[Federal Register Volume 88, Number 67 (Friday, April 7, 2023)]
[Proposed Rules]
[Pages 20787-20788]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-07327]
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POSTAL REGULATORY COMMISSION
39 CFR Parts 3035, 3050, and 3060
[Docket No. PI2023-3; Order No. 6471]
RIN 3211-AA36
Postal Costing
AGENCY: Postal Regulatory Commission.
ACTION: Advanced notice of proposed rulemaking.
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SUMMARY: Due to recent legislation, the Commission is initiating a
review of regulations that relate to postal cost attribution in order
to determine whether any revisions to those regulations, or to any
analytical principles (including any costing methodologies or cost
models) used in postal cost attribution, are appropriate. The
Commission takes certain administrative steps and invites public
comment.
DATES: Comments are due: June 14, 2023; Reply Comments are due: July
14, 2023.
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. Background
II. Invitation To Comment
III. Administrative Actions
I. Background
The PSRA, enacted on April 6, 2022, amended Title 39 of the United
States Code and other relevant statutory provisions. Among other
changes, section 203 of the PSRA added a note to 39 U.S.C. 3633, which
requires that the Commission, no later than April 6, 2023, ``initiate a
review of the regulations issued pursuant to sections 3633(a) and
3652(a)(1) of title 39, United States Code, to determine whether
revisions are appropriate to ensure that all direct and indirect costs
attributable to competitive and market-dominant products are properly
attributed to those products, including by considering the underlying
methodologies in determining cost attribution and considering options
to revise such methodologies.'' PSRA section 203. Section 203 also
specifies that, if, after notice and public comment, the Commission
determines ``that revisions are appropriate, the Commission shall make
modifications or adopt alternative methodologies as necessary.'' See
id.
The Postal Service uses a two-tier costing system to categorize its
accrued costs. The Postal Service first identifies all costs that can
be reliably and causally linked to individual postal products or groups
of products, using Commission-approved analytical principles, and
attributes those costs to products or product groupings. All remaining
costs are classified as institutional. This two-tier postal costing
approach, which is deeply rooted in the Postal Service's historical
treatment of costs,\1\ has been adopted into Title 39 of the United
States Code.\2\ Specifically, Sections 3631(b) and 3622(c) of Title 39
of the United States Code expressly codify ``reliably identified causal
relationships'' as the standard for cost attribution. A detailed
description of the approach to postal cost attribution currently
employed by the Postal Service and the Commission appears in Docket
Nos. RM2017-1 and RM2022-2.\3\
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\1\ In implementing the Postal Reorganization Act, Public Law
91-375, 84 Stat. 719 (1970), the former Postal Rate Commission
developed the two-tier approach to costing. That approach was upheld
by the Supreme Court of the United States. See Nat'l Ass'n of
Greeting Card Publishers v. U.S. Postal Serv., 462 U.S. 810, 833
(1983) (specifically rejecting the imposition of an intermediary
tier of costs, based on extended inferences of causation, between
attributable and institutional costs).
\2\ Postal Accountability and Enhancement Act, Public Law 109-
435, 120 Stat. 3201, 3205 (2006); 39 U.S.C. 3622(c)(2), 3631(b); see
also S. Rep. No. 108-318, at 9-10 (2004). The enactment of the PSRA
did not disturb this two-tier approach. See Docket Nos. RM2017-1 and
RM2022-2, Order Finalizing Rule Relating to the Institutional Cost
Contribution Requirement for Competitive Products, January 9, 2023,
at 37 n. 40 (Order No. 6399).
\3\ Supplemental Notice of Proposed Rulemaking and Order
Initiating the Third Review of the Institutional Cost Contribution
Requirement for Competitive Products, November 18, 2021, at 11-35
(Order No. 6043).
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Since the enactment of the Postal Accountability and Enhancement
Act (PAEA) and the Commission's subsequent promulgation of
regulations,\4\ the Postal Service has improved the information used as
the basis for cost attribution by changing or upgrading numerous data
systems and updating and improving special cost studies. As a result,
the Commission has presided over numerous rulemakings that have
affected cost attribution.
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\4\ See generally Docket No. RM2007-1, Order Establishing
Ratemaking Regulations for Market Dominant and Competitive Products,
October 29, 2007 (Order No. 43).
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Cost attribution can be affected in major or minor ways through
Commission proceedings that involve changes in ``analytical
principles.'' Analytical principles refer to economic, mathematical, or
statistical theories, precepts, or assumptions applied by the Postal
Service in producing required periodic reports. See 39 CFR 3050.1(c).
Analytical principles include, but are not limited to, costing
methodologies and cost models that the Postal Service relies upon to
generate cost-related data. The Commission has presided over many such
proceedings to change accepted analytical principles since the PAEA was
enacted.
II. Invitation To Comment
The Commission invites interested persons to comment on regulations
related to Postal Service cost attribution, as well as the analytical
principles (including costing methodologies or cost models) underlying
postal cost attribution. Comments should focus on whether revisions to
any regulations or analytical principles are necessary ``to ensure that
all direct and indirect costs attributable to competitive and market-
dominant products are properly attributed to those products . . . .''
PSRA section 203. Commenters are reminded that the scope of this docket
is focused on regulations and analytical principles pertaining to cost
attribution.
III. Administrative Actions
Pursuant to section 203 of the PSRA, the Commission establishes
Docket No. PI2023-2 in order to review regulations issued pursuant to
39 U.S.C. 3633(a) and 3652(a)(1) relevant to the issue of postal cost
attribution, as well as analytical principles (including costing
methodologies or cost models) relevant to postal cost attribution. The
Commission intends to evaluate the comments received and use those
suggestions to help carry out the responsibilities described in section
203 of the PSRA. Comments are due no later than June 14, 2023. Reply
comments are due no later than July 14, 2023.
Comments and other material filed in this proceeding will be
available for review on the Commission's website unless the information
contained therein is subject to an application for non-public
treatment. The Commission's rules on non-public materials (including
access to
[[Page 20788]]
documents filed under seal) appear in 39 CFR part 3011.
Pursuant to 39 U.S.C. 505, the Commission appoints Katalin K.
Clendenin to represent the interests of the general public (Public
Representative) in this proceeding.
By the Commission.
Mallory Richards,
Attorney-Advisor.
[FR Doc. 2023-07327 Filed 4-6-23; 8:45 am]
BILLING CODE 7710-FW-P