[Federal Register Volume 83, Number 190 (Monday, October 1, 2018)]
[Rules and Regulations]
[Pages 49286-49295]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-21249]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3050

[Docket No. RM2018-2; Order No. 4836]


Periodic Reporting Requirements

AGENCY: Postal Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Commission adopts final rules revising periodic reporting 
requirements codified in our regulations. The final rules amend several 
existing sections of our regulations, and add several subsections to 
our regulations.

DATES: Effective: October 31, 2018.

FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at 
202-789-6820.

SUPPLEMENTARY INFORMATION:

Regulatory History

83 FR 33879 (Jul. 18, 2018)
83 FR 1320 (Jan. 11, 2018)

Table of Contents

I. Introduction
II. Background
III. Comments
IV. Commission Analysis
V. Changes to the Proposed Rules
VI. Ordering Paragraphs

I. Introduction

    In this Order, the Commission adopts final rules revising periodic 
reporting requirements codified in 39 CFR part 3050. The final rules 
adopted by this Order amend existing rules by adjusting the deadlines 
of certain quarterly and monthly reports, modifying the format of the 
Monthly Summary Financial Report, and adding or removing certain 
reporting requirements. The final rules amend several existing sections 
of 39 CFR part 3050, and add several subsections to Sec.  3050.21.

II. Background

    On December 27, 2017, the Postal Service requested that the 
Commission initiate a rulemaking proceeding to consider revisions to 
the periodic reporting requirements codified in 39 CFR part 3050.\1\ On 
January 5, 2018, the Commission established this docket and invited 
comments and reply comments regarding the Postal Service's proposed 
revisions.\2\ The Commission received comments from the Public 
Representative \3\ and the United Parcel Service, Inc. (UPS).\4\ The 
Commission received reply comments from the Postal Service \5\ and the 
Parcel Shippers Association (PSA).\6\
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    \1\ United States Postal Service Petition for Rulemaking on 
Periodic Reporting, December 27, 2017 (Petition).
    \2\ Advance Notice of Proposed Rulemaking to Revise Periodic 
Reporting Requirements, January 5, 2018 (Order No. 4374). The 
Advance Notice of Proposed Rulemaking to Revise Periodic Reporting 
Requirements was published in the Federal Register on January 11, 
2018. See 83 FR 1320 (January 11, 2018).
    \3\ Public Representative Comments on Advance Notice of Proposed 
Rulemaking to Revise Periodic Reporting Requirements, March 7, 2018 
(March 7 PR Comments).
    \4\ Comments of United Parcel Service, Inc. on Advance Notice of 
Proposed Rulemaking to Revise Periodic Reporting Requirements, March 
7, 2018 (March 7 UPS Comments).
    \5\ Reply Comments of the United States Postal Service, April 6, 
2018 (Postal Service Reply Comments).
    \6\ Reply Comments of the Parcel Shippers Association (PSA), 
April 6, 2018.
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    The Postal Service's petition contained three requests. First, the 
Postal Service requested that the Commission adjust deadlines for the 
quarterly Revenue, Pieces, and Weight (RPW) report; the Quarterly 
Statistics Report (QSR); the quarterly Billing Determinants report; and 
the monthly National Consolidated Trial Balance and Revenue and Expense 
Summary (Trial Balance) report to align the deadlines with other 
financial reporting deadlines. Petition at 1. The Postal Service stated 
that aligning the deadlines would be more effective, as the current 
rules require the reports to be submitted before key information is 
available. Id. at 3-5.
    Second, the Postal Service requested that the Commission change the 
format of the Monthly Summary Financial Report. Id. at 6. The Postal 
Service sought to revise Sec.  3050.28(b)(1), Table 1 and Table 2. For 
Table 1, the Postal Service requested a change of the term ``Operating 
Revenue'' to ``Revenue,'' and to remove a breakdown of types of 
operating revenue. Id. at 6-8. For Table 2, the Postal Service 
requested to update the product name for USPS Marketing Mail, as the 
previous format used the old product name of Standard Mail. Id. at 8.
    Third, the Postal Service requested that the Commission remove any 
requirements deemed unnecessary to the Commission's evaluation of 
compliance with title 39. Id. at 9-10.
    The Commission considered the comments it received in response to 
Order No. 4706 and reviewed its periodic reporting rules to determine 
if updates were warranted, and as a result proposed revisions to the 
rules.\7\ The revisions incorporated the Postal Service's proposal to 
adjust the filing date for the RPW, QSR, Billing Determinants, and 
Trial Balance reports.\8\
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    \7\ Notice of Proposed Rulemaking to Revise the Periodic 
Reporting Requirements, July 12, 2018 (Order No. 4706). The Notice 
of Proposed Rulemaking to Revise the Periodic Reporting Requirements 
was published in the Federal Register on July 18, 2018. See 83 FR 
33879 (July 18, 2018).
    \8\ See Order No. 4706 at 8-10, part IV.B, proposed sections 
3050.25(c)-(e), 3050.28(c).
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    The proposed rules also changed the format of the Monthly Summary 
Financial Report. In Sec.  3050.28(b)(1), Table 1, the existing input 
for ``Operating Revenue'' remains, but component inputs ``Mail and 
Services Revenue'' and ``Government Appropriations'' were removed. A 
new heading, ``Revenue,'' contains an input for ``Operating Revenue,'' 
a new input for ``Other Revenue,'' and an input for their combined 
``Total Revenue.'' \9\

[[Page 49287]]

Proposed changes to Table 2 included a replacement of the current input 
``Standard Mail'' to ``USPS Marketing Mail,'' and the replacement of 
the ``Total All Mail'' input and its components with distinct inputs 
for ``Total Volume'' and ``Total Operating Revenue.'' \10\
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    \9\ Id. at 10-11, part IV.C. Although Order No. 4706 explained 
this change, the proposed Table 1 inadvertently failed to reflect 
the change, omitting the new ``Total Revenue'' input.
    \10\ Id. at 12, proposed section 3050.28(b)(1), Table 2.
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    In Order No. 4706, the Commission also explained several 
modifications to the existing rules that the Commission deemed 
necessary to increase the efficiency and decrease the administrative 
burden, for both the Postal Service and the Commission, of the Annual 
Compliance Determination (ACD) process. Id. at 13. The proposed rules 
added a requirement that the Postal Service file documentation with its 
Annual Compliance Report (ACR) showing that non-compensatory market 
dominant negotiated service agreements (NSAs) improve the Postal 
Service's net financial position or enhance the performance of mail 
preparation, processing, transportation, or other functions.\11\
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    \11\ Id. at 13-14, proposed Sec.  3050.21(f)(6).
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    Proposed Sec.  3050.21(j) replaced the existing section requiring 
the Postal Service to provide any information it believes will assist 
the Commission in evaluating compliance with title 39. The Commission's 
proposed rules renumbered that requirement as Sec.  3050.21(n), and 
revised Sec.  3050.21(j) to require that the Postal Service provide a 
distribution breakdown of mail fees for market dominant and competitive 
products.\12\
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    \12\ Id. at 14, proposed Sec.  3050.21(j).
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    Proposed Sec.  3050.21(k) added a requirement that the Postal 
Service provide in its annual filing any third-party service 
performance results where a financial penalty or bonus is applied, and 
to provide the amount of any forfeited revenue.\13\
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    \13\ Id. at 15, proposed Sec.  3050.21(k).
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    Proposed Sec.  3050.21(l) added a requirement that the Postal 
Service provide all total workhour data and data sources, showing 
workhour measurements by Labor Distribution Code.\14\
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    \14\ Id. at 15-16, proposed Sec.  3050.21(l).
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    In proposed Sec.  3050.21(m), the Commission added a requirement 
that the Postal Service provide with its ACR Inbound Letter Post \15\ 
revenue, volume, attributable cost, and contribution data aggregated by 
Universal Postal Union (UPU) country group and by shape for the 
preceding five fiscal years.\16\
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    \15\ ``Inbound Letter Post'' as defined in the Mail 
Classification Schedule (MCS) section 1130.
    \16\ Id. at 16-18, proposed Sec.  3050.21(m).
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    The Commission's proposed rules also removed a requirement from 
Sec.  3050.60. Id. at 19. The current Sec.  3050.60(c) requires the 
Postal Service to provide hard and electronic copies of any 
publications or handbooks, data collection forms, and training 
handbooks whenever they are changed. The Commission, finding that 
providing a hard-copy form might create unnecessary administrative 
effort, proposed to remove the requirement of providing those 
publications in hard-copy form.\17\
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    \17\ Id. at 19, proposed Sec.  3050.60(c).
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    In Order No. 4706, the Commission invited comments on the proposal 
from interested parties. Id.

