[Federal Register Volume 87, Number 202 (Thursday, October 20, 2022)]
[Notices]
[Pages 63827-63828]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-22890]


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POSTAL REGULATORY COMMISSION

[Docket No. MC2023-12; Order No. 6301]


Market Dominant Product List

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is recognizing a recent Postal Service filing 
requesting to add USPS Connect Local Mail as a new, permanent product 
to the Mail Classification Schedule and the request's dismissal.

FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at 
202-789-6820.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction and Overview
II. Commission Analysis
III. Ordering Paragraphs

I. Introduction and Overview

    On October 11, 2022, the Postal Service filed a request with the 
Commission pursuant to 39 U.S.C. 3642 and 39 CFR 3045.18 to add USPS 
Connect Local Mail, currently an experimental product, as a new, 
permanent product offering under the Mail Classification Schedule (MCS) 
section 1115 (Market Dominant Products: First-Class Mail: First-Class 
Mail Flats).\1\ The USPS Connect Local Mail market test was initially 
authorized by the Commission on January 4, 2022.\2\ It is currently set 
to expire on January 8, 2024. Order No. 6080 at 20. USPS Connect Local 
Mail is a derivative of First-Class Mail that functions as an 
alternative to long-distance, end-to-end mailing for use by business 
mailers who wish to send mail locally with regular frequency. Order No. 
6080 at 2.
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    \1\ United States Postal Service Request to Convert USPS Connect 
Local Mail to a Permanent Offering, October 11, 2022, at 1-2 
(Request).
    \2\ Docket No. MT2022-1, Order Authorizing Market Test of 
Experimental Product--USPS Connect Local Mail, January 4, 2022 
(Order No. 6080).
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    In order for the Commission to convert an experimental product 
offering into a permanent product offering, the Postal Service must 
first file a request that complies with, among other rules, 39 U.S.C. 
3642, 39 CFR 3040.131, 39 CFR 3040.132, and 39 CFR 3045.18. Because the 
Request does not contain the information required by these statutes and 
regulations, the Commission dismisses the Request. This dismissal is 
without prejudice to allow the Postal Service to refile a compliant 
request to convert USPS Connect Local Mail into a permanent product 
offering, should it see fit.

II. Commission Analysis

    As the Postal Service correctly identifies, a request to add a non-
experimental product to the Market Dominant product list based on an 
experimental product is governed by 39 U.S.C. 3642 and 39 CFR 3045.18. 
Request at 1. The regulation sets out numerous requirements, including 
that the request be filed ``pursuant to 39 U.S.C. 3642 and part 3040, 
subpart B of this chapter.'' 39 CFR 3045.18(a). Part 3040, subpart B, 
in turn, contains the requirements that the Postal Service must follow 
to modify the product lists generally. Among these requirements is the 
mandate that the Postal Service ``[p]rovide all supporting 
justification'' upon which it proposes to rely on making the request. 
39 CFR 3040.131(e).
    The supporting justification is the crux of the request to modify 
the product list. Section 3040.132 sets out in detail the contents of 
the supporting justification. See 39 CFR 3040.132.
    Such information is not only required by law but necessary in 
practice. As the Commission has previously explained in the analogous 
context of changes to the MCS, a full and complete request is important 
to ensure that the Commission has ``sufficient information to make the 
necessary determination as to whether a[ ] MCS change is appropriate'' 
and to avoiding the issuance of large numbers of Chairman's Information 
Requests during proceedings, which leads ``to the expenditure of 
additional resources by the Commission, the Postal Service, and other 
interested persons'' and ``complicate[s] the Commission's review.'' \3\ 
An insufficient initial ``explanation of and justification for proposed 
classification changes also undermines the Commission's objective that 
changes [ ] are made in an accurate and transparent manner, such that 
it is clear to participants in Commission proceedings, users of the 
mail, and the Commission the precise changes the Postal Service is 
proposing, the likely effects, and the Postal Service's rationale for 
proposing such changes.'' \4\
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    \3\ Docket No. RM2015-6, notice of proposed rulemaking, Changes 
and Corrections to the Mail Classification Schedule, November 14, 
2014, at 2 (79 FR 69781 (November 24, 2014)) (Order No. 2250).
    \4\ Docket Nos. CP2022-22 and CP2022-62, Order Granting in Part 
the United States Postal Service's Motions for Clarification of 
Order Nos. 6071 and 6195, August 15, 2022, at 9-10 (Order No. 6249).
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    The previous proceedings related to USPS Connect Local Mail provide 
a good example of the importance of the required information. In 
approving the market test, the Commission emphasized that safeguards in 
the market test process--specifically, limited duration and revenue and 
the reevaluation of the product should the Postal Service wish to 
extend the test or offer the product permanently--weighed in favor of 
allowing the market test to proceed. Order No. 6080 at 15. The 
Commission explained that, going forward:

