[Federal Register Volume 87, Number 176 (Tuesday, September 13, 2022)]
[Notices]
[Pages 56094-56096]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-19707]


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POSTAL REGULATORY COMMISSION

[Docket No. RM2017-1/RM2022-2; Order No. 6269]


Competitive Postal Products

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is invites comments in this proceeding related 
to its analysis of subsequent events that impact the findings of a 
Federal Trade Commission Report. This document informs the public of 
this proceeding, invites public comment, and takes other administrative 
steps.

DATES: Comments are due: September 21, 2022.

ADDRESSES: For additional information, Order No. 6269 can be accessed 
electronically through the Commission's website at https://www.prc.gov. 
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

[[Page 56095]]

III. Events Subsequent Events to the FTC Report
IV. Invitation for Comments
V. Ordering Paragraphs

I. Introduction

    As part of its enactment of the Postal Accountability and 
Enhancement Act (PAEA), Congress sought to determine whether the Postal 
Service's competitive products enjoyed any legal advantages over 
private companies providing similar products.\1\ Uncodified section 703 
of the PAEA directed the Federal Trade Commission (FTC) to prepare a 
report identifying federal and state laws that apply differently to the 
Postal Service's competitive products than to similar products offered 
by private competitors.\2\ The FTC was required to include any 
recommendations concerning how to end any such legal differences that 
it deemed appropriate and, in the interim, to account for the net 
economic effect resulting from such differences. PAEA section 703(b). 
Additionally, section 703 directed the Commission, when revising 
regulations under 39 U.S.C. 3633, to consider the FTC's recommendations 
as well as subsequent events that affect the continuing validity of the 
FTC's net economic effect finding. Id. section 703(d).
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    \1\ See Postal Accountability and Enhancement Act (PAEA), Public 
Law 109-435, title VII, section 703, 120 Stat. 3198, 3244 (2006); 
see also S. Rep. No. 108-318 at 29 (2004).
    \2\ PAEA section 703(a). Section 703 was not codified and is 
reproduced in the notes of 39 U.S.C.A. 3633. See also Federal Trade 
Commission, Accounting for Laws that Apply Differently to the United 
States Postal Service and its Private Competitors, December 2007 
(FTC Report), available at https://www.ftc.gov/sites/default/files/documents/reports/accounting-laws-apply-differently-united-statespostal-service-and-its-private-competitors-report/080116postal.
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II. Background

    The FTC issued its report in December 2007, which considered both 
the implicit subsidies enjoyed by, and legal constraints imposed on, 
the Postal Service's Competitive products due to the Postal Service's 
unique legal status.\3\ In Chapter IV of its report, the FTC completed 
its net economic effect analysis by specifically identifying those 
implicit subsides and legal constraints that could be quantified in 
order to calculate any impact on the Postal Service.\4\ The FTC 
calculated the cost of the quantifiable legal constraints and the value 
of the implicit subsidies and concluded that the Postal Service's 
unique legal status placed it at a net competitive disadvantage in 
offering Competitive products relative to private competitors. Id. at 
64.
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    \3\ FTC Report at 55-77. In its review of the Postal Service's 
unique legal status, the FTC analyzed laws applicable to the Postal 
Service due to its status as a governmental entity as well as those 
disadvantages imposed on and advantages allowed by the PAEA. Id.
    \4\ Id. at 64 n.287. The FTC Report discussed additional 
implicit subsidies and legal constraints beyond those listed in its 
net economic effect analysis, but because the additional subsidies 
and constraints could either not be quantified or the effect on the 
Postal Service was unclear, the FTC did not include them as part of 
its final analysis. See id. at 1, 50, 54, 56, 64, 89.
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    On February 8, 2018, as part of the Commission's second 5-year 
review of the institutional cost contribution requirement for 
Competitive products, the Commission issued a Notice of Proposed 
Rulemaking, proposing revisions to its regulations pursuant to 39 
U.S.C. 3633(a)(3) and (b) and completed an analysis pursuant to section 
703(d) of the PAEA.\5\
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    \5\ See Order No. 4402 at 54-68; see also Docket No. RM2017-1, 
Revised Notice of Proposed Rulemaking, August 7, 2018, at 57-58 
(Order No. 4742); Docket No. RM2017-1, Order Adopting Final Rules 
Relating to the Institutional Cost Contribution Requirement for 
Competitive Products, January 3, 2019, at 170-187 (Order No. 4963).
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    The Commission found that there was only ``one law linked to a 
separately delineated element within the FTC's calculation that has 
been amended, thereby constituting an event subsequent to the FTC 
Report's issuance that affects the validity of the estimate of the net 
economic effect.'' Id. at 63. The identified law was associated with 
international air transportation rate regulation and had been amended 
after the original FTC Report's issuance.\6\ The Commission removed the 
cost of the international air transportation rate regulation constraint 
from the total cost of the legal constraints and updated the FTC's 
calculation. See Order No. 4402 at 64. The Commission found that 
although the removal of the international air transportation rate 
regulation constraint altered the overall estimate of the net economic 
effect, that subsequent event did not undermine the FTC's overall 
finding of a net economic disadvantage and that the FTC's finding 
remained valid. Id. Additionally, the Commission performed a 
supplemental analysis by updating the high-end costs associated with 
both the implicit subsidies and legal constraints based on current 
competitive product revenue at the time Order No. 4402 was issued.
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    \6\ Id. at 63-64. In the FTC Report, the FTC explained that the 
Department of Transportation's regulation of international mail air 
transport rates increased Postal Service costs because it was not 
permitted to independently negotiate the rates on the free market as 
private companies were. FTC Report at 44, 56. In 2008, Congress 
eliminated the Department of Transportation's authority to regulate 
the prices paid by the Postal Service for air transport of 
international mail. See Public Law 110-405, 122 Stat. 4287 (2008); 
see also FTC Report at 44-45.
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    Subsequently, the United States Court of Appeals for the District 
of Columbia Circuit remanded Order No. 4963 to the Commission for 
further consideration of particular issues identified by the court 
consistent with the opinion issued in United Parcel Serv., Inc. v. 
Postal Reg. Comm'n, 955 F.3d 1038 (D.C. Cir. 2020). On November 18, 
2021, the Commission issued Order No. 6043, which not only addressed 
the issues identified by the court, but also initiated the Commission's 
third 5-year review of the institutional cost contribution requirement 
for Competitive products.\7\ Docket Nos. RM2017-1 and RM2022-2 remain 
pending before the Commission.
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    \7\ Supplemental Notice of Proposed Rulemaking and Order 
Initiating the Third Review of the Institutional Cost Contribution 
Requirement for Competitive Products, November 18, 2021, at 130 
(Order No. 6043).
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III. Events Subsequent to the FTC Report

