[Federal Register Volume 87, Number 222 (Friday, November 18, 2022)]
[Proposed Rules]
[Pages 69236-69237]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-25157]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3030

[Docket No. RM2020-5; Order No. 6325]
RIN 3211-AA27


Market Dominant Postal Products

AGENCY: Postal Regulatory Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission proposes amendments to its regulations 
concerning rate incentives for Market Dominant products and republishes 
additional rules. The Commission invites public comment.

DATES: Comments are due: December 19, 2022.

ADDRESSES: Submit comments electronically via the Commission's Filing 
Online system at https://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. Background
II. Basis for Proposed Rule Change
III. Proposed Rule

I. Background

    In its general Market Dominant rate adjustment filings, the Postal 
Service routinely proposes to offer rate incentives in the form of 
promotions that reduce rates by providing discounts, rebates, or 
credits to participating mailers of certain types of mailpieces. 
Typically, such promotions are offered for several months during a 
particular calendar year for certain mailpieces in the First-Class Mail 
and USPS Marketing Mail classes. If the Commission approves, then the 
promotion may be offered again, with or without modifications, in the 
next calendar year. Each rate incentive offered by the Postal Service 
is either a rate of general applicability or a rate not of general 
applicability. A rate incentive of general applicability may be 
eligible for inclusion in the percentage change in rates calculation 
(provided that it satisfies all the applicable criteria under the 
Commission rules), which will allow for the Postal Service to generate 
price cap authority for the applicable class of mail. By contrast, a 
rate incentive not of general applicability is ineligible for inclusion 
in the percentage change in rates calculation; it may not be used to 
generate price cap authority for the applicable class of mail.
    The Commission previously adopted regulations concerning rate 
incentives for Market Dominant products.\1\ However, in connection with 
an appeal, the Commission stated that it would reconsider Order No. 
5510 and that it ``does not intend to enforce Order No. 5510 during the 
reconsideration period.'' \2\ Having reconsidered, the Commission 
proposes modifying certain of those rules as well as republishing and 
enforcing certain other of those rules.
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    \1\ Docket No. RM2020-5, Order Adopting Final Rules Regarding 
Rate Incentives for Market Dominant Products, May 15, 2022 (Order 
No. 5510).
    \2\ Docket No. RM2020-5, Notice of Intent to Reconsider, August 
26, 2020, at 2 (Order No. 5655); see U.S. Postal Serv. v. Postal 
Reg. Comm'n, Joint Motion for Voluntary Dismissal and Vacatur, No. 
20-1208 (D.C. Cir. Sept. 11, 2020).
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II. Basis for Proposed Rule Change

    The Commission proposes to clarify its rules by making one revision 
and by beginning to enforce two revisions that it made in Order No. 
5510. First, the Commission proposes to amend Sec.  3030.101(j) to 
clarify that to qualify as a rate of general applicability, a rate 
incentive cannot be based on historical mail volumes or prior 
participation in a rate incentive or promotion. Second, the Commission 
proposes to begin enforcing the changes that it made to Sec.  
3030.128(f)(2) in Order No. 5510 (including the additional criterion 
that a rate incentive must be made available to all mailers equally on 
the same terms and conditions to be eligible for inclusion in the 
percentage change in rates calculation). Third, the Commission proposes 
to begin enforcing the changes that it made to Sec.  3030.123(j), 
including additional requirements intended to ensure that the Postal 
Service provides sufficient information at the outset of a Market 
Dominant rate adjustment proceeding.
    The proposed revision of the definition of ``rate of general 
applicability'' in Sec.  3030.101(j) is designed to clarify what rate 
incentives may qualify for inclusion in the percentage change in rates 
calculation as rates of general applicability. Under the Commission's 
existing rules ``[a] rate is not a rate of general applicability if 
eligibility for the rate is dependent on factors other than the 
characteristics of the mail to which the rate applies[.]'' 39 CFR 
3030.101(j). A characteristic of the mail is a feature of the mail 
sent, not of the mailer sending the mail. Thus, the proposed rule adds 
an additional sentence to clarify that a rate incentive is not a rate 
of general applicability if eligibility for the rate is dependent in 
whole or in part on the volume of mail sent by a mailer in a past year 
or years or on the participation by a mailer in a rate incentive or 
promotion in a past year or years. Revising the Commission's definition 
of ``rate of general applicability'' will provide other benefits. These 
other benefits include promoting fairness, avoiding unharmonious 
situations in the application of the Commission's rules, limiting 
situations in which the Postal Service could obtain undue rate 
authority, and maintaining streamlined calculations.
    The Commission also proposes republishing and beginning to enforce 
the requirement of Sec.  3030.128(f)(2)(iv) that rate incentives 
included in the percentage change in rates calculation