III. Comments

    In response to Order No. 4706, the Commission received comments 
from the Postal Service,\18\ UPS,\19\ the Public Representative,\20\ 
the U.S. Chamber of Commerce,\21\ and the National Association of 
Manufacturers (NAM).\22\
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    \18\ United States Postal Service Comments Regarding Order No. 
4706, August 17, 2018 (Postal Service Comments).
    \19\ Comments of United Parcel Service, Inc. on Notice of 
Proposed Rulemaking to Revise the Periodic Reporting Requirements, 
August 17, 2018 (August 17 UPS Comments).
    \20\ Public Representative Comments on Notice of Proposed 
Rulemaking to Revise Periodic Reporting Requirements, August 17, 
2018 (August 17 PR Comments).
    \21\ Comments of the U.S. Chamber of Commerce, August 17, 2018 
(Chamber of Commerce Comments).
    \22\ Comments of National Association of Manufacturers, August 
17, 2018 (NAM Comments).
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    Postal Service Comments. The Postal Service supports the proposed 
rules regarding deadlines for periodic reports, the format of the 
Monthly Summary Financial Report, and the removal of the requirement 
that the Postal Service produce hard copies of updated publications or 
handbooks.\23\
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    \23\ Postal Service Comments at 3-4. The Postal Service 
identifies two minor issues with proposed Sec.  3050.28(b)(1), Table 
1. In Order No. 4706, the Commission indicated it would include an 
input for ``Total Revenue'' but the input is not in the proposed 
Table 1. Also, existing input ``Net Operating Income'' appears as 
``New Operating Income'' in the proposed Table 1. The Postal Service 
recommends correcting Table 1 consistent with the explanation in 
Order No. 4706. Id. at 4.
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    The Postal Service agrees in theory that including in the initial 
ACR filing certain information it routinely provides in response to 
information requests would improve efficiency. Id. at 4. The Postal 
Service notes that for information regarding non-compensatory bilateral 
agreements, international product third-party service performance, and 
total workhour and related data by Labor Distribution Code, the Postal 
Service has provided the reports as additional components of existing 
ACR folders. Id. at 4-5. However, for fee distribution information 
required by proposed Sec.  3050.21(j), the Postal Service notes that in 
Docket Nos. ACR2015, ACR2016, and ACR2017, the format of the 
information varied. Id. at 5. The Postal Service states that the format 
varied due to foreseeable changes in circumstances, including new 
products, new product names, price adjustments, and transfers. Id. The 
Postal Service suggests that if the Commission desires to specify the 
format for fee distribution report each year, the existing Chairman's 
Information Request procedure would be most appropriate. Id. at 6. 
Alternatively, the Postal Service suggests that under the proposed 
rule, it could make a good-faith effort to make appropriate adjustments 
to the report's format. Id.
    The Postal Service states that the Commission should exclude 
proposed Sec.  3050.21(m), requiring Inbound Letter Post revenue, 
volume, attributable cost, and contribution data by UPU country group 
and by shape. Id. at 7. The Postal Service contends that the rule seeks 
information that is ``unrelated to the Commission's performance of its 
annual compliance determination, would encourage an incomplete and 
misleading analysis of the financial performance of [inbound letter 
post,\24\] and create a risk of significant harm from disclosure of 
commercially sensitive data.'' Id.
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    \24\ The Postal Service appears to distinguish the product, 
Inbound Letter Post, from a group of related products comprising 
``inbound letter post.'' For clarity, this Order capitalizes the 
name of the product, and does not capitalize when referring to the 
Postal Service's group of related products.
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    The Postal Service states that there is no justification for 
separation of information by UPU country group or by shape for ACR 
purposes. Id. The Postal Service states that the Commission's 
observations in previous ACR dockets on Inbound Letter Post are 
``inapplicable to the current and future financial performance of 
Inbound Letter Post,'' and do not justify the proposed reporting 
requirements. Id. at 8. The Postal Service states that the proposed 
rule's 5-year reporting period is inappropriate because of the year-to-
year changes in UPU country groups, and the limited availability of 
shape-based data. Id. at 9.
    The Postal Service also argues that the information sought will not 
present all revenue sources for inbound letter post. Id. The Postal 
Service states that it receives inbound letter post revenue from a 
number of other sources, including NSAs, supplemental UPU remuneration 
for signature confirmation

[[Page 49288]]

