80 FR 43134 - Rate Adjustment Product

POSTAL REGULATORY COMMISSION

Federal Register Volume 80, Issue 139 (July 21, 2015)

Page Range		43134-43135
FR Document		2015-17782
The Commission is noticing a recent court of appeals remand of its decision concerning implementation of the Full Service IMb requirements. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Federal Register, Volume 80 Issue 139 (Tuesday, July 21, 2015)
[Federal Register Volume 80, Number 139 (Tuesday, July 21, 2015)]
[Notices]
[Pages 43134-43135]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-17782]


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POSTAL REGULATORY COMMISSION

[Docket No. R2013-10R; Order No. 2586]


Rate Adjustment Product

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is noticing a recent court of appeals remand of 
its decision concerning implementation of the Full Service IMb 
requirements. This notice informs the public of the filing, invites 
public comment, and takes other administrative steps.

DATES: Comments are due: August 3, 2015. Reply comments are due: August 
14, 2015.

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: On May 12, 2015, the United States Court of 
Appeals for the District of Columbia Circuit issued its opinion in 
United States Postal Service v. Postal Regulatory Commission, 785 F.3d 
740 (D.C. Cir. 2015). The court denied in part and granted in part a 
Postal Service petition for review of the Commission's November 21, 
2013 order denying implementation of the Full Service IMb requirements 
for failure to comply with 39 U.S.C. 3622(d).\1\ 785 F.3d at 744.
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    \1\ Order on Price Adjustments for Market Dominant Products and 
Related Mail Classification Changes, November 21, 2013 (Order No. 
1890).
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    On July 8, 2015, the court issued its mandate remanding the case to 
the Commission. This order establishes procedures on remand and 
solicits comments on the standard to be applied when considering 
whether mail preparation changes are changes in rates with respect to 
39 U.S.C. 3622(d).
    Background. On September 26, 2013, the Postal Service filed notice 
of its planned priced adjustment for market dominant products.\2\ The 
Postal Service's Notice and proposed rate increases failed to account 
for the planned implementation of the Full Service IMb requirements. 
Previously, on April 18, 2013, the Postal Service revised its Domestic 
Mail Manual to modify the eligibility requirements for mailers to 
qualify for automation First-Class, Standard, Periodicals, and Package 
Services rates. 78 FR 23137 (April 18, 2013). Full Service IMb was now 
required to qualify for automation rates, where previously mailers 
could qualify for automation rates by using either Full Service IMb or 
Basic IMb. This change in the mail preparation requirement for 
automation rates was scheduled to take place on January 26, 2014. Id. 
However, in its Notice, the Postal Service failed to adjust its billing 
determinants to account for the effects on the price cap calculation of 
the Full Service IMb requirements.
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    \2\ United States Postal Service Notice of Market-Dominant Price 
Adjustment, September 26, 2013 (Notice).
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    After considering the Postal Service's responses to information 
requests and comments from interested parties, the Commission issued 
Order No. 1890, finding that the Full Service IMb requirements 
``constitute a classification change with rate implications pursuant to 
39 U.S.C. 3622(d)(1)(A) and 39 CFR 3010.23(d).'' Order No. 1890 at 2. 
Accordingly, as the Postal Service failed to account for the deletion 
and redefinition of rate cells as a result of the Full Service IMb 
requirement when adjusting its billing determinants for First-Class, 
Standard, and Periodicals, the Commission found that the proposed rate 
adjustments exceeded the price cap.\3\ As a result, the Commission gave 
the Postal Service the option either to defer implementation of the 
Full Service IMb requirements or to submit an amended notice of rate 
adjustment that included billing determinants adjusted to account for 
the effects of the new requirements. Id. at 36. The Postal Service 
chose to defer implementation of the Full Service IMb requirements and 
filed an appeal with the DC Circuit Court of Appeals.\4\
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    \3\ Id. at 5. The Postal Service made adjustments to the billing 
determinants to account for the effects of the Full Service IMb 
requirements on the price cap calculation for Package Services.
    \4\ Response of the United States Postal Service to Order No. 
1890, November 29, 2013.
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    The court's opinion. On appeal the court affirmed the Commission's 
authority to determine when mail preparation changes affect the 
application of the price cap. Specifically, the court found that

[t]he Commission's interpretation of the statute prevents the Postal 
Service from evading the price cap by shifting mailpieces to higher 
rates through manipulation of its mail preparation requirements. The 
Commission's interpretation is therefore consistent with the price 
cap's language and purpose, and the Commission's delegated authority 
to administer the cap. 785 F.3d at 751.