    [I]f the Postal Service submits a request to convert USPS 
Connect Local Mail into a non-experimental offering (such as a 
permanent product, permanent price category, or a negotiated service 
agreement), the Postal Service must comply with 39 CFR 3045.18 and 
39 CFR part 3040, subpart B. See 39 CFR 3045.18(a). The Commission 
expects that such a request would include, among other things, the 
information and supporting justification that would enable correct 
categorization of the proposed offering. See 39 CFR 3040.131, 
3040.132.

    Order No. 6080 at 15-16.
    However, the Request fails to include the information required by 
39 U.S.C. 3642, 39 CFR 3040.131, 39 CFR

[[Page 63828]]

3040.132, 39 CFR 3045.18, and contemplated by the Commission in Order 
No. 6080. Among other deficiencies, the Request does not include a 
supporting justification that provides information sufficient to 
perform a market power analysis, explain why USPS Connect Local Mail is 
or is not covered by the postal monopoly, provide a description of the 
private businesses engaged in the delivery of the product or of the 
likely impact on small businesses, or give the views of users of the 
product. See 39 CFR 3040.132. In short, the Request fails to ``include 
such information and data, and such statements of reasons and bases, as 
are necessary and appropriate to fully inform the Commission of the 
nature, scope, significance, and impact of the proposed modification.'' 
Id., (i).
    Further, by rule the Postal Service is required to file its request 
at least 60 days before it wishes for the Commission to make its 
determination. See 39 CFR 3045.18(d)(2)(ii). This date is predicated on 
the Postal Service providing complete information to facilitate comment 
by interested parties and a fulsome review by the Commission itself. In 
the absence of such information, a complete analysis and decision 
within 60 days is not possible.\5\
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    \5\ It should also be noted that the current market test's 
expiration date of January 8, 2024, appears to allow the Postal 
Service the opportunity to both provide services without 
interruption to customers and time to collect more complete volume, 
revenue, and cost test data.
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    Because the Request does not contain the information required by 
law and necessary for the Commission to determine the appropriateness 
of converting USPS Connect Local Mail to a permanent product offering, 
the Commission shall dismiss the Request without prejudice to the 
Postal Service to file a compliant request.

III. Ordering Paragraphs

    It is ordered:
    1. The United States Postal Service Request to Convert USPS Connect 
Local Mail to a Permanent Offering, filed October 11, 2022, does not 
meet the statutory and regulatory requirements of a request to convert 
the experimental product to a permanent product offering.
    2. The Commission cannot approve the USPS Connect Local Mail 
product as a permanent product offering based upon the record before 
it.
    3. The Commission hereby dismisses, without prejudice, the United 
States Postal Service Request to Convert USPS Connect Local Mail to a 
Permanent Offering, filed October 11, 2022.
    4. The Secretary shall arrange for publication of this Order in the 
Federal Register.

    By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2022-22890 Filed 10-19-22; 8:45 am]
BILLING CODE 7710-FW-P