[Federal Register Volume 84, Number 22 (Friday, February 1, 2019)]
[Rules and Regulations]
[Pages 974-976]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-00398]
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POSTAL REGULATORY COMMISSION
39 CFR Part 3035
[Docket No. RM2018-12; Order No. 4973]
Amendments to Market Test Rules
AGENCY: Postal Regulatory Commission.
ACTION: Final rule.
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SUMMARY: The Commission is adopting final rules amending the
Commission's regulations governing market tests of experimental
products. The final rules revise the method for calculating applicable
market test revenue limitations and clarify the process for filing a
request to add a non-experimental product or price category based on an
experimental product to the market dominant or competitive product
list. For additional information, Order No. 4973 can be accessed
electronically through the Commission's website at https://www.prc.gov.
DATES: Effective: March 4, 2019.
FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at
202-789-6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Relevant Statutory Requirements
II. Basis and Purpose of Rule Change
III. Final Rule
I. Relevant Statutory Requirements
Section 3641 of title 39 of the United States Code authorizes the
Postal Service to conduct market tests of experimental products. 39
U.S.C. 3641. Generally, each product offered by the Postal Service must
comply with section 3622 (governing market dominant products) or
section 3633 (governing competitive products), as well as section 3642
(governing changes to the lists of market dominant and competitive
products) and applicable regulations. Experimental products, however,
are not subject to these requirements. 39 U.S.C. 3641(a)(2).
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The Postal Service may decide to add a non-experimental product or
price category to the product list based on its performance or other
factors. Accordingly, the regulations in this part set forth procedures
for filing a request to add a current or former experimental product to
the market dominant or competitive product list in non-experimental
status, that is--subject to the applicable requirements of sections
3622 or 3633, 3642, and the applicable regulations promulgated
thereunder.\1\
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\1\ See Docket No. RM2013-5, Order Adopting Final Rules for
Market Tests of Experimental Products, August 28, 2014, at 24 (Order
No. 2173).
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In accordance with its specific authority to regulate market tests
under section 3641 and its general authority under section 503 to
promulgate regulations and establish procedures, the Commission
initiated a rulemaking proceeding to consider amendments to the
existing market test regulations that would better reflect current
practice and improve transparency and accountability.
II. Basis and Purpose of Rule Change
The final rules amend existing market test rules in 39 CFR part
3035 in two areas. First, the final rules revise the method for
calculating applicable revenue limitations for market tests appearing
in Sec. Sec. 3035.15 and 3035.16 to be consistent with the current
level of precision used in calculating the annual limitation on the
percentage change in rates for market dominant products (price cap).
Second, the final rules clarify the process under Sec. 3035.18 for
filing a request to add a non-experimental product or price category
based on an experimental product to the market dominant or competitive
product list. The final rules also emphasize the necessity of receiving
specific detailed information in such requests.
III. Final Rule
The final rules amend existing Sec. Sec. 3035.15, 3035.16, and
3035.18. The final rules replace ``214.5'' with ``214.463'' in existing
Sec. 3035.15(d) and (e) as well as Sec. 3035.16(c) and (d). The final
rules change the heading of existing Sec. 3035.18 to ``Request to add
a non-experimental product or price category based on an experimental
product to the product list.'' Final Sec. 3035.18(a) replaces the word
``permanent'' in existing Sec. 3035.18 with general language about
adding a non-experimental product or price category based on an
experimental product to the market dominant or competitive product
list. Final Sec. 3035.18(b) identifies instances when the Postal
Service must file a request compliant with Sec. 3035.18. Final Sec.
3035.18(c) lists the information that the Postal Service must include
in a request to add a non-experimental product or price category based
on an experimental product to the market dominant or competitive
product list.
Final Sec. 3035.18(d) contains separate notice requirements for a
request filed under Sec. 3035.18 that seeks to continue services
provided under a market test immediately when the market test ends.
Final Sec. 3035.18(d) also specifies a different advance notice
requirement for competitive NSAs (45 days) as compared to other
products (60 days).
Existing Sec. 3035.18(c) is moved to final Sec. 3035.18(e), but
replaces the phrase ``its request to make an experimental product
permanent'' with ``a request filed under this section'' and adds ``if
the market test proceeding's docket is an active case before the
Commission'' at the end of the first sentence.
List of Subjects in 39 CFR Part 3035
Administrative practice and procedure, Postal Service.
For the reasons discussed in the preamble, the Commission amends 39
CFR part 3035 as follows:
PART 3035--RULES FOR MARKET TESTS OF EXPERIMENTAL PRODUCTS
0
1. The authority citation for part 3035 is revised to read as follows:
Authority: 39 U.S.C. 503; 3641.
0
2. Amend Sec. 3035.15 by revising paragraphs (d) and (e) to read as
follows:
Sec. 3035.15 Dollar amount limitation.
