[Federal Register Volume 84, Number 98 (Tuesday, May 21, 2019)]
[Proposed Rules]
[Pages 22994-22995]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-10507]
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POSTAL REGULATORY COMMISSION
39 CFR Part 3050
[Docket No. RM2019-4; Order No. 5095]
Periodic Reporting
AGENCY: Postal Regulatory Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Commission is initiating a rulemaking proceeding to
consider changes to analytical principles relating to periodic reports
on Periodicals Outside County Carrier Route Basic Flats. This document
informs the public of the filing, invites public comment, and takes
other administrative steps.
DATES: Comments are due: June 14, 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. Proposal
III. Notice and Comment
IV. Ordering Paragraphs
I. Introduction
Pursuant to Sec. 3050.11, the Commission initiates a rulemaking
proceeding to consider changes to analytical principles related to
periodic reports. In particular, the Commission intends to establish
the methodology for which delivery costs estimate should be used to
calculate the passthroughs for Periodicals Outside County Carrier Route
Basic Flats (Carrier Route Basic).
II. Proposal
Background. On April 22, 2019, MPA--The Association of Magazine
Media (MPA) filed a motion requesting that the Commission amend
specific portions of the FY 2018 Annual Compliance Determination Report
(ACD).\1\ In particular, MPA stated that the passthrough for Carrier
Route Basic was incorrectly calculated, which resulted in errors on
pages 19 and 20 of the FY2018 ACD. Id. MPA presented calculations that
use alternative unit delivery costs, which result in a higher cost
avoidance for Carrier Route Basic and a lower passthrough. Id. at 3. In
its response, the Postal Service stated that it did not disagree with
MPA's methodology.\2\ The Postal Service explained that the delivery
costs between Carrier Route Basic and Machinable Non-Auto Flats should
translate into a non-zero delivery cost avoidance for Carrier Route
Basic. Id.
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\1\ Docket No. ACR2018, Motion of MPA--The Association of
Magazine Media for Correction of FY 2018 Annual Compliance
Determination Report, April 22, 2019 (MPA Motion). See also Annual
Compliance Determination Report, Fiscal Year 2018, April 12, 2019
(FY 2018 ACD).
\2\ Docket No. ACR2018, Response of the United States Postal
Service to MPA Motion Seeking Amendment of the FY 2018 Annual
Compliance Determination, April 29, 2019, at 2 (Postal Service
Response).
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Although there was no disagreement between MPA and the Postal
Service on the methodology, the Commission found that the Postal
Service had previously used a different methodology in prior fiscal
years.\3\ The Commission also found there was no rulemaking to
establish the unit cost avoidance calculation, and the Postal Service
had not explicitly stated why the unit cost estimate it used was the
appropriate methodology. Since the calculations using either
methodology would not materially change the Commission's findings in
the FY 2018 ACD, the Commission denied MPA's motion for correction.
Order No. 5094 at 5. However, the Commission stated that it would
initiate a rulemaking to establish the appropriate methodology for use
in future dockets. Id. at 4-5.
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\3\ See Docket No. ACR2018, Order Denying Motion for Correction,
May 15, 2019, at 3 (Order No. 5094).
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Proposal. The passthrough calculations for Carrier Route Basic are
based on cost avoidances for mail processing and delivery. The Postal
Service uses USPS Marketing Mail proxies for Periodicals delivery
costs. Library Reference USPS-FY18-19 contains the FY 2018 unit
delivery cost workbooks, including a workbook with delivery costs for
flat-shaped mail disaggregated for whether the pieces are delivered in
Flats Sequencing System (FSS) zones.\4\ The ``FSSDeliveryModel18,''
Table 2, contains three estimates for both USPS Marketing Mail Flats
and Carrier Route Flats costs, which are: (1) Delivery costs for pieces
destinating in FSS zones, (2) delivery costs for pieces destinating in
non-FSS zones, and (3) delivery costs for all pieces.
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\4\ Docket No. ACR2018, Library Reference USPS-FY18-19, December
28, 2018, Excel file ``FSSDeliveryModel18.xlsx.''
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The Postal Service and the Commission have historically used
delivery costs for pieces destinating in non-FSS zones to calculate the
cost avoidance and passthrough for Carrier Route Basic. MPA used the
delivery costs for all pieces for the unit cost estimate. MPA Motion at
3. The Postal Services did not disagree with this approach. Postal
Service Response at 2.
To improve the accuracy of the avoidable cost estimates, the
Commission proposes to use the delivery costs for all pieces as the
unit cost estimate used to calculate the cost avoidance and passthrough
for Carrier Route Basic.
Rationale and impact. In the FY 2015 ACR and FY 2015 ACD, when the
proxies were first introduced, it was more appropriate to use the
pieces destinating in non-FSS zones as proxies because separate prices
for FSS Flats were also offered. Only pieces
[[Page 22995]]
destinating to non-FSS zones would be prepared and processed as Carrier
Route or 5-Digit. FSS Flats passthroughs were calculated using pieces
destinating in FSS zones.\5\ In Docket No. R2017-1, the Postal Service
removed FSS Flats.\6\ Since separate FSS Flats prices are no longer
available, Carrier Route and 5-Digit pieces are being prepared and
processed for all zones. With this pricing and operational change, it
would be more accurate to use USPS Marketing Mail Flats and Carrier
Route Flats for all pieces as the proxies for calculating Periodicals
passthroughs.\7\ MPA and the Postal Service both supported this
methodology in Docket No. ACR2018.
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\5\ See, e.g., Docket No. ACR2015, Library Reference USPS-FY15-
3, December 29, 2015, Excel file ``FY15 3 Worksharing Discount
Tables.xlsx,'' tab ``Periodicals Outside County,'' cell ``F9.''
\6\ Docket No. R2017-1, United States Postal Service Notice of
Market Dominant Price Adjustment, October 12, 2016.
\7\ See accompanying Excel file ``2018 Periodicals
Workshare_RM.xlsx,'' tab ``Periodicals Outside County.''
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III. Notice and Comment
The Commission initiates Docket No. RM2019-4 to establish the
methodology for which delivery costs estimate should be used to
calculate the passthroughs for Periodicals Outside County Carrier Route
Basic Flats. Interested persons may submit comments on the Proposal no
later than June 14, 2019. Pursuant to 39 U.S.C. 505, Samuel M. Poole is
designated 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. RM2019-4 to establish the
methodology for which delivery costs estimate should be used to
calculate the passthroughs for Periodicals Outside County Carrier Route
Basic Flats.
2. Comments by interested persons in this proceeding are due no
later than June 14, 2019.
3. Pursuant to 39 U.S.C. 505, the Commission appoints Samuel M.
Poole 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. 2019-10507 Filed 5-20-19; 8:45 am]
BILLING CODE 7710-FW-P