and tracking, PRIME multilateral agreements, negotiated rates under 
bilateral agreements, air conveyance dues, and base terminal dues. Id. 
at 9-10. The Postal Service argues that proposed Sec.  3050.21(m) 
relies only on the MCS section 1130 Inbound Letter Post revenue from 
base terminal dues and air conveyance dues, without taking into account 
these other sources of revenue for inbound letter post. Id. at 10.
    The Postal Service suggests revising proposed Sec.  3050.21(m) to 
include inbound revenue and costs for other MCS products including the 
Inbound Registered Mail, the PRIME Expr[eacute]s Service Agreement, the 
PRIME Tracked Service Agreement, the Inbound Market Dominant Multi-
Service Agreements with Foreign Postal Operators 1, and the PRIME 
Registered Service Agreement. Id. at 10-11.
    Finally, the Postal Service suggests that producing the Inbound 
Letter Post information would put sensitive non-public material at 
risk. Id. at 11-12.
    UPS Comments. UPS supports the proposed modifications to reporting 
deadlines, noting that the deadlines are reasonable and should relieve 
the reporting burden on the Postal Service, ultimately allowing it to 
provide better data. August 17 UPS Comments at 2.
    Regarding changes to the Monthly Summary Financial Report, UPS 
urges the Commission to require the Postal Service to produce two 
versions of the affected tables for the next 12 months (alternatively 6 
months if 12 months were found burdensome). Id. at 4. UPS requests that 
the Commission confirm that the only permitted departures from the 
current de facto reporting format of Table 2 are those described in 
Order No. 4607. Id. at 5. UPS states that any future changes to the 
reporting format should include a reproduction of past monthly reports 
using new definitions, or the production of both new and old versions 
of the reports for a period. Id.
    UPS supports all of the additional requirements in the proposed 
rules. Id. at 5-8. UPS asks the Commission to clarify that the Postal 
Service should report Inbound Letter Post information according to 
proposed Sec.  3050.21(m) in a public filing or library reference. Id. 
at 8. UPS renews its request for the Commission to consider requiring 
segment-level reporting for competitive products in order to promote 
transparency. Id.
    Public Representative Comments. The Public Representative supports 
the proposed changes to reporting deadlines, and does not object to 
changes to the format of the Monthly Summary Financial Report.\25\ She 
notes, as the Postal Service does, that the input for ``Total Revenue'' 
mentioned in Order No. 4706 is not in the proposed regulatory text. 
August 17 PR Comments at 4. She also notes that the proposed regulatory 
text replaces the input ``Other Expenses'' with ``Other Services'' 
without explanation. Id.
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    \25\ August 17 PR Comments at 1-2; March 7 PR Comments at 5, 6 
(incorporating prior comments).
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    Regarding proposed Sec.  3050.21(f)(6), and (j) through (m), the 
Public Representative supports the Commission's efforts to improve and 
streamline ACR dockets by requiring certain reports be included in an 
initial filing. See id. at 1. However, she suggests that the Commission 
can improve the proposed rules by using clearer, consistent, and 
precise terminology. Id. She provides line-by-line revisions with 
suggested terminology and minor reorganization. Id. at 5-6; Attachment 
A.
    The Public Representative proposes that because both proposed Sec.  
3050.21(j) and (k) apply to ``all market dominant and competitive 
products,'' both requirements are better nested as subparagraphs, below 
a paragraph stating that both requirements apply to all market dominant 
and competitive products. Id. at 2-3 (emphasis in original). She notes, 
for example, that the proposed rules unnecessarily include the phrase 
``including all negotiated service agreements'' for proposed paragraph 
(k) of this section, but not for proposed paragraph (j) of this 
section, despite both requirements being applicable to NSAs. Id. at 2.
    The Public Representative also recommends clarifying proposed Sec.  
3050.21(m), which requires Inbound Letter Post data for ``the preceding 
five fiscal years.'' Id. at 3. She notes that, as written, the rule 
appears to require data for the five years preceding the year of the 
ACR filing, without including the year of the filing. Id. at 3-4 
(emphasis added). She also states that the proposed rule was unclear as 
to whether the rule requires the Postal Service to provide data for 
each of the five years, or the five years in aggregate. Id. at 4. 
Therefore, she suggests changing the language of the rule to require 
data ``for the fiscal year subject to review and each of the preceding 
four fiscal years.'' Id. at 4, 6.
    The Public Representative includes a list of line-by-line revisions 
to the proposed rules, and a redlined version of the regulatory text. 
Id. at 5-6; Attachment A.
    U.S. Chamber of Commerce Comments. The U.S. Chamber of Commerce 
supports requiring the reporting of Inbound Letter Post data. The 
Chamber of Commerce suggests that the Postal Service should provide 
public data ``so long as delivery rates for inbound letter post are 
established by intergovernmental agreement and not equally available to 
domestic mailers and private international carriers.'' Chamber of 
Commerce Comments.
    National Association of Manufacturers Comments. NAM supports 
requiring data on Inbound Letter Post, stating that such data would 
``allow the Commission to draw meaningful inferences from trends in 
global postal traffic and to spot the nature and severity of problems 
with regard to net-losses incurred by the [Postal Service].'' NAM 
Comments at 1. NAM suggests that the UPU terminal dues system is 
``prime for abuse.'' Id. NAM states that there is a compelling public 
interest in requiring the data and that the burden on the Postal 
Service is ``non-existent.'' Id. NAM suggests that the Commission 
require the Postal Service to ``disclose more granular and useful data 
over time.'' Id. at 1-2.

IV. Commission Analysis

A. Deadlines for Certain Periodic Reports

    No commenter objects to the proposed deadlines for the filing of 
quarterly RPW, QSR, and Billing Determinants reports. Neither does any 
commenter object to the proposed deadlines for the Monthly Summary 
Financial Report or the Trial Balance.
    Accordingly, the Commission makes no changes to the deadlines set 
forth at proposed Sec. Sec.  3050.25(c)-(e), and 3050.28(b), (c). The 
Commission adopts those rules as set forth in Order No. 4706.

B. Format of Monthly Summary Financial Report

    The proposed revisions to the Monthly Summary Financial Report 
utilize a definition of ``operating revenue'' that is consistent with 
the definition used for Form 10-K reporting.\26\
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    \26\ United States Postal Service, 2017 Report on Form 10-K, 
November 14, 2017, at 19.
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    While no commenter objects to the format changes as proposed, UPS 
requests that the Commission require the Postal Service to either: (1) 
Reproduce figures in past monthly reports using the new proposed 
definitions; or (2) produce monthly reports using both the old and new 
versions of the affected tables. August 17 UPS Comments at 3-4. UPS 
states that without a device enabling direct

[[Page 49289]]

comparison of reports completed under the old format to reports 
completed under the new format, ``it will be difficult for the 
Commission and interested parties to compare certain data across 
different time periods.'' Id. at 4. UPS argues that there is 
``negligible burden on the Postal Service'' in producing the comparable 
data, and that in the interest of transparency the Commission should 
require its production for 12 months. Id. Alternatively, to the extent 
that the Commission finds such production to be too burdensome, UPS 
suggests that the Commission require production of both versions for 
only six months. Id.
    In its reply comments, the Postal Service avers that requiring 
parallel reporting of the Monthly Summary Financial Report, ``would be 
unwarranted given the modest nature of the proposed changes.'' Postal 
Service Reply Comments at 5. The Postal Service also noted that the 
Public Representative identified alternative sources of the data in the 
removed sub-inputs.\27\ UPS states that although ``Government 
Appropriation'' data are available, it is unclear whether the 
corresponding ``Mail and Service Revenue'' data are available from 
other sources. August 17 UPS Comments at 4.
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    \27\ See id. at 1-4; March 7 PR Comments at 6-7.
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    The Commission finds that the revised format, as proposed, will 
improve the quality, accuracy, and completeness of the Postal Service 
data pursuant to 39 U.S.C. 3652(e)(2). While the Commission recognizes 
the minimal burden on the Postal Service in producing duplicate tables 
under the current format and under the new format, it also finds that 
the proposal represents only a modest format change, and that the 
itemized data remain available. The ``Government Appropriations'' data, 
which refers to amounts incurred in providing free and reduced rate 
mail, are available in the Monthly Trial Balance. The former ``Mail 
Services Revenue'' line input represents the remainder of the new line 
input ``Operating Revenue'' on Table 1 and ``Total Operating Revenue'' 
on Table 2, and is now included in ``Operating Revenue'' combined with 
the ``Government Appropriations'' amount. The Commission declines to 
order that the Postal Service provide the Tables of the Monthly Summary 
Financial Report in both formats as the change itself is minor, and the 
data are available by other means.
    Both the Postal Service and the Public Representative note that the 
Commission's proposed rules do not precisely match the explanations set 
forth in Order No. 4706. Postal Service Comments at 3-4; August 17 PR 
Comments at 4-5. Both the Postal Service and Public Representative note 
the omission of the line input for ``Total Revenue'' in proposed Sec.  
3050.28(b)(1), Table 1. Id.; August 17 PR Comments at 4-6.
    The Public Representative also notes that the proposed Table 1 also 
replaces the existing line input for ``Other Expenses'' with ``Other 
Services.'' August 17 PR Comments at 4. She also notes a duplicative 
heading row in proposed Table 1, and an underlined heading, ``Total 
Volume'' in proposed Table 2. Id. at 6.
    The Postal Service notes that the line input for ``Net Operating 
Income'' in existing Table 1 appears to have changed to ``New Operating 
Income.'' Postal Service Comments at 4. The Postal Service suggests 
that the Commission correct the change. Id.
    The Commission acknowledges the errors identified by the Postal 
Service and the Public Representative, and makes appropriate 
corrections in the final rules.

