement) with Canada Post Corporation (Canada 
Post), along with a Type 2 rate adjustment.\1\ It asks that the 
Commission include the Agreement within the Inbound Market-Dominant 
Multi-Service Agreements with Foreign Postal Operators I (MC2010-35) 
product on grounds of functional equivalence.
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    \1\ Notice of United States Postal Service of Type 2 Rate 
Adjustment, and Notice of Filing Functionally Equivalent Agreement, 
November 15, 2013 (collectively, Notice).
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II. The Postal Service's Filings

    Compliance with filing requirements. In addition to the Notice, the 
Postal Service filed an application for non-public treatment of 
materials filed under seal (Attachment 1); a redacted copy of the 
Canada Post Agreement (Attachment 2), filed separately; \2\ and a 
redacted Excel file with supporting financial documentation. Notice at 
2. The Postal Service also filed unredacted copies of the Agreement and 
the supporting financial documentation under seal. Id. On November 18, 
2013, the Postal Service filed with the Commission the non-public 
version of the relevant portion of the bilateral agreement and 
financial workpapers.\3\
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    \2\ The Postal Service initially filed Notice of United States 
Postal Service of Filing Attachment 2 to Notice of Type 2 Rate 
Adjustment, and Notice of Filing Functionally Equivalent Agreement, 
November 15, 2013. It later filed United States Postal Service 
Notice of Filing of Replacement Attachment 2 to Notice of Filing 
Type 2 Rate Adjustment--Errata, November 18, 2013 (Attachment 2). 
For purposes of Commission review, the most recent filing of 
Attachment 2, submitted November 18, 2013, will be used in its 
review.
    \3\ See Notice of the United States Postal Service of Non-Public 
Filing of Agreement and Financial Workpapers, November 18, 2013. The 
Postal Service contemporaneously filed a motion for late acceptance. 
See Motion for Late Acceptance of Non-Public Filing of Agreement and 
Financial Workpapers, November 18, 2013. This motion is granted.
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    The Agreement is the successor agreement to one previously found to 
be functionally equivalent to the Inbound Market-Dominant Multi-Service 
Agreements with Foreign Postal Operators I (MC2010-35).\4\ Notice at 1. 
The Postal Service identifies Canada Post, the postal operator for 
Canada, and the Postal Service as the parties to the Agreement. Id. at 
3.
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    \4\ See Docket No. R2012-5, Order No. 1078, Order Concerning 
Rate Adjustment for Bilateral Agreement with Canada Post Negotiated 
Service Agreement, December 27, 2011. See also Docket No. R2012-5, 
Order 1611, Order Concerning Amendment to Bilateral Agreement with 
Canada Post Negotiated Service Agreement, January 7, 2013.
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    The Postal Service states that the Agreement includes negotiated 
pricing and settlement for various inbound letter-post products, 
including International Business Reply Service (IBRS), registered mail, 
and small packets with delivery confirmation. Id. It asserts that the 
Agreement will not only improve financial performance over default 
Universal Postal Union (UPU) rates, but will also continue to improve 
operational performance. Id. at 3-4. The Postal Service indicates that, 
with the inclusion of IBRS, Canada Post customers sending items to 
recipients in the United States will enable those recipients to return 
the items prepaid. Id. at 4.
    The Postal Service identifies January 1, 2014 as the intended 
effective date; states that its Notice provides the requisite advance 
notice; identifies a Postal Service official as a contact person; 
provides financial data and information in the redacted workpapers; 
describes expected operational improvements; and addresses why the 
Agreement will not result in unreasonable harm to the marketplace.

