[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).

[[Page 975]]

    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-

[[Page 976]]

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]
 BILLING CODE 7710-FW-P