[Federal Register Volume 84, Number 21 (Thursday, January 31, 2019)]
[Notices]
[Pages 826-828]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-00396]
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POSTAL REGULATORY COMMISSION
[Docket No. ACR2018; Order No. 4960]
FY 2018 Annual Compliance Report
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
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SUMMARY: The Postal Service has filed an Annual Compliance Report on
the costs, revenues, rates, and quality of service associated with its
products in fiscal year 2018. Within 90 days, the Commission must
evaluate that information and issue its determination as to whether
rates were in compliance with title 39, chapter 36, and whether service
standards in effect were met. To assist in this, the Commission seeks
public comments on the Postal Service's Annual Compliance Report.
DATES: Comments are due: January 31, 2019. Reply Comments are due:
February 11, 2019.
ADDRESSES: Submit comments electronically via the Commission's Filing
Online system at http://www.prc.gov. Those who cannot submit comments
electronically should contact the person identified in the FOR FURTHER
INFORMATION CONTACT section by telephone for advice on filing
alternatives.
FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at
202-789-6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Overview of the Postal Service's FY 2018 ACR
III. Procedural Steps
IV. Ordering Paragraphs
I. Introduction
On December 28, 2018, the United States Postal Service (Postal
Service) filed with the Commission its Annual Compliance Report (ACR)
for fiscal year (FY) 2018, pursuant to 39 U.S.C. 3652.\1\ Section 3652
requires submission of data and information on the costs, revenues,
rates, and quality of service associated with postal products within 90
days of the closing of each fiscal year. In conformance with other
statutory provisions and Commission rules, the ACR includes the Postal
Service's FY 2018 Comprehensive Statement, its FY 2018 annual report to
the Secretary of the Treasury on the Competitive Products Fund, and
certain related Competitive Products Fund material. See respectively,
39 U.S.C. 3652(g), 39 U.S.C. 2011(i), and 39 CFR 3060.20-23. In line
with past practice, some of the material in the FY 2018 ACR appears in
non-public annexes.
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\1\ United States Postal Service FY 2018 Annual Compliance
Report, December 28, 2018 (FY 2018 ACR). Public portions of the
Postal Service's filing are available on the Commission's website at
http://www.prc.gov.
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The filing begins a review process that results in an Annual
Compliance Determination (ACD) issued by the Commission to determine
whether Postal Service products offered during FY 2018 were in
compliance with applicable title 39 requirements.
II. Overview of the Postal Service's FY 2018 ACR
Contents of the filing. The Postal Service's FY 2018 ACR consists
of a 77-page narrative; extensive additional material appended as
separate folders and identified in Attachment One; and an application
for non-public treatment of certain materials, along with supporting
rationale, filed as Attachment Two. The filing also includes the
Comprehensive
[[Page 827]]
Statement,\2\ Report to the Secretary of the Treasury, and information
on the Competitive Products Fund filed in response to Commission rules.
This material has been filed electronically with the Commission.
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\2\ In years prior to 2013, the Commission reviewed the Postal
Service's reports prepared pursuant to 39 U.S.C. 2803 and 39 U.S.C.
2804 (filed as the Comprehensive Statement by the Postal Service) in
its ACD. However, as it has for the past several years, the
Commission intends to issue a separate notice soliciting comments on
the comprehensive statement and provide its related analysis in a
separate report from the ACD.
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Scope of the filing. The material appended to the narrative
consists of: (1) Domestic product costing material filed on an annual
basis summarized in the Cost and Revenue Analysis (CRA); (2) comparable
international costing material summarized in the International Cost and
Revenue Analysis (ICRA); (3) worksharing-related cost studies; and (4)
billing determinant information for both domestic and international
mail. FY 2018 ACR at 2-3. Inclusion of these four data sets is
consistent with the Postal Service's past ACR practices. As with past
ACRs, the Postal Service has split certain materials into public and
non-public versions. Id. at 3.
``Roadmap'' document. A roadmap to the FY 2018 ACR can be found in
Library Reference USPS-FY18-9. This document provides brief
descriptions of the materials submitted, as well as the flow of inputs
and outputs among them; a discussion of differences in methodology
relative to Commission methodologies in last year's ACD; and a list of
special studies and a discussion of obsolescence, as required by
Commission rule 3050.12. Id. at 3-4.
Methodology. The Postal Service states that it has adhered to the
methodologies historically used by the Commission subject to changes
identified and discussed in Library Reference USPS-FY18-9 and in
prefaces accompanying the appended folders. Id. at 4. The Postal
Service observes that one noteworthy methodological change regarding
product costs was discussed in response to Commission Order No. 3506
and approach for reporting of group incremental cost estimates used by
the Commission in the FY 2017 ACD.\3\ As a result, the Postal Service's
FY 2018 CRA reports group incremental cost estimates when available as
the attributable costs of combinations of products, including for the
market dominant classes. FY 2018 ACR at 5. As a consequence, the costs
labeled as attributable costs in each row of the FY 2018 CRA are not
directly comparable to costs reported with the same label in the CRAs
filed prior to FY 2017. Id. at 6.
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\3\ Id.; see Docket No. RM2016-2, Order Concerning United Parcel
Service, Inc.'s Proposed Changes to Postal Service Costing
Methodologies (UPS Proposals One, Two, and Three), September 9, 2016
(Order No. 3506). Docket No. ACR 2017, Annual Compliance
Determination, March 29, 2018, at 8-10 (FY 2017 ACD).
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Market dominant product-by-product costs, revenues, and volumes.
Comprehensive cost, revenue, and volume data for all market dominant
products of general applicability are shown directly in the FY 2018 CRA
or ICRA. Id. at 8.