* * * * *
(d) The calculation of the $10 Million Adjusted Limitation involves
the following steps. First, a simple average CPI-U index was calculated
for fiscal year 2008 by summing the monthly CPI-U values from October
2007 through September 2008 and dividing the sum by 12 (Base Average).
The resulting Base Average is 214.463. Then, a second simple average
CPI-U index is similarly calculated for each subsequent fiscal year by
summing the 12 monthly CPI-U values for the previous fiscal year and
dividing the sum by 12 (Recent Average). Finally, the annual limitation
for the current fiscal year is calculated by multiplying $10,000,000 by
the Recent Average divided by 214.463. The result is expressed as a
number, rounded to the nearest dollar.
(e) The formula for calculating the $10 Million Adjusted Limitation
is as follows: $10 Million Adjusted Limitation = $10,000,000 * (Recent
Average/214.463).
0
3. Amend Sec. 3035.16 by revising paragraphs (c) and (d) to read as
follows:
Sec. 3035.16 Exemption from dollar amount limitation.
* * * * *
(c) The calculation of the $50 Million Adjusted Limitation involves
the following steps. First, a simple average CPI-U index was calculated
for fiscal year 2008 by summing the monthly CPI-U values from October
2007 through September 2008 and dividing the sum by 12 (Base Average).
The resulting Base Average is 214.463. Then, a second simple average
CPI-U index is similarly calculated for each subsequent fiscal year by
summing the 12 monthly CPI-U values for the previous fiscal year and
dividing the sum by 12 (Recent Average). Finally, the annual limitation
for the current fiscal year is calculated by multiplying $50,000,000 by
the Recent Average divided by 214.463. The result is expressed as a
number, rounded to the nearest dollar.
(d) The formula for calculating the $50 Million Adjusted Limitation
is as follows: $50 Million Adjusted Limitation = $50,000,000 * (Recent
Average/214.463).
* * * * *
0
4. Revise Sec. 3035.18 to read as follows:
Sec. 3035.18 Request to add a non-experimental product or price
category based on an experimental product to the product list.
(a) If the Postal Service seeks to add a non-experimental product
or price category based on a former or current experimental product to
the market dominant or competitive product list, the Postal Service
shall file a request, pursuant to 39 U.S.C. 3642 and part 3020, subpart
B of this chapter, to add a non-experimental product or price category
to the applicable product list.
(b) The Postal Service shall comply with the requirements specified
in paragraphs (c) through (e) of this section of this section if the
proposed non-experimental product or price category:
(1) Offers the same (or similar) service as a former or current
experimental product;
(2) Has the same distinct cost or market characteristic as a former
or current experimental product; or
(3) Uses (or is based on) data or assumptions from a former or
current market test proceeding.
(c) A request filed under this section shall:
(1) Identify the market test and docket number that the proposed
non-
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experimental product or price category is based on;
(2) Explain the relationship between the proposed non-experimental
product or price category and market test or experimental product;
(3) Identify any assumptions from the market test that the request
uses or is based on;
(4) Include all data from data collection reports filed during the
market test in the financial model supporting the request, or
separately identify and explain any differences between the data
collection reports filed during the market test and the data used in
the financial model supporting the request; and
(5) Quantify the product specific costs associated with the
development of the market test; that is, costs incurred before the
market test was implemented.
(d) The Postal Service must provide advance notice of a request
filed under this section.
(1)(i) The requirements in this paragraph (d)(1) apply if the
Postal Service seeks to add a non-experimental product or price
category based on an experimental product to the competitive product
list as an NSA. If the Postal Service seeks to continue the services
provided under a market test immediately when the market test ends with
no interruption in service, the Postal Service must file a request
under this section at least 45 days before:
(A) The market test expires (including any extension period
granted); or
(B) The market test is expected to exceed any authorized limitation
specified in Sec. Sec. 3035.15 and 3035.16 during any fiscal year,
whichever is earlier.
(ii) In all other instances, the Postal Service must file a request
under this section at least 45 days before the requested date for the
Commission's decision.
(2)(i) The requirements in this paragraph (d)(2) apply if the
Postal Service seeks to add a non-experimental product or price
category based on an experimental product to the market dominant or
competitive product list as a product other than a competitive NSA. If
the Postal Service seeks to continue the services provided under a
market test immediately when the market test ends with no interruption
in service, the Postal Service must file a request under this section
at least 60 days before:
(A) The market test expires (including any extension period
granted); or
(B) The market test is expected to exceed any authorized limitation
specified in Sec. Sec. 3035.15 and 3035.16 during any fiscal year,
whichever is earlier.
(ii) In all other instances, the Postal Service must file a request
under this section at least 60 days before the requested date for the
Commission's decision.
(e) The Postal Service shall also file a notice of a request filed
under this section in the market test proceeding's docket if the market
test proceeding's docket is an active case before the Commission. This
notice shall include the applicable docket number(s) for the proceeding
evaluating the request.
By the Commission.
Stacy L. Ruble,
Secretary.
[FR Doc. 2019-00398 Filed 1-31-19; 8:45 am]
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