[Federal Register Volume 86, Number 222 (Monday, November 22, 2021)]
[Notices]
[Pages 66348-66349]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-25324]


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POSTAL REGULATORY COMMISSION

[Docket No. MT2022-1; Order No. 6038]


Market Test of Experimental Product

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is recognizing a recently filed Postal Service 
proposal to conduct a market test of an experimental product called 
Extended Mail Forwarding. This notice informs the public of the filing, 
invites public comment, and takes other administrative steps.

DATES: Comments are due: December 7, 2021.

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. Compliance With Legal Requirements
IV. Data Collection
V. Notice of Commission Action
VI. Ordering Paragraphs

I. Introduction

    In accordance with 39 U.S.C. 3641 and 39 CFR part 3045, the Postal 
Service filed notice of its intent to conduct a market test of an 
experimental product called USPS Connect Local Mail.\1\ The Postal 
Service states that currently, when business mailers who send documents 
locally with regular frequency wish to send documents for same-day or 
next-day arrival, they are directed to use a variety of services that 
were designed for end-to-end mailing over long distances, and are 
priced accordingly. Notice at 1. The Postal Service asserts that USPS 
Connect Local Mail is designed as an economical alternative for these 
mailers. Id. at 1-2. The Postal Service ``intends for the market test 
to run for two full years beginning on January 9, 2022,'' although it 
explains that it ``may decide to seek permanent product status earlier, 
or alternatively [it] may seek authority for an additional year of 
testing if more time is needed to determine the feasibility or 
desirability of the product.'' Id. at 3.
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    \1\ United States Postal Service Notice of Market Test of 
Experimental Product--USPS Connect Local Mail, November 10, 2021 
(Notice).
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II. Background

    On November 10, 2021, the Postal Service filed the Notice proposing 
the USPS Connect Local Mail market test. The Postal Service asserts 
that ``local document delivery could benefit from increased 
competition, and that economical local document delivery is a market 
that is currently underserved by USPS.'' Notice at 1. As such, 
according to the Postal Service, USPS Connect Local Mail (as well as 
its planned package-focused counterpart, USPS Connect Local) \2\ is 
designed to offer improved access to the Postal Service network for 
local mailers and will leverage the Postal Service's current ``last-
mile infrastructure to create

[[Page 66349]]

economical new solutions for customers.'' Notice at 2.
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    \2\ In a separate proceeding to adjust Competitive product 
rates, Docket No. CP2022-22, the Postal Service has proposed to add 
``USPS Connect Local'' as a new price category under the existing 
Parcel Select product. Docket No. CP2022-22, USPS Notice of Changes 
in Rates of General Applicability for Competitive Products, November 
10, 2021, at 2-3. Any comments on the Postal Service's plans to add 
this new Competitive product price category should be filed in 
Docket No. CP2022-22.
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    The Postal Service states that USPS Connect Local Mail will be 
available at Destination Delivery Units or by carrier pick-up in line-
of travel. Id. at 2. It also states that it will offer same-day or 
next-day delivery, six days per week, with customers receiving same-day 
or next-day delivery based on whether they've entered their mail within 
the Critical Entry Time. Id. The Postal Service adds that it will offer 
tracking services for USPS Connect Local Mail. Id. According to the 
Postal Service, ``[d]ocuments mailed using this service must be paper-
based and may contain personal information.'' Id. at 3.
    The Postal Service plans to offer USPS Connect Local Mail at $2.95 
for a Letter or Flat size mailpiece with a weight up to 13 ounces. Id. 
at 2. It will allow customers to pay for this service using Click-N-
Ship or through a Postal Service application programming interface. Id. 
at 3. According to the Postal Service, USPS Connect Local Mail will 
cover its attributable costs, which it estimates to be $2.03 per piece 
based on the volume variable cost of Priority Mail flats, modified to 
reflect differences in mail processing, transportation, and packaging 
costs. Id. at 2-3.
    The Postal Service states that USPS Connect Local Mail will be 
tested nationwide with a phased rollout. Id. at 3.

III. Compliance With Legal Requirements

    The Postal Service asserts that the proposed market test meets the 
requirements of 39 U.S.C. 3641 and 39 CFR part 3045. First, the Postal 
Service explains that, ``from the viewpoint of mail users, USPS Connect 
Local Mail is significantly different from all products offered by the 
Postal Service within the last two years'' as required by 39 U.S.C. 
3641(b)(1). Notice at 3. The Postal Service states that it ``does not 
currently offer an expedited First-Class Mail product for local mailers 
to quickly and cost effectively mail local personalized 
correspondence,'' nor does First-Class Mail include tracking or free 
packaging. Id. at 3-4. According to the Postal Service, although 
Priority Mail Express and Priority Mail may be used to deliver local 
mail, they are ``intended for nationwide, end-to-end shipping and their 
pricing reflects these higher costs.'' Id. at 4. Thus, it asserts, USPS 
Connect Local Mail is significantly different from the other services 
it offers. Id.
    Second, the Postal Service asserts that USPS Connect Local Mail 
``will not create an unfair or otherwise inappropriate competitive 
advantage for the Postal Service or any mailer,'' as set out in 39 
U.S.C. 3641(b)(2), because it was ``designed to increase small business 
access to the USPS network and . . . leverages the Postal Service's 
existing delivery network to address a need for locally-focused small 
businesses,'' thus ``offer[ing] a low-priced alternative in a market 
that is arguably underserved by USPS.'' Id.
    Third, the Postal Service states that USPS Connect Local Mail is 
properly categorized as market dominant as required by 39 U.S.C. 
3641(b)(3) given that it ``is not structuring USPS Connect Local Mail 
to meet any of the exceptions or suspensions to the Private Express 
Statutes.'' Id.

IV. Data Collection

    To better understand the results of the market test, the Postal 
Service asserts that it will collect the following data on a quarterly 
basis by district for USPS Connect Local Mail: Volume of mailpieces, 
number of customers, and revenue.\3\ The Postal Service also states 
that it will collect data on the attributable costs of USPS Connect 
Local Mail, including administrative costs of the test. Notice at 5.
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    \3\ Id. at 5. The Postal Service states that, although 
``[v]olumes and revenues for USPS Connect Local Mail are difficult 
to predict . . . it is possible that the Postal Service may 
eventually need to seek a waiver of the annual statutory limitation 
of $11,860,140.'' Id. It explains that, should the revenue approach 
this amount, the Postal Service ``will furnish the appropriate 
notice to the Commission and submit an application for exemption 
from the cap under 39 U.S.C. 3641(e)(2) in a timely manner.'' Id.
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V. Notice of Commission Action

    The Commission establishes Docket No. MT2022-1 to consider matters 
raised by the Notice. The Commission invites comments on whether the 
Postal Service's filing is consistent with the requirements of 39 
U.S.C. 3641 and 39 CFR part 3045. Comments are due no later than 
December 7, 2021. The filing can be accessed via the Commission's 
website (http://www.prc.gov).
    The Commission appoints Mallory L. Smith to serve as an officer of 
the Commission to represent the interests of the general public in 
these proceedings (Public Representative).

VI. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket No. MT2022-1 to consider the 
matters raised by the Notice.
    2. Pursuant to 39 U.S.C. 505, Mallory L. Smith is appointed to 
serve as an officer of the Commission to represent the interests of the 
general public in these proceedings (Public Representative).
    3. Comments are due no later than December 7, 2021.
    4. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2021-25324 Filed 11-19-21; 8:45 am]
BILLING CODE 7710-FW-P