[Federal Register Volume 83, Number 200 (Tuesday, October 16, 2018)]
[Proposed Rules]
[Pages 52178-52179]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-22457]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3050

[Docket No. RM2019-1; Order No. 4849]


Periodic Reporting

AGENCY: Postal Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission is acknowledging a recent filing requesting the 
Commission initiate a rulemaking proceeding to consider changes to 
analytical principles relating to periodic reports (Proposal Eight). 
This document informs the public of the filing, invites public comment, 
and takes other administrative steps.

DATES: Comments are due: November 9, 2018.

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 Eight

[[Page 52179]]

III. Notice and Comment
IV. Ordering Paragraphs

I. Introduction

    On October 5, 2018, the Postal Service filed a petition pursuant to 
39 CFR 3050.11 requesting that the Commission initiate a rulemaking 
proceeding to consider changes to analytical principles relating to 
periodic reports.\1\ The Petition identifies the proposed analytical 
changes filed in this docket as Proposal Eight.
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    \1\ Petition of the United States Postal Service for the 
Initiation of a Proceeding to Consider Proposed Changes in 
Analytical Principles (Proposal Eight), October 5, 2018 (Petition).
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II. Proposal Eight

    Background. The Postal Service seeks to modify the modeling 
methodology in First-Class Mail and Marketing Mail Letter cost models 
to reflect current operational flows. Petition, Proposal Eight at 1. 
The Postal Service states that Proposal Eight relates to the 
Commission's directive in the FY 2017 Annual Compliance Determination 
Report for the Postal Service to ``provide a plan to move the 
passthrough toward 100 percent'' for USPS Marketing Mail Automation 
Letters Barcoding.\2\ The Postal Service states Proposal Eight ``aligns 
the barcode cost avoidance and the associated passthrough with the 
Commission's directive.'' Id.
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    \2\ Id. Docket No. ACR2017, Annual Compliance Determination 
Report, March 29, 2018, at 26.
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    The Postal Service states that it developed its current mail 
processing letter cost models when cancellation equipment had limited 
functionality. Id. at 2. The outgoing primary scheme could not isolate 
mail for all automated area distribution centers (AADCs), and mail for 
low volume AADCs flowed to the outgoing secondary scheme. Id.
    The Postal Service states that due to advances in Optical Character 
Recognition (OCR) technology, its Advanced Facer Canceller System 
(AFCS) is now able to read addresses and isolate locally-processed mail 
from mail destinating in the service territory of other processing 
facilities. Id. This capability eliminated the need for local 
separations on outgoing primary schemes, or the processing of pre-
barcoded mail on the outgoing secondary scheme. Id. The Postal Service 
states the result is an increased quantity of mail processed on the 
outgoing primary scheme. Id. at 2-3.
    Proposal. The Postal Service proposes three operational and 
methodological changes: (1) Modification of models to reflect current 
operational flows; (2) correction of the exclusion of mechanical 
rejects from the Input Sub System (ISS); and (3) removal of the 
conflation of differential flows between Output Sub System (OSS) 
operations and automation barcode sortation (BCS) operations in the 
Marketing Mail Letters cost model. Id. at 3.
    The Postal Service states that modification 1 aligns the current 
operational flows of automation pre-barcoded Mixed AADC (MAADC) mail 
with modeled automation mail. Id. at 4. The modification changes the 
inflow of 10,000 pieces of modeled mail from the outgoing secondary 
entry point. Id. The Postal Service states that the ``modification 
directly impacts only the Automation MAADC Presort Letters and Cards 
categories.'' Id.
    The Postal Service states that the current letter models do not 
account for mechanical rejects that flow to manual operations. Id. The 
Postal Service states that the delivery BCS (DBCS) Input Output Sub 
System (DIOSS) reject rate is composed of the OSS rate of rejects 
flowing to manual operations. Id. Modification 2 ``corrects the DIOSS 
operations' treatment of rejects to that of traditional OSS/ISS 
operations for treatment of pieces flowing to manual operations and to 
OSS operations.'' Id.
    The Postal Service suggests that the current Marketing Mail Letters 
cost model, calculating the barcode cost avoidance as the difference 
between modeled (Non-Automation) Machinable MAADC letters and 
Automation MAADC letters, ``conflates the value of the barcode with 
intrinsic differences between non-barcoded and automation mail.'' Id. 
at 5. Modification 3 corrects the model for machinable MAADC mail by 
using the same down flow densities as automation MAADC mail, ``thereby 
accurately estimating the value of a barcode when used as a 
benchmark.'' Id. The Postal Service states that this modification 
applies only to Marketing Mail Letters. Id. at 6.
    Rationale and impact. The Postal Service states that it intends for 
the proposal to modify the letter processing models to reflect 
``current operational reality.'' Id. at 1. The Postal Service states 
that the proposal would increase the barcode cost avoidance of 
Marketing Mail Automation MAADC letters from $0.001 to $0.006, while 
reducing the passthrough from 1300 percent to 217 percent. Id. at 6. 
The Postal Service provides the change in mail processing unit costs 
for Marketing Mail Letters and First-Class Mail Letters and Cards. Id. 
at 7-8.

III. Notice and Comment

    The Commission establishes Docket No. RM2019-1 for consideration of 
matters raised by the Petition. More information on the Petition may be 
accessed via the Commission's website at http://www.prc.gov. Interested 
persons may submit comments on the Petition and Proposal Eight no later 
than November 9, 2018. Pursuant to 39 U.S.C. 505, the Commission 
designates Katalin K. Clendenin as an 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. RM2019-1 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 Eight), filed October 5, 2018.
    2. Comments by interested persons in this proceeding are due no 
later than November 9, 2018.
    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. 2018-22457 Filed 10-15-18; 8:45 am]
 BILLING CODE 7710-FW-P