[Federal Register Volume 82, Number 150 (Monday, August 7, 2017)]
[Proposed Rules]
[Pages 36705-36706]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-16543]


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

POSTAL REGULATORY COMMISSION

39 CFR part 3050

[Docket No. RM2017-11; Order No. 4024]


Periodic Reporting

AGENCY: Postal Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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

SUMMARY: The Commission is announcing a recent filing requesting that 
the Commission initiate an informal rulemaking proceeding to consider 
changes to an analytical method for use in periodic reporting (Proposal 
Seven). This document informs the public of the filing, invites public 
comment, and takes other administrative steps.

DATES: Comments are due: September 15, 2017.

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. Proposal Seven
III. Notice and Comment
IV. Ordering Paragraphs

I. Introduction

    On July 28, 2017, the Postal Service filed a petition pursuant to 
39 CFR 3050.11 requesting that the Commission initiate an informal 
rulemaking proceeding to consider changes to an analytical method 
relating to periodic reports.\1\ The Petition identifies the proposed 
analytical method changes filed in this docket as Proposal Seven.
---------------------------------------------------------------------------

    \1\ Petition of the United States Postal Service for the 
Initiation of a Proceeding to Consider Proposed Changes in 
Analytical Principles (Proposal Seven), July 28, 2017 (Petition).
---------------------------------------------------------------------------

II. Proposal Seven

    The Postal Service explains that for many years it has calculated 
the ``USPS Marketing Mail'' dropship passthroughs for flats and parcels 
rate categories only with reference to the per-pound price element 
above the piece-pound breakpoint. For greater accuracy it proposes to 
include the per-piece price element below the breakpoint in the 
calculation. Petition, Proposal Seven at 1.

[[Page 36706]]

    Background. As currently calculated, the traditional passthrough 
for ``USPS Marketing Mail'' flats and parcels divides the discount by 
the avoided cost as shown in Table 1 attached to the Petition.\2\ The 
numerator is the per-pound discount above the breakpoint, for pieces 
above the breakpoint, versus origin-entered. The denominator is the 
average avoided cost per pound for all volume, both above and below the 
breakpoint, versus origin-entered. Petition, Proposal Seven at 1. The 
Postal Service states this has two shortcomings. The numerator does not 
include the other price element that varies by depth of entry, the per-
piece price element below the breakpoint. Id. Second, the numerator and 
denominator are mismatched; the numerator represents volume above the 
breakpoint while the denominator represents volume both above and below 
the breakpoint. Id. at 1-2.
---------------------------------------------------------------------------

    \2\ Petition, Excel file ``Prop.7.Dropship_Passthroughs.xlsx,'' 
column (h).
---------------------------------------------------------------------------

    Proposal. The Postal Service proposes to calculate dropship 
passthroughs of ``USPS Marketing Mail'' flats and parcels rate 
categories to reflect both price elements that vary by depth of entry 
(per-pound above the breakpoint and per-piece below the breakpoint) as 
shown in column (i) of Table 1. Id. at 2. The Postal Service says this 
calculation now divides the entire value of the dropship discount, both 
per piece and per pound, by the total avoided cost. While the 
denominator can be expressed as either the total avoided cost per piece 
times the total number of pieces or the total avoided cost per pound 
times the total number of pounds, Table 1 opts for the former 
alternative, cost per piece times the total number of pieces [(f) x 
[(a) + (b)]]. Id.
    Impacts. The Postal Service states that the proposed methodology 
could provide a more accurate representation of passthroughs to ensure 
discounts do not exceed the Postal Service cost avoided as a result of 
dropshipping. Id. Under the proposal, one passthrough reported in the 
FY 2016 Annual Compliance Report would have increased from 75.7 percent 
to 111.0 percent.\3\ If adopted, the Postal Service would seek to reset 
the passthrough at 100 percent or less in the next market dominant 
price adjustment proceeding or cite a statutory exception. Petition, 
Proposal Seven at 2-3.
---------------------------------------------------------------------------

    \3\ Id.; see Petition, Excel file 
``Prop.7.Dropship_Passthroughs.xlsx,'' columns (h) and (i).
---------------------------------------------------------------------------

III. Notice and Comment

    The Commission establishes Docket No. RM2017-11 for consideration 
of matters raised by the Petition. More information on the Petition may 
be accessed via the Commission's Web site at http://www.prc.gov. 
Interested persons may submit comments on the Petition and Proposal 
Seven no later than September 15, 2017. Pursuant to 39 U.S.C. 505, 
Katalin K. Clendenin is designated as officer of the Commission (Public 
Representative) to represent the interests of the general public in 
this proceeding.

IV. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket No. RM2017-11 for 
consideration of the matters raised by the Petition of the United 
States Postal Service for the Initiation of a Proceeding to Consider 
Proposed Changes in Analytical Principles (Proposal Seven), filed July 
28, 2017.
    2. Comments by interested persons in this proceeding are due no 
later than September 15, 2017.
    3. Pursuant to 39 U.S.C. 505, the Commission appoints Katalin K. 
Clendenin to serve as an officer of the Commission (Public 
Representative) to represent the interests of the general public in 
this docket.
    4. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Stacy L. Ruble,
Secretary.
[FR Doc. 2017-16543 Filed 8-4-17; 8:45 am]
 BILLING CODE 7710-FW-P