[Federal Register Volume 80, Number 4 (Wednesday, January 7, 2015)]
[Notices]
[Pages 906-908]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-30976]


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POSTAL REGULATORY COMMISSION

[Docket No. ACR2014; Order No. 2313]


FY 2014 Annual Compliance Report

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Postal Service has filed an Annual Compliance Report on 
the costs, revenues, rates, and quality of service associated with its 
products in fiscal year 2014. Within 90 days, the Commission must 
evaluate that information and issue its determination as to whether 
rates were in compliance with title 39, chapter 36, and whether service 
standards in effect were met. To assist in this, the Commission seeks 
public comments on the Postal Service's Annual Compliance Report.

DATES: Comments are due: February 2, 2015. Reply Comments are due: 
February 13, 2015.

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: David A. Trissell, General Counsel, at 
202-789-6820.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Introduction
II. Overview of the Postal Service's FY2014 ACR
III. Procedural Steps
IV. Ordering Paragraphs

I. Introduction

    On December 29, 2014, the United States Postal Service (Postal 
Service) filed with the Commission, pursuant to 39 U.S.C. 3652, its 
Annual Compliance Report (ACR) for fiscal year (FY) 2014.\1\ Section 
3652 requires submission of data and information on the costs, 
revenues, rates, and quality of service associated with postal products 
within 90 days of the closing of each fiscal year. In conformance with 
other statutory provisions and Commission rules, the ACR includes the 
Postal Service's FY 2014 Comprehensive Statement, its FY 2014 annual 
report to the Secretary of the Treasury on the Competitive Products 
Fund, and certain related Competitive Products Fund material. See 
respectively, 39 U.S.C. 3652(g), 39 U.S.C. 2011(i), and 39 CFR 3060.20-
23. In line with past practice, some of the material in the FY 2014 ACR 
appears in non-public annexes.
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    \1\ United States Postal Service FY 2014 Annual Compliance 
Report, December 29, 2014 (FY 2014 ACR). Public portions of the 
Postal Service's filing are available on the Commission's Web site 
at http://www.prc.gov.
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    The filing begins a review process that results in an Annual 
Compliance Determination (ACD) issued by the Commission to determine 
whether Postal Service products offered during FY 2014 are in 
compliance with applicable title 39 requirements.

II. Overview of the Postal Service's FY 2014 ACR

    Contents of the filing. The Postal Service's FY 2014 ACR consists 
of a 51-page narrative; extensive additional material appended as 
separate folders and identified in Attachment One; and an application 
for non-public treatment of certain materials, along with supporting 
rationale, filed as Attachment Two. The filing also includes the 
Comprehensive Statement,\2\ Report to the Secretary of the Treasury, 
and information on the Competitive Products Fund filed in response to 
Commission rules. This material has been filed electronically with the 
Commission, and some also has been filed in hard-copy form.
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    \2\ In years prior to 2013, the Commission reviewed the Postal 
Service's reports prepared pursuant to 39 U.S.C. 2803 and 39 U.S.C. 
2804 (filed as the Comprehensive Statement by the Postal Service) in 
its Annual Compliance Determination. However, as it did last year, 
the Commission intends to review these reports separately.
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    Scope of filing. The material appended to the narrative consists 
of: (1) Domestic product costing material filed on an annual basis 
summarized in the Cost and Revenue Analysis (CRA); (2) comparable 
international costing material summarized in the

[[Page 907]]