C. Additional Requirements--Proposed Sec.  3050.21(f)(6), (j)-(m)

1. Public Representative's Clarification Recommendations
    The Public Representative identifies that proposed Sec.  3050.21(j) 
and (k) both apply to all market dominant products. August 17 PR 
Comments at 2-3. She proposes revising paragraph (j) of this section to 
include both requirements set forth in proposed paragraphs (j) and (k) 
of this section, with the requirements--the distribution breakdown of 
fee revenues and third-party performance results and forfeited 
revenue--as subparagraphs (1) and (2). Id.
    The Public Representative suggests revising the requirement in 
proposed Sec.  3050.21(j) of ``a distribution breakdown of mail fees'' 
with ``a distribution breakdown of fee revenues'' stating that her 
suggestion is more precise and inclusive of non-mail products. Id. at 
3.
    The Public Representative suggests a number of other changes, 
including those reflecting her proposed renumbering. Id. at 5-6. She 
suggests hyphenating the word ``non-compensatory'' in paragraph (f)(6) 
of this section. Id. at 5. She suggests revising the 5-year reporting 
requirement in paragraph (m) of this section, replacing ``the preceding 
five fiscal years'' with ``for the fiscal year subject to review and 
each of the preceding four fiscal years.'' Id. at 6.
    The Commission acknowledges that the Public Representative's 
suggested revisions are a more concise and effective alternative to 
achieving the intent of the proposed rules. The Commission finds that 
adopting the minor changes creates more precise requirements and will 
improve the quality, accuracy, and completeness of the Postal Service's 
reporting. Accordingly, the Commission adopts the Public 
Representative's suggested reorganization and rewording in its final 
rules.
2. Comments Regarding Proposed Sec.  3050.21(m)
    The U.S. Chamber of Commerce, NAM, and UPS, each support proposed 
Sec.  3050.21(m), requiring the Postal Service to provide Inbound 
Letter Post revenue, volume, attributable cost, and contribution data 
by UPU country group and shape.\28\ Those commenters note the 
importance of transparency and public access to Inbound Letter Post 
data, and identify particular public interest in the Inbound Letter 
Post product.
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    \28\ Chamber of Commerce Comments; NAM Comments at 1-2; August 
17 UPS Comments at 8.
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    The Postal Service opposes the proposed reporting requirement, 
arguing that information sought: (1) Is unrelated to the Commission's 
performance of its annual compliance determination; (2) would encourage 
incomplete and misleading analysis of Inbound Letter Post performance; 
and (3) would create a risk of harm from disclosure of commercially 
sensitive data of third parties. Postal Service Comments at 7. For the 
reasons set forth below, the Commission declines to make any additional 
modifications to proposed Sec.  3050.21(m).
a. The Requirement Is Related to the Commission's ACD
    The Postal Service suggests that the Commission's conclusions on 
the Inbound Letter Post product are ``inapplicable to the current and 
future performance'' of the product. Id. at 8. The Postal Service also 
states that those conclusions provide no justification for the 
disaggregation of Inbound Letter Post data by UPU country group and 
shape. Id.
    As noted in Order No. 4706, it is not uncommon for the Commission 
to seek enhanced information about products of particular concern. For 
example, in the FY 2017 ACD report, the Commission chose to analyze 
Periodicals volume, revenue, attributable cost, and contribution, as 
well as unit revenue, unit attributable cost, and unit

[[Page 49290]]

contribution for fiscal years 2007 through 2017.\29\ The Commission, 
noting a year-after-year trend for the Periodicals class, requested 
this enhanced disaggregated data in order to address ongoing issues 
with the class. The past performance of the Periodicals class, while 
not directly at issue in the ACD, showed a trend of insufficient 
Periodicals revenues to cover attributable costs.
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    \29\ Order No. 4706 at 17; Docket No. ACR2017, Annual Compliance 
Determination Report, Fiscal Year 2017, March 29, 2018, at 44-45 (FY 
2017 ACD).
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    When the Commission determines the noncompliance of a product, 
pursuant to 39 U.S.C. 3653(c), it must order that the Postal Service 
``take such action as the Commission considers appropriate in order to 
achieve compliance.'' 39 U.S.C. 3662(c). Conducting a trend analysis, 
as done for the Periodicals class during the FY 2017 annual compliance 
review, best allows the Commission to determine the appropriate 
remedial actions. Past performance of the product, particularly where 
it shows a trend of continued failure to cover its attributable costs, 
is relevant when determining the appropriate corrective action in an 
ACD.
    As noted in Order No. 4706, there is a well-documented history of 
concern about Inbound Letter Post's ongoing negative contribution, both 
in Commission orders and in stakeholder comments.\30\ Additionally, a 
recent Presidential Memorandum directed the executive branch to seek 
reforms within the UPU's terminal dues system that provides: (1) Fair 
and nondiscriminatory terminal dues that promote unrestricted and 
undistorted competition; (2) terminal dues that cover the costs of 
delivering Inbound Letter Post mailpieces; (3) and terminal dues that 
avoid favoring foreign mailers over domestic mailers or favoring postal 
operators over private sector entities.\31\ This Presidential 
Memorandum highlights the Administration's focus on the Inbound Letter 
Post product. Accordingly, the Commission finds that providing enhanced 
data for the purposes of conducting a trend analysis across a period of 
years is appropriate, particularly where the prices for a product or 
products have routinely been non-compensatory.
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    \30\ Order No. 4706 at 18 n.35. See Docket No. IM2016-1, 
Congressional Letter to Secretary of State Rex Tillerson and 
Postmaster General Megan Brennan, November 8, 2017; Docket No. 
ACR2017, Comments of James Smaldone, Founder & CEO, Mighty Mug, 
Inc., January 25, 2018, at 1-2; Docket No. ACR2017, Comments of 
National Association of Manufacturers on Order No. 4377, January 24, 
2018, at 2; Docket No. ACR2017, Comments of United Parcel Service, 
Inc. in Response to Notice of Preliminary Determination to Unseal 
the Material Filed in Response to Chairman's Information Request No. 
1, Question 1, January 24, 2018, at 2-3; Docket No. ACR2017, 
Comments of the Honorable Kenny Marchant on Determination to Unseal 
the Material Filed in Response to Chairman's Information Request No. 
1, Question 1, January 25, 2018, at 1-2; Docket No. ACR2017, 
Comments of U.S. Chamber of Commerce, January 25, 2018, at 1-2; 
Docket No. ACR2017, Comments of SBE Council Related to Inbound 
Letter Post, February 20, 2018, at 1-2; Docket No. ACR2017, Comments 
of United Parcel Service, Inc. in Response to Notice of Preliminary 
Determination to Unseal the Postal Service's Response to Chairman's 
Information Request No. 15, February 23, 2018, at 3-4; Docket No. 
ACR2017, Reply Comments of United Parcel Service, Inc. on United 
States Postal Service Motion for Reconsideration of Order No. 4551, 
April 13, 2018, at 4; Docket No. ACR2017, Comments of U.S. Chamber 
of Commerce, April 13, 2018, at 1; Docket No. IM2018-1, Comments 
Received from U.S. Representatives Kenny Marchant and Ralph Abraham, 
July 3, 2018, at 1; Docket No. IM2018-1, Comment Received from U.S. 
Senator Bill Cassidy, M.D., July 3, 2018, at 1.
    \31\ See Presidential Memorandum for the Secretary of State, 
Secretary of the Treasury, Secretary of Homeland Security, 
Postmaster General, and Chairman of the Postal Regulatory 
Commission, August 23, 2018, available at: https://www.whitehouse.gov/presidential-actions/presidential-memorandum-secretary-state-secretary-treasury-secretary-homeland-security-postmaster-general-chairman-postal-regulatory-commission/.
---------------------------------------------------------------------------