    After the issuance of Order No. 6043 and the expiration of the 
comment period established therein, the Postal Service Reform Act of 
2022 (PSRA) was enacted on April 6, 2022.\8\ Among other things, the 
PSRA requires Postal Service Health Benefits plans to participate in 
Medicare Part D, which would allow those plans to receive subsidies 
related to prescription drugs. See 5 U.S.C. 8903c(h). This new 
requirement is significant because, in its report, the FTC specifically 
identified and included the Postal Service's inability to access 
subsidies offered to private employers under the Medicare Part D 
program in its calculation of the total legal constraints. See FTC 
Report at 38-39, 56. As a result, the Commission finds that there has 
been one law linked to a separately delineated element within the FTC's 
calculation that has been amended, thereby constituting an event 
subsequent to the FTC Report's issuance that affects the validity of 
the estimate of the net economic effect.\9\ The Commission removes the 
cost of the Medicare Part D constraint from the total cost of the legal 
constraints and updates the FTC's calculation. Additionally, the 
Commission performed a supplemental analysis by updating the low-end 
and high-end costs associated with both the implicit subsidies and 
legal constraints based on the current appropriates share and 
competitive product revenue.
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    \8\ See Postal Service Reform Act of 2022 (PSRA), Public Law 
117-108, 136 Stat. 1127 (2022).
    \9\ The Commission finds no other changes to federal or state 
law affect the legal constraints estimate.

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[[Page 56096]]

IV. Invitation for Comments

    The Commission invites comment regarding its analysis of the 
``subsequent event'' identified and discussed above. The Commission 
also invites comments on any other changes in law behind the implicit 
subsidies and legal constraints quantified by the FTC that have changed 
since March 25, 2022, which was the last opportunity to provide comment 
in Docket Nos. RM2017-1 and RM2022-2, and whether any of the identified 
changes affect the continuing validity of the FTC's estimate of the net 
economic effect of those laws. Comments related to the reconsideration 
of the FTC's original conclusions as to what implicit subsides and 
legal constraints should be included in or excluded from the estimate 
of net economic effect, whether those subsidies or constraints were 
quantifiable, or whether alternative estimates of the quantified 
implicit subsides and legal constraints are possible are all beyond the 
scope of this review.\10\
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    \10\ See Order No. 4402 at 62-63; Order No. 4963 at 173-87.
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    Comments are due September 21, 2022. Additional information 
concerning this filing may be accessed via the Commission's website at 
http://www.prc.gov.
    Pursuant to 39 U.S.C. 505, Kenneth R. Moeller continues to be 
designated as an officer of the Commission (Public Representative) to 
represent the interests of the general public in this proceeding.

V. Ordering Paragraphs

    It is ordered:
    1. The Commission seeks comment on the matters raised by this 
Notice.
    2. Comments are due no later than September 21, 2022.
    3. Pursuant to 39 U.S.C. 505, Kenneth R. Moeller continues to be 
designated as an officer of the Commission (Public Representative) to 
represent the interests of the general public in this proceeding.
    4. The Commission directs the Secretary of the Commission to 
arrange for prompt publication of this Notice in the Federal Register.

    By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2022-19707 Filed 9-12-22; 8:45 am]
BILLING CODE 7710-FW-P