[Federal Register Volume 82, Number 3 (Thursday, January 5, 2017)]
[Proposed Rules]
[Pages 1294-1296]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31856]


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POSTAL SERVICE

39 CFR Part 501


Revisions to the Requirements for Authority To Manufacture and 
Distribute Postage Evidencing Systems; Customized Postage Products

AGENCY: Postal Service.

ACTION: Proposed rule.

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SUMMARY: The Postal Service proposes to amend its Postage Evidencing 
Systems regulations to add standardized requirements for the 
authorization to produce Customized Postage products, a Special Service 
approved by the Postal Regulatory Commission. Customized Postage 
products are provided through authorized Postage Evidencing System 
manufacturer-distributors or through companies affiliated with 
authorized Postage Evidencing System manufacturer-distributors and 
approved by the Postal Service. During the development of this service, 
the requirements for authorization to produce Customized Postage 
products have been described in Federal Register notices and in 
individual approval letters issued to providers. These amendments would 
give regulatory form to the existing requirements for authorization to 
produce Customized Postage products, and incorporate procedures for the 
protection of Postal Service business interests.

DATES: Comments must be received on or before February 6, 2017.

ADDRESSES: Mail or deliver written comments to the Manager, Payment 
Technology, U.S. Postal Service[supreg], 475 L'Enfant Plaza SW., Room 
3500, Washington, DC 20260. You may inspect and photocopy all written 
comments at the Payment Technology office by appointment only between 
the hours of 9 a.m. and 4 p.m., Monday through Friday by calling 1-202-
268-7613 in advance. Email and faxed comments are not accepted.

FOR FURTHER INFORMATION CONTACT: Christy Noel, Legal Policy & 
Legislative Advice, U.S. Postal Service, (202) 268-3484.

SUPPLEMENTARY INFORMATION: The Postal Reorganization Act authorizes the 
Postal Service to provide such evidence of postage payment ``as may be 
necessary or desirable.'' 39 U.S.C. 404(a)(4). The Postal Service 
exercises this authority through 39 CFR part 501, which protects postal 
revenues by regulation of manufacturer-distributors of Postage 
Evidencing Systems. Customized Postage products were developed through 
market tests allowing Authorized Postage Evidencing System providers to 
combine evidence of prepayment of postage with a customer-selected or 
customer-provided graphic image for printing and fulfillment. See, 70 
FR 21821 (April 27, 2005); 71 FR 12718 (March 13, 2006). Subsequently, 
Customized Postage products were approved as a Special Service by the 
Postal Regulatory Commission. See, 75 FR 11452, 11459 (March 11, 2010). 
These proposed amendments to 39 CFR 501 would create standardized 
definitions, requirements, and procedures applicable to the 
authorization to provide Customized Postage products, and incorporate 
protections for the Postal Service's legal, financial, or brand 
interests. Existing providers of Customized Postage products would be 
able to continue provision of Customized Postage products for the 
remainder of the product year in accordance with these revisions upon 
their effective date, and subject to any requirements set forth in 
individual authorization letters. Alternatively, existing providers 
would be able to discontinue provision of Customized Postage products 
and request a refund from the Postal Service of their annual fee, pro-
rated for the remainder of the product year.

List of Subjects in 39 CFR Part 501

    Administrative practice and procedure.

    Accordingly, for the reasons discussed above, the Postal Service 
proposes to amend 39 CFR part 501 as follows:

PART 501--AUTHORIZATION TO MANUFACTURE AND DISTRIBUTE POSTAGE 
EVIDENCING SYSTEMS

0
1. The authority citation for 39 CFR part 501 continues to read as 
follows:

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 410, 
2601, 2605, Inspector General Act of 1978, as amended (Pub. L. 95-
452, as amended); 5 U.S.C. App. 3.


[[Page 1295]]


0
2. In Sec.  501.1, revise paragraph (d) and add paragraph (h) to read 
as follows:


Sec.  501.1   Definitions.

* * * * *

501.1 Definitions.

* * * * *
    (d) A provider is: (1) A person or entity authorized under this 
section to manufacture or distribute Postage Evidencing Systems to 
customers; or
    (2) A company that is:
    (i) Affiliated under conditions respecting postage revenue security 
with a person or entity authorized under this section to manufacture or 
distribute Postage Evidencing Systems to customers; and
    (ii) Authorized by the Postal Service to produce Customized Postage 
products in accordance with this section and subject to all procedures 
and regulations set forth throughout this section and to any additional 
requirements set forth in individual approval letters.
* * * * *
    (h) Customized Postage products are products combining barcode 
indicia of postage payment with digital, graphic, or pictorial images 
or text. Customers select or provide images or text that meet 
Eligibility Criteria established by the Postal Service, and the image 
or text is combined with the barcode indicia by providers and printed 
under controlled conditions for mailing to customers.
0
3. In Sec.  501.6, remove the term ``PT'' wherever it appears and add 
in its place the term ``the Postal Service''; and revise paragraph (a), 
the final sentence of paragraph (b), paragraph (c)(1), and paragraph 
(f) to read as follows:


Sec.  501.6  Suspension and Revocation of Authorization.