    The Postal Service notes that a new terminal dues system that 
charges higher prices for bulky letters and small packets than for 
letters and flats may improve the Inbound Letter Post product's 
financial performance. Postal Service Comments at 8. The Postal Service 
avers that the past performance of Inbound Letter Post under the former 
terminal dues rate structure is not relevant to the Commission ACD 
dockets under a new rate structure. Id. at 7-8.
    The revenue, volume, attributable cost, and contribution data--even 
for past years under a different terminal dues rate structure--are of 
significant value in the Commission's ACD. The Commission's analysis of 
these data assists in identifying the cause or causes of the product's 
negative contribution. If for example, under the new rate structure, 
the product continues to display similar trends, the Commission might 
identify problems with the product unrelated to price structure. Price 
structure is not singularly determinative of a product's financial 
performance. Other factors might contribute to the product's 
performance. For example, in its trend analysis on the Periodicals 
class, the Commission identified declining productivity of mail 
processing operations as a reason for the negative trend. See FY 2017 
ACD at 50. The data required by proposed Sec.  3050.21(m) will assist 
the Commission's efforts to identify the challenges facing the product, 
and to make appropriate recommendations.
    The new rate structure has separate rates for letters/flats and 
bulky letters/small packets, which vary by UPU country group.\32\ The 
Commission's ability to identify which rates account for what portion 
of the product's contribution is critical to assessing how to improve 
overall product cost coverage. To the extent that a new price structure 
does improve Inbound Letter Post performance, such improvement will be 
reflected in the data reporting, and more easily attributed to the 
changes in price structure, due to the fuller picture provided by the 
enhanced reporting.
---------------------------------------------------------------------------

    \32\ See Universal Postal Union, Decisions of the 2016 Istanbul 
Conference, Universal Postal Convention, Final Protocol, Section 
VII, Article 29, October 6, 2016.
---------------------------------------------------------------------------

    Given the public interest and the Commission's recurring findings 
that Inbound Letter Post revenue fails to cover the product's costs, 
the Commission finds that it is necessary and appropriate to require 
reporting at this additional level of aggregation. The Postal Service's 
current reporting format does not disaggregate by shape and UPU country 
group so it is difficult to determine what particular aspect or aspects 
of the terminal dues system are responsible for most of the negative 
contribution. Providing this disaggregated information will aid the 
Commission in determining the appropriate remedial action to prescribe.
    Furthermore, the legislative history underlying the Postal 
Accountability and Enhancement Act (PAEA) indicates that enhanced 
transparency was a key motivation in the enactment of the PAEA.\33\ The 
Commission, consistent with this goal, aims to be transparent in its 
issuance of regulatory decisions and encourages public participation in 
its dockets.\34\ In fact, the PAEA requires the Commission to consider 
whether the public has access to ``timely, adequate information'' when 
prescribing the content and form of the ACR. 39 U.S.C. 3652(e)(1)(A). 
The additional Inbound Letter Post data required under proposed Sec.  
3050.21(m) will not only improve the completeness of information 
available to the

[[Page 49291]]

Commission for its determination, but will also enhance public 
participation by presenting more comprehensive and understandable data 
for a product of substantial public interest.
---------------------------------------------------------------------------

    \33\ Public Law 109-435, 120 Stat. 3198 (2006). Both the 
committee report accompanying S. 2468, the Senate's 2004 postal 
reform bill, and the committee report accompanying H.R. 22, the 
House of Representatives' 2005 postal reform bill, noted that 
enhanced transparency and accountability were essential aspects of 
postal reform. S. Rep. No. 108-318 at 5 (2004), H.R. Rep. No. 109-
66, pt. 1 at 43 (2005).
    \34\ See Postal Regulatory Commission, Guiding Principles, 
Openness, available at: www.prc.gov/mission.
---------------------------------------------------------------------------

    The Postal Service also states that the proposed rule's 5-year 
reporting period is inappropriate because of the year-to-year changes 
in the composition of UPU country groups, and that data limitations may 
reduce the Postal Service's ability to produce shape-based data for 
previous years. Postal Service Comments at 9.
    The Commission acknowledges that changes to the composition of UPU 
country groups create year-to-year comparison challenges. However, the 
Commission has experience in analyzing changes within and among 
products. For example, the Commission has been able to account for 
previous changes to the composition of UPU country groups in previous 
ACDs.\35\ Thus, the Commission is prepared to address these challenges. 
To the extent that the Postal Service lacks a full 5-year accounting of 
shape-based data, the Commission notes that the Postal Service is able 
to request the exclusion or partial exclusion of that component of the 
reporting requirement until such time that shape-based data becomes 
available for an entire 5-year period. See 39 CFR 3055.3(a).
---------------------------------------------------------------------------