International Cost and Revenue Analysis (ICRA); (3) worksharing-related 
cost studies; and (4) billing determinant information for both domestic 
and international mail. FY 2014 ACR at 2. Inclusion of these four data 
sets is consistent with the Postal Service's past ACR practices. As 
with past ACRs, the Postal Service has split certain materials into 
public and non-public versions. Id. at 2-3.
    ``Roadmap'' document. A roadmap to the FY 2014 ACR appears as 
Library Reference USPS-FY14-9. This document provides brief 
descriptions of the materials submitted, as well as the flow of inputs 
and outputs among them; a discussion of differences in methodology 
relative to Commission methodologies in last year's ACD; and a list of 
special studies and a discussion of obsolescence, as required by 
Commission rule 3050.12. Id. at 3.
    Methodology. The Postal Service states that it has adhered to the 
methodologies historically used by the Commission subject to changes 
identified and discussed in a separate section of the roadmap document 
and in prefaces accompanying the appended folders. Id. at 4. Changes in 
analytical principles proposed by the Postal Service for use in the FY 
2014 ACR are identified and summarized in a table. Id. at 4-5. The 
table omits more recent proposed changes that the Postal Service does 
not hope to implement until preparing reports for Fiscal Year 2015. Id. 
at 4.
    Market dominant product-by-product costs, revenues, and volumes. 
Comprehensive cost, revenue, and volume data for all market dominant 
products of general applicability are shown directly in the FY 2014 CRA 
or ICRA. Id. at 6.
    The FY 2014 ACR includes a discussion by class of each market 
dominant product, including costs, revenues, and volumes, workshare 
discounts and passthroughs responsive to 39 U.S.C. 3652(b), and FY 2014 
incentive programs. Id. at 6-38.\3\ In addition, in response to Order 
No. 1427,\4\ the Postal Service also provides a schedule of future 
price increases for Standard Mail Flats. FY 2014 ACR at 20.
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    \3\ The Postal Service notes that a structural lag resulted from 
the implementation of prices from Docket Nos. R2013-10 and R2013-11 
on January 26, 2014. Because of that lag, it is unable to rely on 
any of the worksharing exceptions for certain workshare passthroughs 
exceeding 100 percent. It states that it will correct those 
passthroughs as quickly as possible in future price adjustments. Id. 
at 6.
    \4\ Docket No. ACR2010-R, Order on Remand, August 9, 2012 (Order 
No. 1427).
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    Market dominant negotiated service agreements. The FY 2014 ACR 
presents information on market dominant negotiated service agreements 
(NSAs). Id. at 37-38.
    Forthcoming Information. The Postal Service represents that due to 
the unavailability of staff during the holiday season, it was unable to 
include certain information in this filing. It states that the 
following information will be filed with the Commission in ``early 
January'':
     A description of all operational changes designed to 
reduce costs for Standard Mail Flats in FY 2014 as required by the 
Commission in the FY 2010 ACD. Id. at 19 n.7.
     A description of costing methodology or measurement 
improvements made to the Standard Mail Flats product in FY 2014 and an 
estimate of the financial effects of such changes as required by the 
Commission in the FY 2010 ACD. Id.
     A statement summarizing the historical and current fiscal 
year subsidy of the Standard Mail Flats product and an estimated 
timeline for phasing out that subsidy as required by the Commission in 
the FY 2010 ACD. Id.
     A detailed analysis of progress made in improving 
Periodicals cost coverage as required by the Commission in the FY 2013 
ACD. Id. at 32 n.14. The Postal Service is directed to provide this 
information no later than January 5, 2015.
    Service performance. The Postal Service notes that the Commission 
issued rules on periodic reporting of service performance measurement 
and customer satisfaction in FY 2010. Responsive information appears in 
Library Reference USPS-FY14-29. Id. at 39.
    Customer satisfaction. The FY 2014 ACR discusses the Postal 
Service's approach for measuring customer experience and satisfaction; 
describes the methodology; presents a table with survey results; and 
compares the results from FY 2013 to FY 2014. Id. at 40-43.
    Competitive products. The FY 2014 ACR provides costs, revenues, and 
volumes for competitive products of general applicability in the FY 
2014 CRA or ICRA. For competitive products not of general 
applicability, data is provided in non-public Library References USPS-
FY14-NP2 and USPS-FY14-NP27. The FY 2014 ACR also addresses the 
competitive product pricing standards of 39 U.S.C. 3633. Id. at 44-47.
    Market tests; nonpostal services. The Postal Service discusses the 
market dominant market test conducted during FY 2014, the three 
competitive market tests conducted during FY 2014, and nonpostal 
services. Id. at 48-49.

III. Procedural Steps

    Statutory requirements. Section 3653 of title 39 requires the 
Commission to provide interested persons with an opportunity to comment 
on the ACR and to appoint an officer of the Commission (Public 
Representative) to represent the interests of the general public. The 
Commission hereby solicits public comment on the Postal Service's FY 
2014 ACR and on whether any rates or fees in effect during FY 2014 (for 
products individually or collectively) were not in compliance with 
applicable provisions of chapter 36 of title 39 (or regulations 
promulgated thereunder). Commenters addressing market dominant products 
are referred in particular to the applicable requirements (39 U.S.C. 
3622(d) and (e) and 3626); objectives (39 U.S.C. 3622(b)); and factors 
(39 U.S.C. 3622(c)). Commenters addressing competitive products are 
referred to 39 U.S.C. 3633.
    The Commission also invites public comment on the cost coverage 
matters the Postal Service addresses in its filing; service performance 
results; levels of customer satisfaction achieved; and such other 
matters that may be relevant to the Commission's review.
    Access to filing. The Commission has posted the publicly available 
portions of the FY 2014 ACR on its Web site at http://www.prc.gov.
    Comment deadlines. Comments by interested persons are due on or 
before February 2, 2015. Reply comments are due on or before February 
13, 2015. The Commission, upon completion of its review of the FY 2014 
ACR, public comments, and other data and information submitted in this 
proceeding, will issue its ACD. Those needing assistance filing 
electronically may contact the Docket Section supervisor at 202-789-
6846 or via email at [email protected]. Inquiries about access to 
non-public materials should also be directed to the Docket Section.
    Public Representative. Tracy Ferguson is designated to serve as the 
Public Representative to represent the interests of the general public 
in this proceeding. Neither the Public Representative nor any 
additional persons assigned to assist her shall participate in or 
advise as to any Commission decision in this proceeding other than in 
their designated capacity.

IV. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket No. ACR2014 to consider 
matters raised

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by the United States Postal Service's FY 2014 Annual Compliance Report.
    2. The Postal Service is directed to provide the Commission with 
the material listed in the Forthcoming Information section of this 
order no later than January 5, 2015.
    3. Pursuant to 39 U.S.C. 505, the Commission appoints Tracy 
Ferguson as an officer of the Commission (Public Representative) in 
this proceeding to represent the interests of the general public.
    4. Comments on the United States Postal Service's FY 2014 Annual 
Compliance Report to the Commission, including the Comprehensive 
Statement of Postal Operations and other reports, are due on or before 
February 2, 2015.
    5. Reply comments are due on or before February 13, 2015.
    6. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. 2014-30976 Filed 1-6-15; 8:45 am]
BILLING CODE 7710-FW-P