[Federal Register Volume 78, Number 228 (Tuesday, November 26, 2013)]
[Notices]
[Pages 70601-70602]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-28260]


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POSTAL REGULATORY COMMISSION

[Docket No. R2014-2; Order No. 1881]


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 Australian 
Postal 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 Australian Postal Corporation 
(Australia 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 
Australia Post Agreement (Attachment 2); and a redacted Excel file with 
supporting financial documentation. Notice at 1-2. The Postal Service 
also filed unredacted copies of the Agreement and the

[[Page 70602]]

supporting financial documentation under seal. Id.
    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).\2\ Notice at 1. 
The Postal Service identifies Australia Post, the postal operator for 
Australia, and the Postal Service as the parties to the Agreement. Id. 
at 3.
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    \2\ See Docket No. R2012-2, Order Concerning an Additional 
Inbound Market Dominant Multi-Service Agreement with Foreign Postal 
Operators 1 Negotiated Service Agreement, November 23, 2011 (Order 
No. 996).
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    The Postal Service states that the Agreement includes negotiated 
pricing for various inbound letter-post products, including small 
packets with delivery confirmation and registered mail. Id. It asserts 
that the Agreement will not only improve financial performance over 
default Universal Postal Union (UPU) rates, but will also improve 
operational performance and other factors. Id. The Postal Service 
indicates that it has incorporated the framework for a new product into 
the Agreement; however the parties are not yet prepared to introduce 
the new product.\3\ Id.
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    \3\ The Postal Service states that it will prepare and file any 
necessary classification and rate filings with the Commission when 
the new product is ready to be introduced. Id. at n.2.
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    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. Id. 
at 2-6. The intended duration is two years from the effective date, 
subject to earlier termination or extension by amendment. Id. 
Attachment 2 at 7.
    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 6. 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 a previous 
Commission order.\4\ Notice at 6.
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    \4\ See Order No. 996 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. at 7. It 
states that it addresses the first two criteria in its Notice and views 
the third criterion as inapplicable, given Australia Post's status as 
the designated operator for Letter Post originating in Australia. 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.\5\ Notice at 7-8. The Postal 
Service states that the Agreement is functionally equivalent to 
previously included agreements because ``it is in all material respects 
the same as the predecessor agreement between these two parties . . . 
,'' which was found by the Commission to be appropriately classified in 
this product grouping. Id. at 8. 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. 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 and, except for minor changes, the Agreement and 
its predecessor are nearly identical. Id.
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    \5\ 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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    The Postal Service identifies two differences between the Agreement 
and its predecessor. Annex 7 of the Agreement incorporates an amendment 
made to the predecessor agreement. Id. at 8-9. Annex 8 concerning the 
potential new product is included in the Agreement, but is not yet 
operative. Id. at 9. It was included to facilitate implementation when 
the parties are prepared to introduce the service, without need for 
formal amendment of the Agreement. Id. Other minor differences are also 
included. Id. at 9-10. The Postal Service states that none of these 
differences detracts from the conclusion that the Agreement is 
functionally equivalent to its predecessor agreement. Id. at 10.

III. Commission Action

    The Commission, in conformance with rule 3010.44, establishes 
Docket No. R2014-2 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.\6\
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    \6\ 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 Natalie R. Ward to serve as Public 
Representative in this proceeding.

IV. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket No. R2014-2 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, Natalie R. Ward 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. 2013-28260 Filed 11-25-13; 8:45 am]
BILLING CODE 7710-FW-P