[[Page 69237]]

be ``available to all mailers equally on the same terms and 
conditions.'' Enforcing this provision will enhance fairness. The 
Postal Service has the pricing flexibility generally to set individual 
Market Dominant rate cells as it chooses, subject to the class-level 
application of the price cap. When a rate incentive is not made 
available to all mailers equally on the same terms and conditions, the 
discounts received by eligible mailers could be offset in part by 
higher rates paid by non-eligible mailers. This situation could lead to 
the non-eligible mailers effectively paying higher rates as a result of 
the rate incentive without having an opportunity to receive its 
benefits. Enforcing the requirement of Sec.  3030.128(f)(2)(iv) that 
rate incentives included in the percentage change in rates calculation 
be ``available to all mailers equally on the same terms and 
conditions'' will prevent such situations from arising.
    To clarify the specific information necessary to determine whether 
rate incentives should be included in the percentage change in rates 
calculation, the Commission proposes republishing and beginning to 
enforce the requirements for the contents of the Postal Service's 
notice of rate adjustment related to Market Dominant rate incentives. 
These more detailed initial filing requirements will require the Postal 
Service to provide sufficient information at the outset of a Market 
Dominant rate adjustment proceeding to ensure that any rate incentive 
included in a percentage change in rates calculation meets the criteria 
of Sec.  3030.128(f)(2).

III. Proposed Rule

    Proposed Sec.  3030.101(j). Proposed Sec.  3030.101(j) is revised 
to state clearly that the definition of ``rate of general 
applicability'' within the context of a Market Dominant rate adjustment 
proceeding does not include a rate incentive that is dependent on the 
volume of mail sent by a mailer in a past year or years or the 
participation by a mailer in a rate incentive or promotion in a past 
year or years.
    Current Sec.  3030.123(j). Current Sec.  3030.123(j) is republished 
to identify clearly what information the Postal Service must file to 
support its claim that a rate incentive meets the necessary criteria to 
be included in a percentage change in rates calculation. Current Sec.  
3030.123(j) will be enforced in its entirety.
    Current Sec.  3030.128(f)(2)(iv). Current Sec.  3010.128(f)(2)(iv) 
is republished to include a criterion for a Market Dominant rate 
incentive to be included in a percentage change in rates calculation 
that the incentive be available to all mailers equally on the same 
terms and conditions. Current Sec.  3010.128(f)(2)(iv) will be enforced 
in its entirety.

List of Subjects in 39 CFR Part 3030

    Administrative practice and procedure, Postal Service.

    For the reasons stated in the preamble, the Commission proposes to 
amend chapter III of title 39 of the Code of the Federal Regulations as 
follows:

PART 3030--REGULATION OF RATES FOR MARKET DOMINANT PRODUCTS

0
1. The authority citation for part 3030 continues to read as follows:

    Authority:  39 U.S.C. 503; 3622.

0
2. Amend Sec.  3030.101 by revising paragraph (j) to read as follows:


Sec.  3030.101  Definitions.

* * * * *
    (j) Rate of general applicability means a rate applicable to all 
mail meeting standards established by the Mail Classification Schedule, 
the Domestic Mail Manual, and the International Mail Manual. A rate is 
not a rate of general applicability if eligibility for the rate is 
dependent on factors other than the characteristics of the mail to 
which the rate applies. A rate incentive is not a rate of general 
applicability if eligibility for the rate is wholly or partially 
dependent on the volume of mail sent by a mailer in a past year or 
years or on the participation by a mailer in a rate incentive or 
promotion in a past year or years. A rate is not a rate of general 
applicability if it benefits a single mailer. A rate that is only 
available upon the written agreement of both the Postal Service and a 
mailer, a group of mailers, or a foreign postal operator is not a rate 
of general applicability.
* * * * *
0
3. Republish Sec.  3030.123 paragraph (j) to read as follows:


Sec.  3030.123   Supporting technical documentation.

* * * * *
    (j) Whenever the Postal Service includes a rate incentive with its 
planned rate adjustment, it must include with its filing:
    (1) Whether the rate incentive is being treated under Sec.  
3030.128(f)(2) or under Sec.  3030.128(f)(1) and (g);
    (2) If the Postal Service seeks to include the rate incentive in 
the calculation of the percentage change in rates under Sec.  
3030.128(f)(2), whether the rate incentive is available to all mailers 
equally on the same terms and conditions; and
    (3) If the Postal Service seeks to include the rate incentive in 
the calculation of the percentage change in rates under Sec.  
3030.128(f)(2), sufficient information to demonstrate that the rate 
incentive is a rate of general applicability, which at a minimum 
includes: The terms and conditions of the rate incentive; the factors 
that determine eligibility for the rate incentive; a statement that 
affirms that the rate incentive will not benefit a single mailer; and a 
statement that affirms that the rate incentive is not only available 
upon the written agreement of both the Postal Service and a mailer, or 
group of mailers, or a foreign postal operator.
* * * * *
0
4. Republish Sec.  3030.128 paragraph (f)(2) to read as follows:


Sec.  3030.128  Calculation of percentage change in rates.

* * * * *
    (f) * * *
    (2) A rate incentive may be included in a percentage change in 
rates calculation if it meets the following criteria:
    (i) The rate incentive is in the form of a discount or can be 
easily translated into a discount;
    (ii) Sufficient billing determinants are available for the rate 
incentive to be included in the percentage change in rate calculation 
for the class, which may be adjusted based on known mail 
characteristics or historical volume data (as opposed to forecasts of 
mailer behavior);
    (iii) The rate incentive is a rate of general applicability; and
    (iv) The rate incentive is made available to all mailers equally on 
the same terms and conditions.

    By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2022-25157 Filed 11-17-22; 8:45 am]
BILLING CODE 7710-FW-P