    (a) The Postal Service may suspend or revoke authorization to 
manufacture or distribute any or all of a provider's approved Postage 
Evidencing Systems, or to produce Customized Postage products, if the 
provider engages in any unlawful scheme or enterprise; fails to comply 
with any provision in this Part 501, or any provision in an individual 
approval letter; fails to implement instructions issued in accordance 
with any final decision issued by the Postal Service within its 
authority over Postage Evidencing Systems or Customized Postage 
products; or if the Postage Evidencing Systems, Customized Postage 
products, or infrastructure of the provider is determined to constitute 
an unacceptable risk to Postal Service business interests, including 
legal, financial, or brand interests.
    (b) * * * Before determining that a provider's authorization to 
manufacture or distribute Postage Evidencing Systems or to produce 
Customized Postage products should be suspended or revoked, the 
procedures in paragraph (c) of this section shall be followed.
    (c)(1) Suspension or revocation procedures: Upon determination by 
the Postal Service that a provider is in violation of a provision of 
this part, or that its Postage Evidencing System or Customized Postage 
products pose an unacceptable risk to Postal Service business 
interests, including legal, financial, or brand interests, the Postal 
Service shall issue a written notice of proposed suspension citing the 
specific conditions or deficiencies for which suspension may be 
imposed. Except in cases of willful violation, the provider shall be 
given an opportunity to correct deficiencies and achieve compliance 
within a time limit corresponding to the potential risk to Postal 
Service business interests.
* * * * *
    (f) An order or final decision under this section does not preclude 
any other remedy that is available by law to the Postal Service, the 
United States, or any other person or entity.
0
4. In Sec.  501.7(c), in the first sentence, remove the words ``postal 
evidencing system'' and add in their place the words ``postage meter''.
0
5. Revise Sec.  501.13 to read as follows:


Sec.  501.13  False Representations of Postal Service Actions.

    Providers, their agents, and employees must not misrepresent to 
customers of the Postal Service any decisions, actions, or proposed 
actions of the Postal Service respecting its regulation of Postage 
Evidencing Systems or Customized Postage products. The Postal Service 
reserves the right pursuant to Sec.  501.6 to suspend or revoke the 
authorization to manufacture or distribute Postage Evidencing Systems 
or to produce Customized Postage when it determines that the provider, 
its agents, or employees failed to comply with this section.
0
6. Add Sec.  501.21 to read as follows:


Sec.  501.21  Customized Postage Products.

    (a) Eligibility Criteria. The Postal Service reserves the right to 
determine independently whether any image, text, or category of images 
or texts meets any of the Eligibility Criteria contained in this 
section. To be eligible for use in Customized Postage products, images 
and/or text must meet criteria established by the Postal Service, which 
are:
    (1) Images or text must not contain:
    (i) Any image or text the customer or provider does not have the 
right to use either directly or under license, including but not 
limited to images or text that may be the subject of third party rights 
such as copyright, trademarks, or rights of publicity or privacy;
    (ii) Any depiction of alcohol; tobacco; controlled substances, 
including but not limited to marijuana; gambling; or firearms or other 
weapons;
    (iii) Any depiction of political, religious, violent or sexual 
content, including content not suitable for minors; or
    (iv) Any depiction of any other subject matter prohibited for 
display under U.S. law.
    (2) Images or text must be ``commercial'' or ``social,'' as defined 
below:
    (i) Commercial means intended for no other purpose than the sale of 
goods or services in commerce.
    (ii) Social means promoting or depicting people, animals, items, or 
events commonly associated with friendly relations or companionship and 
likely to generate invitations, announcements, notices, thank you 
notes, RSVPs, or similar correspondence.
    (b) Customized Postage provider authorization is conditioned on the 
following requirements:
    (1) Use of Eligibility Criteria in purchases. Providers must use 
only the Eligibility Criteria set forth in paragraph (a) of this 
subsection in providing or accepting images and/or text for Customized 
Postage products. Providers may not use any other eligibility criteria, 
represent the use of any other eligibility criteria to customers, or 
otherwise give the appearance that any eligibility criteria other than 
the Eligibility Criteria set forth in paragraph (a) of this subsection 
apply to purchases of Customized Postage products.
    (2) Use of Eligibility Criteria in promotional material. Providers 
must ensure that any images and/or text used in providing or promoting 
Customized Postage products, for individual sale or as part of a 
category of images and/or text provided or made available for customer 
selection, displayed on provider Web sites or in any medium, including 
without limitation exemplars, ordering templates, customization 
options, or customer correspondence:
    (i) Are fully compatible with the Eligibility Criteria set forth in 
paragraph (a) of this subsection; and
    (ii) Do not give the appearance that images that are not fully 
compatible with the Eligibility Criteria set forth in

[[Page 1296]]

paragraph (a) of this subsection are available or offered for purchase 
through providers or otherwise.
    (3) Disassociation from U.S. stamps. Providers must not refer to 
Customized Postage products as ``stamps'' or make any other 
representations tending to imply that Customized Postage products are 
related in any way to official U.S. postage stamps or to any aspect of 
the Postal Service philatelic program.
    (4) Authorization fee and Eligibility Criteria audit. Providers 
must pay an annual authorization fee and participate in any audit 
conducted by the Postal Service to ensure that the customer-selected or 
-provided images or text displayed on Customized Postage products or in 
the promotion in any medium of Customized Postage products are in 
compliance with the Eligibility Guidelines set forth in paragraph (a) 
of this subsection.
    (5) Individual authorization letters. Additional conditions and 
requirements for provider authorization may be set forth in individual 
provider authorization letters.
    (6) Correspondence. The Postal Service office responsible for 
administration of this part is the Office of Brand Marketing or its 
successor organization. All correspondence with the Postal Service 
required by this part is to be made to this office in person or via 
mail to 475 L'Enfant Plaza SW., Room 5117, Washington, DC 20260-0004.

Stanley F. Mires,
Attorney, Federal Compliance.
[FR Doc. 2016-31856 Filed 1-4-17; 8:45 am]
 BILLING CODE 7710-12-P