[Federal Register Volume 85, Number 98 (Wednesday, May 20, 2020)]
[Proposed Rules]
[Page 30671]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10245]



[[Page 30671]]

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POSTAL SERVICE

39 CFR Part 501


Authorization To Manufacture and Distribute Postage Evidencing 
Systems

AGENCY: Postal ServiceTM.

ACTION: Proposed rule.

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SUMMARY: The Postal Service proposes to withdraw all authorizations to 
distribute Postage Evidencing Systems (PES) that are not producing 
compliant Intelligent Mail Indicia (IMI) on June 30th, 2024. IMI 
compliant PES are defined in the IMI Performance Criteria (IMIPC) and 
produce only IMI-Minimum (IMI-MIN), IMI-Standard (IMI-STD), and IMI-
Maximum (IMI-MAX) indicia constructs (as stated in the Performance 
Criteria). All PES that are not IMIPC compliant, also referenced as 
Phase VI-IBI and Phase VII-PC Postage, will become Decertified PES on 
that date, and the Postal Service will withdraw the provider's 
authority to distribute Decertified PES. Postage indicia printed by 
Decertified PES will no longer be considered valid postage one hundred 
and eighty (180) days after June 30th, 2024.

DATES: Comments must be received on or before June 19, 2020.

ADDRESSES: Mail or deliver written comments to: Director, Commercial 
Payment, 475 L'Enfant Plaza SW, Room 3500, Washington, DC 20260. 
Emailed and faxed comments will not be accepted. You may inspect and 
photocopy all written comments, by appointment only, at the USPS 
Headquarter Library, 475 L'Enfant Plaza SW, 11th Floor North, 
Washington, DC 20260. These records are available for review on Monday 
through Friday, 9 a.m. to 4 p.m., by calling (202) 268-2904. All 
submitted comments and attachments are part of the public record and 
subject to disclosure. Do not enclose any material in your comments 
that you consider to be confidential or inappropriate for public 
disclosure.

FOR FURTHER INFORMATION CONTACT: Ezana Dessie, Principal Business 
Systems Analyst, [email protected], 202-268-5686.

SUPPLEMENTARY INFORMATION: The USPS (through regulations) manages the 
authorization, manufacturing, distribution, and decertification of 
Postage Evidencing Systems (PES); in addition, it establishes the PES 
Performance Criteria (PC). In 2000, the USPS implemented the first PES 
PC using the Information Based Indicia Program (IBIP); the IBIP started 
the movement from physical to digital PES transition. On February 4th, 
2013, the USPS published an updated PES PC, the Intelligent Mail 
Indicia Performance Criteria (IMI-PC). Since its publication, the IMI-
PC has undergone multiple updates; the current version in use is IMI-PC 
1.5C, which was released on February 19th, 2019.
    The Phase VI and Phase VII meters rely on the IBIP, which is an 
indicia format established over 19 years ago. Phase VI meters (both 
Closed and Open) are postage systems set exclusively via a modem or the 
internet, where a 2D barcode utilizing National Institute of Standards 
and Technology (NIST)-certified digital signatures provides integrity 
and authenticity to the postage evidence imprint. The Phase VII meters 
are postage systems wherein postage transactions created via Postal 
Security Devices (PSD) are approved under the IBIP and located within 
the Provider's infrastructure and the indicia; postage paid evidence is 
delivered via the internet to the remote user.
    Phase VI and Phase VII PES no longer meet the USPS PES requirements 
adequately. The decertification of the Phase VI and Phase VII PES will 
allow for the full implementation of Phase VIII-IMI PES, in which both 
PC Postage and physical PES are validated under the current edition of 
the IMI-PC. The implementation of the IMI-PC was announced in the 
Federal Register on February 4th, 2013 (Vol. 78, No. 23, pages 7820-
7821). In that notice, the Postal Service set forth an implementation 
schedule which stated new PES submissions after October 1st, 2013 must 
adhere to the then-currently effective IM-PC.
    The Postal Service expected providers to update their systems to 
adhere to the IMI-PC within a few years after the publication of IMI-
PC. However, little progress was made since 2013, until recently. Some 
providers did make great strides in IMI-PC compliance over the past 
three years, while others are still in the initial stage of their 
compliance work. This disparity has led to unequal PES compliance 
management/enforcement and in some instances afforded providers an 
unanticipated opportunity to market their non-compliant PES as a 
customer selling point.
    In recent months, Commercial Payment has engaged with the providers 
to understand their short-term and long-term strategies to fully 
implement PESs that are compliant with the IMI-PC as well as to review 
their plans for phasing out non-compliant PES. After assessing the 
providers' input, weighing the USPS business/service needs, and 
determining potential impact to our customers, the Postal Service 
believes it has struck a balance between these competing objectives by 
setting June 30th, 2024 as the decertification date for non-IMI-PC-
complaint PESs. This target date allows the providers to plan and 
execute their PES decertification for Phase VI and Phase VII PES 
(meters) with minimal impact to customers as they transition IBI PC 
Postage PES to IMI-PC compliant PES.

List of Subjects in 39 CFR Part 501

    Administrative practice and procedure, Postal Service.

    For the reasons stated in the preamble, the Postal Service proposes 
to amend 39 CFR part 501 as follows:

PART 501--[AMENDED]

0
1. The authority citation for part 501 continues to read as follows:

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 410, 
2601, 2605; Inspector General Act of 1978, as amended (Pub. L. 95-
452, as amended); 5 U.S.C. App. 3.

0
2. Amend Sec.  501.7 by revising paragraph (c) to read as follows:


Sec.  501.7  Postage Evidencing System requirements.

* * * * *
    (c) The provider must ensure that any matter printed by a Postage 
Evidencing System, whether within the boundaries of the indicia or 
outside the clear zone as defined in DMM 604.4.0 and the Intelligent 
Mail Performance Criteria (IMI-PC), is:
* * * * *
0
3. Amend Sec.  501.20 by revising paragraph (b) to read as follows:


Sec.  501.20   Discontinued Postage Evidencing Indicia.

* * * * *
    (b) Effective June 30, 2024, all Postage Evidencing Systems will be 
required to produce Intelligent Mail Indicia (IMI) for evidence of pre-
paid postage. Non-IMI indicia, which are not compliant with the then-
current version of the IMI-PC, will be decertified and may not be used 
as a valid form of postage evidence. These decertified indicia may not 
be recognized as valid postage after December 27, 2024.

Joshua J. Hofer,
Attorney, Federal Compliance.
[FR Doc. 2020-10245 Filed 5-19-20; 8:45 am]
BILLING CODE 7710-12-P