[Federal Register Volume 84, Number 103 (Wednesday, May 29, 2019)]
[Notices]
[Pages 24828-24829]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-11085]
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POSTAL REGULATORY COMMISSION
[Docket No. CP2019-155; Order No. 5102]
Competitive Postal Products
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
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SUMMARY: The Commission is acknowledging a recent filing by the Postal
Service of its intention to change prices not of general applicability
to reflect a range of prices to take effect on a date determined by the
Postal Service Governors. This notice informs the public of the filing,
invites public comment, and takes other administrative steps.
DATES: Comments are due: June 21, 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. Background
III. Proposed Rates
IV. Initial Administrative Actions
V. Ordering Paragraphs
I. Introduction
On May 20, 2019, the Postal Service filed a notice of a proposed
range of prices for Inbound Letter Post Small Packets and Bulky Letters
(E format), and for associated Inbound Registered Service.\1\ The
Postal Service intends for the prices to take effect on a date to be
determined by the Postal Service Governors. Notice at 1. The Postal
Service concurrently filed a notice of filing of non-public library
references.\2\ The Postal Service's Notice requests the Commission's
review and approval of new rates for Inbound E format Letter Post, but
does so in a unique and unprecedented manner. As described further
below, the Postal Service, in lieu of providing specific rates, has
proposed a range of rates for both the piece and weight components of
the proposed pricing structure.
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\1\ Notice of the United States Postal Service of Rates Not of
General Applicability for Inbound E-Format Letter Post, and
Application for Non-Public Treatment, May 20, 2019 (Notice).
\2\ Notice of the United States Postal Service of Filing of Non-
Public Library References, May 20, 2019 (Non-Public LR Notice).
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II. Background
Current Inbound E format Letter Post prices, known as terminal
dues, were set through the Universal Postal Union (UPU). Notice at 2.
The UPU terminal dues system has long been a concern of the Commission,
and the Commission has noted that the current pricing regime results in
noncompensatory terminal dues.\3\ The Commission has described UPU
terminal dues as discriminatory because they are not equivalent to
domestic postage rates in the destination country. Order No. 4980 at 3.
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\3\ Docket No. MC2019-17, Order Conditionally Approving
Transfer, January 9, 2019, at 3 (Order No. 4980).
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On August 23, 2018, President Donald J. Trump issued a presidential
memorandum to the Postmaster General and the Chairman of the
Commission, among others, entitled ``Modernizing the Monetary
Reimbursement Model for the Delivery of Goods Through the International
Postal System and Enhancing the Security and Safety of International
Mail.'' \4\ The Postal Service states that the Presidential Memorandum
identifies economic distortion as a result of foreign merchants
receiving the benefit of lower distribution costs in the United States
compared to domestic vendors. Notice at 3.
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\4\ Presidential Memorandum for the Secretary of State,
Secretary of the Treasury, Secretary of Homeland Security,
Postmaster General, and Chairman of the Postal Regulatory
Commission, August 23, 2018 (Presidential Memorandum), available at:
https://www.whitehouse.gov/presidential-actions/presidential-memorandum-secretary-state-secretary-treasury-secretary-homeland-security-postmaster-general-chairman-postal-regulatory-commission/.
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Consistent with the policy objectives outlined in the Presidential
Memorandum, the Secretary of State gave notice to the UPU on October
17, 2018, that the United States would withdraw as a member country,
effective one year from the announcement.\5\ The White House Press
Secretary issued a statement indicating that the President concurred
with the recommendation from the Department of State that the United
States should adopt self-declared rates for terminal dues as soon as
practical, but no later than January 1, 2020.\6\
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\5\ See Statement from the Press Secretary, October 17, 2018,
available at: https://www.whitehouse.gov/briefings-statements/statement-press-secretary-38/.
\6\ Id.; see Order No. 4980 at 4.
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Since issuing its notice to withdraw from the UPU, the United
States has continued to negotiate with other UPU member countries to
``reach a mutually acceptable solution to satisfy the aims of the
Presidential Memorandum.'' Notice at 5. The Postal Service states that
because it does not yet know the result of current State Department
negotiations on achieving ``the President's stated goal to remain
within the UPU following elimination of the economic distortion'' in
the current system, it posits that a range of rates for E format items
that accommodates those negotiations is ``in the best interests of the
United States and the Postal Service.'' Id. The Postal Service states
that this range allows the Postal Service to preserve flexibility,
enabling it to institute rates for E format Letter Post whether the
United States is in or out of the UPU. Id.