The FY 2018 ACR includes a discussion by class of each market
dominant product, including costs, revenues, and volumes, workshare
discounts, and passthroughs responsive to 39 U.S.C. 3652(b), and FY
2018 promotions. Id. at 8-45.
In response to the Commission's FY 2010 ACD directives,\4\ the
Postal Service states that it is providing information regarding: (1)
All operational changes designed to reduce flats costs and the
estimated financial effects of such changes (FY 2018 ACR at 24-32); (2)
all costing methodology improvements made in FY 2018 and the estimated
financial effects of such changes (id. at 32-36); and (3) a statement
summarizing the current year subsidy of the flats product (id. at 35).
In addition, the Postal Service presented its schedule of above-average
price increases for Flats which provides planned price increases for
Flats by the consumer price index times 1.05. Id. at 25.
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\4\ Docket No. ACR2010, Annual Compliance Determination, March
29, 2011, at 106-107 (FY 2010 ACD).
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Market dominant negotiated service agreements. The FY 2018 ACR
presents information on the PHI Acquisitions, Inc. negotiated service
agreement (NSA), the only market dominant NSA in effect in FY 2018. Id.
at 43-44. The agreement was terminated effective June 30, 2018. Id. at
43.
Service performance. The Postal Service notes that the Commission
issued rules on periodic reporting of service performance measurement
and customer satisfaction in FY 2010. Responsive information appears in
Library Reference USPS-FY18-29. Id. at 46.
Customer satisfaction. The FY 2018 ACR discusses the Postal
Service's approach for measuring customer experience and satisfaction;
discusses survey modifications; describes the methodology; presents a
table with survey results; compares the results from FY 2017 to FY
2018; and provides information regarding customer access to postal
services. Id. at 48-65.
Competitive products. The FY 2018 ACR provides costs, revenues, and
volumes for competitive products of general applicability in the FY
2018 CRA or ICRA. For competitive products not of general
applicability, data are provided in non-public Library References USPS-
FY18-NP2 and USPS-FY18-NP27. Id. at 66. The FY 2018 ACR also addresses
the competitive product pricing standards of 39 U.S.C. 3633. Id. at 66-
74. The Postal Service also provides a response to the Commission's
Directive in Order No. 4792 and reports separately the revenue, pieces,
and weight of ECOMPRO pieces for each country in USPS-FY18-NP9.\5\
Additionally, the Postal Service responds to the Commission's Directive
in the FY 2016 ACD requiring it to identify each NSA product that had
no mailpieces shipped under its contract in future ACRs.\6\ This
information is provided in USPS-FY18-NP27 (for domestic NSAs) and USPS-
FY18-NP2 (for international NSAs). FY 2018 ACR at 74.
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\5\ Docket No. CP2018-286, Order Approving Changes in Prices Not
of General Applicability for Certain Inbound Parcel Post (at UPU
Rates), August 23, 2018, at 7 (Order No. 4792).
\6\ Docket No. ACR 2016, Annual Compliance Determination, March
28, 2017, at 83 (FY 2016 ACD).
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Market tests; nonpostal services. The Postal Service discusses the
two competitive market tests conducted during FY 2018 and nonpostal
services. Id. at 75.
III. Procedural Steps
Statutory requirements. Section 3653 of title 39 requires the
Commission to provide interested persons with an opportunity to comment
on the ACR and to appoint an officer of the Commission (Public
Representative) to represent the interests of the general public. The
Commission hereby solicits public comment on the Postal Service's FY
2018 ACR and on whether any rates or fees in effect during FY 2018 (for
products individually or collectively) were not in compliance with
applicable provisions of chapter 36 of title 39 or Commission
regulations promulgated thereunder. Commenters addressing market
dominant products are referred in particular to the applicable
requirements (39 U.S.C. 3622(d) and (e) and 39 U.S.C. 3626); objectives
(39 U.S.C. 3622(b)); and factors (39 U.S.C. 3622(c)). Commenters
addressing competitive products are referred to 39 U.S.C. 3633.
The Commission also invites public comment on the cost coverage
matters the Postal Service addresses in its filing; service performance
results; levels of
[[Page 828]]
customer satisfaction achieved; and such other matters that may be
relevant to the Commission's review.
Access to filing. The Commission has posted the publicly available
portions of the FY 2018 ACR on its website at http://www.prc.gov.
Comment deadlines. Comments by interested persons are due on or
before January 31, 2019. Reply comments are due on or before February
11, 2019. The Commission, upon completion of its review of the FY 2018
ACR, comments, and other data and information submitted in this
proceeding, will issue its ACD.
Public Representative. Mallory L. Smith is designated to serve as
the Public Representative to represent the interests of the general
public in this proceeding. Neither the Public Representative nor any
additional persons assigned to assist her shall participate in or
advise as to any Commission decision in this proceeding other than in
his or her designated capacity.
IV. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket No. ACR2018 to consider
matters raised by the United States Postal Service's FY 2018 Annual
Compliance Report.
2. Pursuant to 39 U.S.C. 505, the Commission appoints Mallory L.
Smith as an officer of the Commission (Public Representative) in this
proceeding to represent the interests of the general public.
3. Comments on the United States Postal Service's FY 2018 Annual
Compliance Report to the Commission are due on or before January 31,
2019.
4. Reply comments are due on or before February 11, 2019.
5. The Secretary shall arrange for publication of this Order in the
Federal Register. Due to its funding lapse, the Federal Register is not
being supported and this Order's publication will be delayed. The delay
in publication in the Federal Register will not affect comment
deadlines.
By the Commission.
Stacy L. Ruble,
Secretary.
[FR Doc. 2019-00396 Filed 1-30-19; 8:45 am]
BILLING CODE 7710-FW-P