    \35\ See Docket No. ACR2016, Annual Compliance Determination 
Report, Fiscal Year 2016, March 28, 2017, at 63-64.
---------------------------------------------------------------------------

b. The Requirement Does Not Encourage Incomplete or Misleading Analysis 
of Inbound Letter Post Performance
    The Postal Service states that proposed Sec.  3050.21(m), if 
implemented, will ``encourage the use of data that support an 
incomplete and inaccurate evaluation of the financial performance of 
inbound letter post.'' Postal Service Comments at 9. The Postal 
Service's concern is that because proposed Sec.  3050.21(m) requires 
reporting on the Inbound Letter Post product \36\ it will not reflect 
the financial performance of other products the Postal Service 
classifies as ``inbound letter post.'' \37\ The Postal Service suggests 
that for an accurate assessment of the financial performance of 
``inbound letter post,'' the Commission should consider volume and 
supplemental revenue derived from those other products. The Postal 
Service proposes an alternative reporting requirement for inbound 
revenues and costs for MCS sections 1130, 1510.2, and 1602. Postal 
Service Comments at 10-11. Notably, the Postal Service's proposal does 
not require that the Postal Service report the alternative data by UPU 
country group and shape. See id.
---------------------------------------------------------------------------

    \36\ MCS section 1130.
    \37\ The Postal Service identifies these products as MCS 
sections 1510.2.2 (International Ancillary Services, Inbound 
International Registered Mail), 1602.5 (Negotiated Service 
Agreements, International, Inbound Market Dominant Registered 
Service Agreement 1), 1602.4 (Negotiated Service Agreements, 
International, Inbound Market Dominant Expr[eacute]s Service 
Agreement 1), 1602.6 (Negotiated Service Agreements, International, 
Inbound Market Dominant PRIME Tracked Service Agreement, 1602.3 
(Negotiated Service Agreements, International, Inbound Market 
Dominant Multi-Service Agreements with Foreign Postal Operators 1), 
July 15, 2018. Postal Service Comments at 10-11.
---------------------------------------------------------------------------

    The Commission finds the Postal Service's concerns about misleading 
data unpersuasive. The Postal Service made a similar argument during 
the FY 2017 ACD proceeding.\38\ In Docket No. ACR2017, the Postal 
Service asserted that the analysis for the Inbound Letter Post product 
should include analysis of ``the volume and revenue for supplemental 
UPU remuneration for signature confirmation and tracking on registered 
items as well as for bilateral market dominant NSAs and the PRIME 
multilateral market dominant NSAs.'' FY 2017 ACD at 66. The Postal 
Service stated that the Public Representative's analysis of the Inbound 
Letter Post product was incomplete because it was limited to the volume 
and revenue for the Inbound Letter Post product. Id. In the FY 2017 ACD 
report, the Commission rejected the Postal Service's suggested analysis 
and stated that ``[t]he Commission has consistently evaluated 
compliance at the product level because products, by definition, 
reflect distinct cost or market characteristics to which a rate or 
rates are applied.'' Id. at 67.
---------------------------------------------------------------------------

    \38\ See Docket No. ACR2017, Reply Comments of the United States 
Postal Service on Inbound Letter Post, February 27, 2018.
---------------------------------------------------------------------------

    In each ACD, the Commission reviews each product, including those 
identified by the Postal Service as ``inbound letter post,'' for cost 
coverage and compliance. For example, in FY 2017, the Commission found 
that ``International Ancillary Services did not cover its attributable 
cost due to the failure of International Registered Mail to cover its 
attributable cost.'' Id. at 71. The Commission also reviewed Market 
Dominant NSA products, finding that Inbound Market Dominant Multi-
Service Agreements with Foreign Postal Operators 1, Inbound Market 
Dominant Expr[eacute]s Service Agreement 1, and Inbound Market Dominant 
Registered Service Agreement 1 products satisfied 39 U.S.C. 
3622(c)(10), while Inbound Market Dominant PRIME Tracked Service 
Agreement product did not. Id. at 74.
    The Commission fulfills its mandate to determine whether the rates 
or fees in effect comply with 39 U.S.C. 3622 at the product level. 39 
U.S.C. 3653(b)(1). The Postal Service provides no compelling basis for 
the Commission to depart from the reasonable practice of evaluating 
compliance for each market dominant international mail product at the 
product level. The other products the Postal Service classifies as 
``inbound letter post'' are in fact distinct products from the Inbound 
Letter Post product, and the performances of those products speak for 
themselves. The Commission reviews those products for compliance 
transparently in its ACD. Because the Commission makes a determination 
of compliance for each of those products individually, increased 
granularity will not give rise to a misleading representation of 
Inbound Letter Post performance. In contrast, the Postal Service's 
suggestion would mask the data by aggregating it with other products' 
data, which would be less transparent and potentially misleading. 
Accordingly, the Commission declines to remove the proposed reporting 
requirement for the Inbound Letter Post product on the basis that the 
additional data will be incomplete or misleading.
c. The Potential Risk of Commercial Harm Resulting From Disclosing 
Commercially Sensitive Data of Third Parties is Outside the Scope of 
This Rulemaking Proceeding
    The Postal Service states that requiring reporting of additional 
data by UPU country group and shape would put commercially sensitive 
third-party information at risk of disclosure.\39\ The Postal Service 
acknowledges it would file the Inbound Letter Post data required under 
proposed Sec.  3050.21(m) under seal, but suggests that a non-public 
filing would likely be challenged. Id.
---------------------------------------------------------------------------

    \39\ Postal Service Comments at 11-12. The Postal Service 
incorporates by reference its discussion in Docket No. ACR2017. See 
Docket No. ACR2017, United States Postal Service Motion for 
Reconsideration of Order No. 4451, April 6, 2018; Docket No. 
ACR2017, Response of the United States Postal Service to Order No. 
4409, February 23, 2018; Docket No. ACR2017, United States Postal 
Service Notice of Filing Nonpublic Folder USPS-FY17-NP40 and 
Application for Nonpublic Treatment, February 14, 2018.
---------------------------------------------------------------------------

    The Postal Service acknowledges that the PAEA and the Commission 
rules outline a procedure for application for non-public treatment of 
information. See id. To the extent that the Postal Service believes 
that public disclosure of Inbound Letter Post data separated by UPU 
country group and shape would

[[Page 49292]]

cause a commercial harm, it could file an application for non-public 
treatment pursuant to Sec. Sec.  3007.200 and 3007.201 of this chapter. 
As noted in Order No. 4707, the application must particularly identify 
``the nature and extent of the harm alleged and the likelihood of each 
harm.'' \40\ The Commission's regulations also outlines a procedure for 
participants or the Commission to seek to unseal material filed non-
publicly by the Postal Service. See 39 CFR 3007.103; see also 39 CFR 
3007.104. Accordingly, the Commission will address the non-public 
status of data filed under proposed Sec.  3050.21(m), if and when the 
Postal Service files the data under seal and if the Commission issues a 
preliminary determination concerning the appropriate degree of 
protection, if any, to be accorded to materials filed under seal.
---------------------------------------------------------------------------

    \40\ Docket No. ACR2017, Order Denying Motion for 
Reconsideration of Order No. 4451 as Moot, July 12, 2018, at 15 
(Order No. 4707); see 39 CFR 3007.201(b)(4).
---------------------------------------------------------------------------