In Order No. 4980, the Commission conditionally approved the
transfer of Inbound E format Letter Post items from the market dominant
to competitive products list. Order No. 4980 at 23.
III. Proposed Rates
The Postal Service's Notice includes an application for non-public
treatment of materials filed under seal (Attachment 1), a Statement of
Explanation and Justification for the proposed rate range (Attachment
2), and a certification of prices (Attachment 3). Notice, Attachments
1-3. The Postal Service filed the proposed rates and underlying
workpapers under seal in this docket. See Notice at 2. The Postal
Service states that the price range and workpapers include
``commercially sensitive information, such as price, volume, cost, and
revenue data, certain non-published rates, negotiated contract data,
and underlying calculations.'' Non-Public LR Notice at 2. The Postal
[[Page 24829]]
Service further explains its request for non-public treatment of the
price range in its application for non-public treatment, filed pursuant
to 39 CFR 3007. Notice, Attachment 1 at 1.
The Postal Service states that the proposed range of prices would
conform to the requirements for competitive products under 39 U.S.C.
3633. Notice at 12. The Postal Service states that the proposed prices
cover attributable costs, avoid cross-subsidization, and do not impede
competitive products' collective ability to cover the appropriate share
of institutional costs. Id.
The Postal Service states that the proposed prices will be
available only to postal operators, citing fundamental differences
between postal operators and private carriers. Id. at 13. The Postal
Service states that the risk of ``cream-skimming'' and operational
concerns dictate that the rates be not of general applicability, but
notes that private carriers can receive similar service through
negotiated service agreements. Id. at 14.
The Postal Service addresses concerns regarding Private Express
Statutes (PES). Id. at 15. The Postal Service states that most Inbound
E format Letter Post containing letter content would fall under
exceptions for letters relating to goods, or suspensions for certain
advertising. Id. The Postal Service states that absent exceptions or
suspensions, proposed maximum rates exceed the price test even at the
lowest rate increment, and the minimum rates satisfy the price test at
the average weight per piece. Id. at 15-16. The Postal Service states
that for minimum rates evaluated at individual weight steps, whose
prices do not alone satisfy the price test, the total postage paid
(including foreign postal operators' costs for legs 1 and 2), would
likely exceed the PES price test. Id. at 17.
The Postal Service states that in addition to satisfying all
statutory requirements, the proposed prices are consistent with the
policies and reforms outlined in the Presidential Memorandum. Id. at
18. The Postal Service states that the proposal fully reimburses the
Postal Service for its costs, avoids a preference for foreign postal
operators over private carriers, and avoids a preference for foreign
mailers over domestic mailers. Id. at 18-19. Although Inbound E format
Letter Post prices would not be identical to domestic retail and
commercial rates, the proposed range is justified under domestic
equivalent principles. Id. at 19. The Postal Service notes one
particular exception. The Postal Service states that E format volume
dispatched by countries in UPU Group IV will be subject to lower
prices, of which the Postal Service will provide notice at a later
time. Id. at 10-11. The Postal Service states that the proposal
achieves rate ``parity'' and would eliminate the economic distortion
identified in the Presidential Memorandum. Id. at 19.
IV. Initial Administrative Actions
The Commission establishes Docket No. CP2019-155 to consider the
Postal Service's Notice. Interested persons may express views and offer
comments on whether the planned changes are consistent with 39 U.S.C.
3632 and 3633 and 39 CFR part 3015. The Commission also invites
comments on whether the proposed prices are consistent with the
policies outlined in the Presidential Memorandum.\7\ Comments are due
no later than June 21, 2019. Pursuant to 39 U.S.C. 505, Katalin K.
Clendenin is appointed to serve as Public Representative to represent
the interests of the general public in this docket.
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\7\ See Order No. 4980 at 20.
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V. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket No. CP2019-155 to provide
interested persons an opportunity to express views and offer comments
on whether the planned changes are consistent with 39 U.S.C. 3632 and
3633 and 39 CFR part 3015.
2. The Commission also invites interested persons to express views
and offer comments on whether the proposed prices are consistent with
the policies outlined in the Presidential Memorandum.
3. Comments are due no later than June 21, 2019.
4. 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.
5. The Secretary shall arrange for publication of this order in the
Federal Register.
By the Commission.
Stacy L. Ruble,
Secretary.
[FR Doc. 2019-11085 Filed 5-28-19; 8:45 am]
BILLING CODE 7710-FW-P