[Federal Register Volume 81, Number 3 (Wednesday, January 6, 2016)]
[Notices]
[Pages 523-525]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-33192]


=======================================================================
-----------------------------------------------------------------------

POSTAL REGULATORY COMMISSION

[Docket Nos. ACR2015; Order No. 2968]


FY 2015 Annual Compliance Report

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

-----------------------------------------------------------------------

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 2015. 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, 2016. Reply Comments are due: 
February 12, 2016.

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 FY 2015 ACR
III. Procedural Steps
IV. Ordering Paragraphs

I. Introduction

    On December 29, 2015, 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) 2015.\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 2015 Comprehensive Statement, its FY 2015 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 2015 ACR 
appears in non-public annexes.
---------------------------------------------------------------------------

    \1\ United States Postal Service FY 2015 Annual Compliance 
Report, December 29, 2015 (FY 2015 ACR). Public portions of the 
Postal Service's filing are available on the Commission's Web site 
at http://www.prc.gov.
---------------------------------------------------------------------------

    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 2015 were in 
compliance with applicable title 39 requirements.

II. Overview of the Postal Service's FY 2015 ACR

    Contents of the filing. The Postal Service's FY 2015 ACR consists 
of a 73-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

[[Page 524]]

material has been filed electronically with the Commission, and some 
also has been filed in hard-copy form.
---------------------------------------------------------------------------

    \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 issue a separate notice soliciting 
comments on the comprehensive statement and provide its related 
analysis in a separate report from the ACD.
---------------------------------------------------------------------------

    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 International Cost and 
Revenue Analysis (ICRA); (3) worksharing-related cost studies; and (4) 
billing determinant information for both domestic and international 
mail. FY 2015 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 2015 ACR can be found in 
Library Reference USPS-FY15-9. 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 Library Reference USPS-FY15-9 and in 
prefaces accompanying the appended folders. Id. at 4. Changes in 
analytical principles proposed by the Postal Service for use in the FY 
2015 ACR are identified and summarized in a table. Id. at 4-6.
    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 2015 CRA 
or ICRA. Id. at 7.
    The FY 2015 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 2015 
incentive programs. Id. at 7-55.\3\
---------------------------------------------------------------------------

    \3\ The Postal Service states that it ``would be inefficient and 
unduly disruptive . . . to immediately adjust prices to correct 
passthroughs that exceed 100 percent.'' Id. It further states its 
intent to address such passthroughs in its next general price 
adjustment. Id.
---------------------------------------------------------------------------

    In response to the Commission's FY 2010 ACD directives, the Postal 
Service states that it is providing information regarding: (a) All 
operational changes designed to reduce flats costs and the estimated 
financial effects of such changes, id. at 18-28; (b) all costing 
methodology improvements made in FY 2014 and the estimated financial 
effects of such changes, id. at 28-31; and (c) a statement summarizing 
the historical and current year subsidy of the flats product, id. In 
addition, in response to Order No. 1427,\4\ the Postal Service states 
that in the next general market-dominant price change, it plans to 
increase the price of Standard Mail Flats by at least CPI times 1.05. 
FY 2015 ACR at 30. Also, in response to the FY 2014 ACD, the Postal 
Service states that it provides an analysis of progress being made in 
the improvement of Periodicals cost coverage. Id. at 44-46.
---------------------------------------------------------------------------

    \4\ Docket No. ACR2010-R, Order on Remand, August 9, 2012 (Order 
No. 1427).
---------------------------------------------------------------------------

    Market dominant negotiated service agreements. The FY 2015 ACR 
presents information on market dominant negotiated service agreements 
(NSAs). Id. at 53-55.
    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-FY15-29. Id. at 56-57.
    Customer satisfaction. The FY 2015 ACR discusses the Postal 
Service's approach for measuring customer experience and satisfaction; 
describes the methodology; presents a table with survey results; 
compares the results from FY 2014 to FY 2015; and provides information 
regarding customer access to postal services. Id. at 56-60. The Postal 
Service also states that it responds to the Commission's directive in 
the July 7, 2015, ``Analysis of the Postal Service's FY 2014 Program 
Performance Report and FY 2015 Performance Plan'' that the Postal 
Service provide comparable results for each performance indicator over 
Fiscal Years 2012, 2013, 2014, and 2015, by using the same measurement 
methodology or by explaining how the results under different 
methodologies can be compared. Id. at 60-62.
    Competitive products. The FY 2015 ACR provides costs, revenues, and 
volumes for competitive products of general applicability in the FY 
2015 CRA or ICRA. For competitive products not of general 
applicability, data is provided in non-public Library References USPS-
FY15-NP2 and USPS-FY15-NP27. Id. at 63. The FY 2015 ACR also addresses 
the competitive product pricing standards of 39 U.S.C. 3633. Id. at 63-
69.
    Market tests; nonpostal services. The Postal Service discusses the 
three competitive market tests conducted during FY 2015, and nonpostal 
services. Id. at 70.

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 
2015 ACR and on whether any rates or fees in effect during FY 2015 (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 2015 ACR on its Web site at http://www.prc.gov.
    Comment deadlines. Comments by interested persons are due on or 
before February 2, 2016. Reply comments are due on or before February 
12, 2016. The Commission, upon completion of its review of the FY 2015 
ACR, public comments, and other data and information submitted in this 
proceeding, will issue its ACD.
    Public Representative. James Waclawski 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 him 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. ACR2015 to consider 
matters raised by the United States Postal Service's FY 2015 Annual 
Compliance Report.
    2. Pursuant to 39 U.S.C. 505, the Commission appoints James 
Waclawski

[[Page 525]]

as an officer of the Commission (Public Representative) in this 
proceeding to represent the interests of the general public.
    3. Comments on the United States Postal Service's FY 2015 Annual 
Compliance Report to the Commission are due on or before February 2, 
2016.
    4. Reply comments are due on or before February 12, 2016.
    5. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Stacy L. Ruble,
Secretary.
[FR Doc. 2015-33192 Filed 1-5-16; 8:45 am]
 BILLING CODE 7710-FW-P