    The Commission finds that rules regarding non-public treatment of 
commercially sensitive information are sufficient in addressing the 
Postal Service's concerns. The Postal Service's assertion that a 
challenge to a non-public disclosure would put the information ``at 
risk'' is not itself enough reason to support removing the proposed 
reporting requirement altogether. Accordingly, the Commission declines 
to remove proposed Sec.  3050.21(m) on the basis of hypothetical risk 
to commercially sensitive information.
3. Concerns Regarding Proposed Sec.  3050.21(j)
    The Postal Service states that it agrees, in theory, that including 
material routinely requested in ACR proceedings in the initial filing 
is likely to be more efficient. Postal Service Comments at 4. The 
Postal Service notes, however, that for fee distribution data, the 
Commission's requests have sought the information in different formats 
in each of the past three years. Id. at 5. The Postal Service correctly 
attributes these format changes to continuing adjustments to products 
lists. Id. The Postal Service, anticipating that those adjustments will 
continue going forward, offers two suggestions for determining the 
format of fee distribution data. Id. at 6.
    The Postal Service suggests that the Commission might determine 
that it is most efficient to continue the current practice of using an 
information request specifying the format for the fee distribution 
data. Id. Such a determination would obviate the need to adopt proposed 
Sec.  3050.21(j) as a final rule. The Postal Service suggests that 
alternatively, the Commission could allow the Postal Service to make 
reasonable updates to the format of the report each year, pursuant to 
the anticipated product adjustments. Id.
    The Commission is satisfied with the Postal Service's proposal to 
make efforts to make appropriate changes to the format of fee 
distribution data based on product adjustments. In its annual 
submission, the Postal Service should identify any such product 
adjustments and corresponding format changes.

D. Removal of Unnecessary Requirement in Sec.  3050.60(c)

    No commenter objects to the removal of the requirement that the 
Postal Service provide hard-copy updates of publications and handbooks. 
The Postal Service supports the modification. Id. at 3. Accordingly, 
the Commission does not make any changes to proposed Sec.  3050.60(c).

E. Other Comments--Segment-Level Data

    UPS requests that the Commission reconsider its position on a 
proposal to require segment-level reporting for competitive products. 
August 17 UPS Comments at 8. In Order No. 4706, the Commission 
explained that it declined to propose such requirements, because the 
current single segment reporting is adequate for determining 
compliance. Order No. 4706 at 12-13. The PAEA allows the Commission to 
consider the adequacy of information provided in determining the 
lawfulness of rates charged, and can revise the reporting requirements 
to ``improve the quality, accuracy, or completeness of Postal Service 
data.'' 39 U.S.C. 3652(e)(2). UPS states that requiring segment-level 
reporting ``would promote transparency and represent an improvement 
over the status quo.'' August 17 UPS Comments at 8.
    The Commission finds that UPS has not shown that the current 
single-level reporting practices are inaccurate or inadequate. UPS must 
show that the data, ``ha[ve] become significantly inaccurate or can be 
significantly improved.'' 39 U.S.C. 3652(e)(2)(A) (emphasis added). The 
proposal for segment-level reporting may be appropriate for review in 
another docket devoted toward the question. In the instant docket, 
however, UPS has not demonstrated the inadequacy in the current 
reporting method or how it would be significantly improved for 
determining compliance. In fact, the Commission finds that the current 
single-level reporting is sufficiently accurate and adequate for the 
purposes of assessing compliance. Accordingly, the Commission declines 
to adopt rules requiring segment-level reporting for competitive 
products.

V. Changes to the Proposed Rules

    The final rules incorporate many of the commenters' suggestions. 
The final rules contain the correction of some omissions from the 
proposed rules, adjust the language of proposed rules, and restructure 
and renumber proposed rules. The substance of the rules initially 
proposed in Order No. 4706 largely remains the same. Below, the 
Commission describes the differences between the proposed and final 
rules.

A. Section 3050.21

    Proposed Sec.  3050.21(f)(6) is revised to hyphenate the word 
``non-compensatory'' pursuant to the suggestion of the Public 
Representative. Also, because of the addition of paragraph (f)(6) of 
this section, the word ``and'' at the end of paragraph (f)(4) of this 
section is moved to the end of paragraph (f)(5) of this section. The 
Commission adopts this revision pursuant to the Public Representative's 
suggestion.
    Proposed Sec.  3050.21(j) and (k) are revised as paragraphs (j)(1) 
and (j)(2) of this section. Paragraph (j) of this section now reads 
``For all market dominant and competitive products.'' Proposed 
paragraph (j) of this section, now located at paragraph (j)(1) of this 
section, required the distribution breakdown of mail fees. The final 
rule replaces ``mail fees'' with ``fee revenues'' to more accurately 
reflect that the requirement applies to some non-mail products. 
Proposed paragraph (k) of this section, now located at paragraph (j)(2) 
of this section required the Postal Service to ``provide . . . the 
amount of any forfeited revenue.'' Final Sec.  3050.21(j)(2) revises 
the proposed rule, now requiring that the Postal Service ``identify'' 
the amount of forfeited revenue.
    Because the final rules combine proposed paragraphs (j) and (k) of 
this section, the final rules require a minor restructuring and 
renumbering. Proposed paragraphs (l) through (n) of this section are 
revised and renumbered as paragraphs (k) through (m) of this section, 
respectively.
    The Commission also revises proposed Sec.  3050.21(m), renumbered 
to Sec.  3050.21(l) in the final rules, pursuant to the Public 
Representative's suggestion. The proposed rule required Inbound Letter 
Post Date ``for the preceding five fiscal years.'' Final

[[Page 49293]]

Sec.  3050.21(l) more precisely defines this requirement as ``the 
fiscal year subject to review and each of the preceding four fiscal 
years.''
    Because of the renumbering, the Commission also adopts a revision 
to proposed Sec.  3050.21(a), listing the required content of the 
Postal Service's section 3652 report. The proposed rule states that the 
report shall provide the items listed in paragraphs (b) through (n) of 
this section. Consistent with the renumbering, the final rule states 
that the report shall provide the items listed in paragraphs (b) 
through (m) of this section.
    The Commission also revises the amendatory instructions for the 
Federal Register, consistent with the revisions made to Sec.  3050.21.

B. Section 3050.25

    The Commission does not revise Sec.  3050.25 as proposed in Order 
No. 4706.

C. Section 3050.28

    In consideration of the comments of the Postal Service and the 
Public Representative, the Commission makes several revision to 
proposed Sec.  3050.28(b)(1), Table 1 and Table 2.
    The final rules add the input ``Total Revenue'' beneath the sub-
inputs for ``Operating Revenue'' and ``Other Revenue'' and above 
``Operating Expenses'' in Table 1. This revision is consistent with the 
explanation of changes in Order No. 4706. Pursuant to the Postal 
Service's suggestion, the Commission revises the input ``New Operating 
Income'' in proposed Table 1. The final rules correct the input to 
``Net Operating Income.'' The final rules also remove a duplicative 
heading row in Table 1 and extraneous underlining within certain cells 
in Table 2.
    The Commission, pursuant to the Public Representative's suggestion, 
revises the amendatory instructions preceding final Sec.  3050.28, to 
indicate that the introductory language in paragraph (b) of this 
section also contains revisions. The content of the introductory text 
of paragraph (b) of this section remains unchanged from that proposed 
in Order No. 4706.

D. Section 3050.60(c)

    The Commission does not revise Sec.  3050.50(c) as proposed in 
Order No. 4706.

