[Federal Register Volume 79, Number 1 (Thursday, January 2, 2014)]
[Notices]
[Pages 153-154]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-31360]



[[Page 153]]

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POSTAL REGULATORY COMMISSION

[Docket No. R2014-4; Order No. 1928]


New Postal Product

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is noticing a recent Postal Service filing 
concerning a contract with Hongkong Post for the delivery of various 
inbound small packets with delivery scanning. This notice informs the 
public of the filing, invites public comment, and takes other 
administrative steps.

DATES: Comments are due: January 10, 2014.

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

    On December 24, 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 Hongkong 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\ United States Postal Service Notice of Type 2 Rate 
Adjustment, and Notice of Filing Functionally Equivalent Agreement, 
December 24, 2013 (collectively, Notice).
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II. Contents of Filing

    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 Hongkong 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 supporting financial documentation under seal. Id. at 2.
    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 Hongkong Post, the postal operator for 
Hong Kong, and the Postal Service as the parties to the Agreement. Id. 
at 3.
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    \2\ See Docket No. R2013-3, Order No. 1597, Order Approving an 
Additional Inbound Market Dominant Multi-Service Agreement with 
Foreign Postal Operators 1 Negotiated Service Agreement (with 
Hongkong Post), December 28, 2012.
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    The Postal Service states that the Agreement includes negotiated 
pricing for various inbound small packets with delivery scanning. 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.
    The Postal Service identifies March 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 unredacted workpapers 
filed under seal; describes expected operational improvements; and 
addresses why the Agreement will not result in unreasonable harm to the 
marketplace. Id. at 2-5. The intended expiration date is March 1, 2015, 
unless terminated sooner with at least 30 days' written notice by 
either party. Notice, Attachment 2 at 6; see also id. at 2.
    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. Notice at 5. 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. 
996.\3\ Notice at 5-6.
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    \3\ 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 the 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 6. It 
states that it addresses the first two criteria in its Notice and views 
the third criterion as inapplicable, given Hongkong Post's status as 
the designated operator for letter post packets originating in Hong 
Kong. Id. at 4, 6.
    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.\4\ Notice at 6-7. The Postal 
Service states that the Agreement is functionally equivalent to the 
previously filed and included predecessor agreement with Hongkong Post, 
which was included within Inbound Market Dominant Multi-Service 
Agreement with Foreign Postal Operators 1 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 that the 
Agreement and its predecessor conform to a common description and share 
a common market. Id. at 7. The Postal Service asserts that in 
comparison with its predecessor, cost characteristics and the financial 
models used to project costs and revenues are similar. Id. at 7-8. It 
states that while minor differences exist between the Agreement and its 
predecessor, none of the differences affect the cost or market 
characteristics nor do they detract from the conclusion that the 
Agreement is functionally equivalent to its predecessor agreement. Id. 
at 8-9.
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    \4\ 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, at 7-8. In response, the Postal Service 
filed a motion for partial reconsideration. See Docket No. R2013-9, 
Motion for Partial Reconsideration of Order No. 1864, November 6, 
2013.
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III. Commission Action

    The Commission, in conformance with 39 CFR 3010.44, establishes 
Docket No. R2014-4 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 
part 3010.40. Comments are due no later than January 10, 2014.
    The public portions of the Postal Service's filings have been 
posted on the

[[Page 154]]

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 Kenneth R. Moeller to serve as Public 
Representative in this proceeding.

IV. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket No. R2014-4 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 December 24, 2013.
    2. Pursuant to 39 U.S.C. 505, Kenneth R. Moeller 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 January 10, 
2014.
    4. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. 2013-31360 Filed 12-31-13; 8:45 am]
BILLING CODE 7710-FW-P