[[Page 70601]]

Id. at 2-6. The intended expiration date is December 31, 2015, unless 
terminated sooner with at least 90 days' written notice by either 
party. Attachment 2 at 7-8.
    Data collection and performance reporting proposals. The Postal 
Service proposes that no special data collection plan be created for 
the Agreement because it intends to report information on the Agreement 
through the Annual Compliance Report. Id. at 7. With respect to 
performance measurement, the Postal Service asks that it be excepted 
from separate reporting under 39 CFR 3055.3(a)(3) based on Order No. 
966.\5\ Notice at 7.
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    \5\ In Order No. 996, the Commission granted the Postal 
Service's request for a standing exemption to performance reporting 
requirements for all contracts that fall within the parameters of 
the Inbound Market Dominant Multi-Service Agreements with Foreign 
Postal Operations 1 product. See Docket No. R2012-2, Order No. 996, 
Order Concerning an Additional Inbound Market Dominant Multi-Service 
Agreement with Foreign Postal Operators 1 Negotiated Service 
Agreement, November 23, 2011, at 7.
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    Statutory criteria. The Postal Service states that under 39 U.S.C. 
3622(c)(10), the criteria for Commission review are whether the 
Agreement (1) Improves the Postal Service's net financial position or 
enhances performance of operational functions; (2) will not cause 
unreasonable harm to the marketplace; and (3) will be available on 
public and reasonable terms to similarly situated mailers. Id. It 
states that it addresses the first two criteria in its Notice and views 
the third criterion as inapplicable, given Canada Post's status as the 
designated operator for Letter Post originating in Canada. Id.
    Functional equivalence. The Postal Service notes that in Order No. 
1864, the Commission requested that it put forth a proposal for 
identification of the appropriate baseline for comparison of agreements 
for functional equivalency purposes.\6\ Notice at 8. The Postal Service 
states that the Agreement is the substantive equivalent to the 
predecessor agreement with Canada Post, which was included within 
Inbound Market Dominant Multi-Service Agreement with Foreign Postal 
Operators 1 product grouping. Id. It also states that the terms of the 
Agreement fit within the proposed Mail Classification Schedule (MCS) 
language for Inbound Market-Dominant Multi-Service Agreements with 
Foreign Postal Operators 1 and will conform to a common description. 
Id. at 8-9. The Postal Service asserts that in comparison with its 
predecessor, cost characteristics and the financial models used to 
project costs and revenues are the same as the predecessor agreement. 
Id. at 9. It states that while minor differences exist, they mostly 
reflect a reorganization of terms, but make no actual changes to the 
terms. Id. The Postal Service states that none of these differences 
detracts from the conclusion that the Agreement is functionally 
equivalent to its predecessor agreement. Id.
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    \6\ Docket No. R2013-9, Order No. 1864, Order Approving an 
Additional Inbound Market Dominant Multi-Service Agreement with 
Foreign Postal Operators 1 Negotiated Service Agreement (with Korea 
Post), October 30, 2013. In response, the Postal Service filed a 
motion for partial reconsideration. See Docket No. R2013-9, Motion 
of Partial Reconsideration of Order No. 1864, November 6, 2013.
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III. Commission Action

    The Commission, in conformance with rule 3010.44, establishes 
Docket No. R2014-3 to consider matters raised by the Notice. The 
Commission invites interested persons to submit comments on whether the 
Notice is consistent with the policies of 39 U.S.C. 3622 and 39 CFR 
3010.40. Comments are due no later than December 2, 2013.\7\
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    \7\ Due to the Notice's filing date and considering the 
Agreement's effective date, the Commission finds it appropriate to 
extend the comment period prescribed in 39 CFR 3010.44(a)(5) to 
December 2, 2013.
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    The public portions of the Postal Service's filings have been 
posted on the Commission's Web site. They can be accessed at http://www.prc.gov. Information on how to obtain access to non-public material 
is available at 39 CFR part 3007.
    The Commission appoints Katalin K. Clendenin to serve as Public 
Representative in this proceeding.

IV. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket No. R2014-3 to consider 
matters raised by the Notice of United States Postal Service of Type 2 
Rate Adjustment, and Notice of Filing Functionally Equivalent 
Agreement, filed November 15, 2013.
    2. 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.
    3. Comments by interested persons are due no later than December 2, 
2013.
    4. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Ruth Ann Abrams,
Acting Secretary.
[FR Doc. 2013-28259 Filed 11-25-13; 8:45 am]
BILLING CODE 7710-FW-P