VI. Ordering Paragraphs

    It is ordered:
    1. Part 3050 of title 39, Code of Federal Regulations, is revised 
as set forth below the signature of this Order, effective 30 days after 
publication in the Federal Register.
    2. The Postal Service shall make a good-faith effort to make 
appropriate adjustments to the format of the fee distribution in each 
year's Annual Compliance Report, as necessary to reflect product 
changes.
    3. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Stacy L. Ruble,
Secretary.

List of Subjects in 39 CFR Part 3050

    Administrative practice and procedure, Reporting and recordkeeping 
requirements.

    For the reasons discussed in the preamble, the Commission amends 
Chapter III of title 39 of the Code of Federal Regulations as follows:

PART 3050--PERIODIC REPORTING

0
1. The authority citation for part 3050 continues to read as follows:

    Authority: 39 U.S.C. 503, 3651, 3652, 3653.

0
2. Amend Sec.  3050.21 by:
0
a. Revising paragraphs (a) and (f)(4) and (5),
0
b. Adding paragraph (f)(6),
0
c. Revising paragraph (j), and
0
d. Adding paragraphs (k), (l), and (m).
    The revisions and addtions read as follows:


Sec.  3050.21   Content of the Postal Service's section 3652 report.

    (a) No later than 90 days after the close of each fiscal year, the 
Postal Service shall submit a report to the Commission analyzing its 
costs, volume, revenue, rate, and service information in sufficient 
detail to demonstrate that all products during such year comply with 
all applicable provisions of title 39 of the United States Code. The 
report shall provide the items in paragraphs (b) through (m) of this 
section.
* * * * *
    (f) * * *
    (4) Analyze the contribution of the agreement to institutional 
costs for its most recent year of operation. The year analyzed shall 
end on the anniversary of the negotiated service agreement that falls 
within the fiscal year covered by the Postal Service's annual periodic 
reports to the Commission and include the 12 preceding months. The 
analysis shall show all calculations and fully identify all inputs. 
Inputs used to estimate the effect on total contribution to the Postal 
Service, such as unit costs and price elasticities, shall be updated 
using fiscal year values;
    (5) Analyze the effect of the negotiated service agreement (and 
other functionally equivalent negotiated service agreements) on the 
marketplace. If there were harmful effects, explain why those effects 
were not unreasonable; and
    (6) Provide financial or other supporting documentation that 
demonstrates that non-compensatory market dominant negotiated service 
agreements improve the net financial position of the Postal Service 
over default rates or enhance the performance of mail preparation, 
processing, transportation, or other functions.
* * * * *
    (j) For all market dominant and competitive products:
    (1) Provide a distribution breakdown of fee revenues, including all 
underlying calculations and source workpapers; and
    (2) Provide any third-party service performance results upon which 
any financial penalty or bonus is determined, and identify the amount 
of any forfeited revenue;
    (k) Provide all total workhour data and data sources showing 
workhour measurements by Labor Distribution Code;
    (l) For the Inbound Letter Post product, provide revenue, volume, 
attributable cost, and contribution data by Universal Postal Union 
country group and by shape for the preceding the fiscal year subject to 
review and each of the preceding four fiscal years; and
    (m) Provide any other information that the Postal Service believes 
will help the Commission evaluate the Postal Service's compliance with 
the applicable provisions of title 39 of the United States Code.

0
3. Amend Sec.  3050.25 by revising paragraphs (c), (d), and (e) to read 
as follows:


Sec.  3050.25  Volume and revenue data.

* * * * *
    (c) Revenue, pieces, and weight by rate category and special 
service by quarter, within 40 days of the close of Quarters 1, 2, and 3 
of the fiscal year and 60 days after Quarter 4, but no later than the 
filing of reports filed pursuant to section 3050.40(a) or 3050.40(b);
    (d) Quarterly Statistics Report, including estimates by shape, 
weight, and indicia, within 40 days of the close of Quarters 1, 2, and 
3 of the fiscal year and 60 days after Quarter 4 but no later than the 
filing of reports filed pursuant to section 3050.40(a) or 3050.40(b); 
and
    (e) Billing determinants within 60 days of the close of Quarters 1, 
2, and

[[Page 49294]]

3 of the fiscal year and 90 days after Quarter 4.

0
4. Amend Sec.  3050.28 by revising paragraph (b) introductory text, 
tables 1 and 2 in paragraph (b)(1), and paragraph (c) to read as 
follows:


Sec.  3050.28  Monthly and pay period reports.

* * * * *
    (b) Monthly Summary Financial Report on the 24th day of the 
following month, except that the reports for the last months of 
Quarters 1, 2, and 3 of the fiscal year shall be provided at the time 
that the Form 10-Q report is provided and the report for the last month 
of Quarter 4 of the fiscal year shall be provided at the time that the 
Form 10-K report is provided;
    (1) * * *

                                                                            Table 1--USPS Monthly Financial Statement
                                                                                       Month, Fiscal Year
                                                                                          [$ millions]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          Current Period                                                   Year-to-Date
                                                                 -------------------------------------------------------------------------------------------------------------------------------
                                                                    Actual       Plan        SPLY      % Plan Var    % SPLY Var     Actual       Plan        SPLY      % Plan Var    % SPLY Var
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Revenue:
    Operating Revenue
    Other Revenue
Total Revenue
Operating Expenses
    Personnel Compensation and Benefits
    Transportation
    Supplies and Services
    Other Services
Total Operating Expenses
Net Operating Income
Interest Income
Interest Expense
Total Net Income
Other Operating Statistics
    Mail Volume (Millions)
        Total Market Dominant Volumes
        Total Competitive Product Volumes
Total Mail Volumes
Total Workhours (Millions)
Total Career Employees
Total Non-Career Employees
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


                                                          Table 2--Mail Volume and Mail Revenue
                                                                   Month, Fiscal Year
                                                                       [Thousands]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Current Period                                      Year-to-Date
                                                   -----------------------------------------------------------------------------------------------------
                                                         Actual            SPLY          % SPLY Var         Actual            SPLY          % SPLY Var
--------------------------------------------------------------------------------------------------------------------------------------------------------
Market Dominant Products:
    First Class:
        Volume
        Revenue
    Periodicals:
        Volume
        Revenue
USPS Marketing Mail:
        Volume
        Revenue
    Package Services:
        Volume
        Revenue
    All Other Market Dominant Mail:
        Volume
        Revenue
Total Market Dominant Products:
        Volume
        Revenue
Total Competitive Products
        Volume
        Revenue
Total Operating Revenue:
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Volume
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 49295]]

* * * * *
    (c) National Consolidated Trial Balances and the Revenue and 
Expense Summary on the 24th day of the following month, except that the 
reports for the last month of Quarters 1, 2, and 3 of the fiscal year 
shall be provided at the time that the Form 10-Q report is provided and 
the report for the last month of Quarter 4 of the fiscal year shall be 
provided at the time that the Form 10-K report is provided;
* * * * *

0
5. Amend Sec.  3050.60 by revising paragraph (c) to read as follows:


Sec.  3050.60   Miscellaneous reports and documents.

* * * * *
    (c) The items listed in paragraph (b) of this section in electronic 
form;
* * * * *
[FR Doc. 2018-21249 Filed 9-28-18; 8:45 am]
 BILLING CODE 7710-FW-P