    The court nevertheless concluded that the Commission's exercise of 
its authority was arbitrary and capricious for failing to ``articulate 
a comprehensible standard for the circumstances in which a change to 
mail preparation requirements such as the one in this case will be 
considered a `change in rates.' '' Id. at 753. In the court's view, the 
Commission failed to properly explain the standard it was applying to 
determine when a mail preparation change constituted a price change. 
Id. at 754. Thus, it granted the Postal Service's petition in part and 
remanded the case to the Commission to ``enunciate an intelligible 
standard and then reconsider its decision in light of that standard.'' 
Id. at 756.
    Request for comment. As directed by the court, the Commission will 
proceed to enunciate the standard applied to determine when mail 
preparation changes have rate effects with price cap implications, 
based on its expertise and past decisions considering similar changes. 
The Commission requests comments to afford all interested persons an 
opportunity to provide input on the standard used by the Commission.
    In conducting its analysis of whether a mail preparation change 
constitutes a rate change, the Commission will evaluate the following 
four factors: (1) Whether the change alters a basic characteristic of a 
mailing, (2) the effect

[[Page 43135]]

of the change on mailers, (3) the purpose of the change, and 4) whether 
the change results in a shift in volume of mail from one rate category 
to another. Each of these factors is weighed individually and the 
Commission intends to apply these factors to the Full Service IMb 
requirements in the decision on remand.
    In assessing the first factor, whether a mail preparation change 
alters a basic characteristic of a mailing, the Commission considers 
the following characteristics: (a) Whether the change modifies the 
size, weight, or content of eligible mail, (b) whether the change 
alters the presentation and/or preparation of the mailing in a 
substantial way, (c) regularity of the change (periodic vs. one-time), 
(d) magnitude of the change, and (e) the complexity of the change 
relating to mailer behavior.
    For the second factor, the Commission evaluates the following 
components to determine the effect of the mail preparation requirement 
on mailers: (a) Whether the change imposes fixed or variable costs, (b) 
the effect on high volume and low volume mailers, (c) the number of 
mailers affected, (d) the volume of mail affected, (e) the benefits to 
mailers, and (f) the timeframe for mailers to comply with the change.
    In considering the purpose of the change, the Commission examines 
whether the change: (a) Improves the expeditious collection, 
transportation, and/or delivery of the mail, (b) aligns with changes in 
the Postal Service's network and/or equipment, and (c) is intended to 
increase a price.
    For the final factor, the Commission takes into account whether the 
change in mail preparation requirements causes a shift in volume of 
mail from one rate category to another. This factor considers whether 
the changes result in the de facto elimination of a rate category or 
the deletion of a rate cell.
    These factors are intended to serve as a guide for a case-by-case 
analysis to determine whether a mail preparation change is a rate 
change with price cap implications. In the absence of explicit 
statutory definitions for determining when a mail preparation change 
constitutes a rate change with respect to 39 U.S.C. 3622(d), commenters 
are invited to provide any views on whether the four factors listed 
above (i.e., alter a basic characteristic of a mailing, effect on 
mailers, purpose of change, and shift volumes between rate cells) 
adequately set forth the parameters of mail preparation requirement 
changes to be examined to determine whether a change in mail 
preparation requirements has rate effects with price cap implications. 
Accordingly, to ensure that the Postal Service and other interested 
persons have an opportunity to provide input on the standard used by 
the Commission, the Commission solicits comments from interested 
persons on the four factors listed above and their components. Initial 
comments are due no later than August 3, 2015. Reply comments are due 
no later than August 14, 2015. All comments must be filed under Docket 
No. R2013-10R.
    It is ordered:
    1. The Commission establishes Docket No. R2013-10R to consider 
issues on remand.
    2. Kenneth E. Richardson will continue to serve as an officer of 
the Commission (Public Representative) to represent the interests of 
the general public in this proceeding.
    3. Initial comments addressing the Commission's standard to 
determine when mail preparation changes have rate effects with price 
cap implications are due no later than August 3, 2015.
    4. Reply comments addressing matters raised in initial comments are 
due no later than August 14, 2015.
    5. All comments and other documents related to issues on remand 
must be filed under Docket No. R2013-10R.
    6. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Ruth Ann Abrams,
Acting Secretary.
[FR Doc. 2015-17782 Filed 7-20-15; 8:45 am]
 BILLING CODE 7710-FW-P
Federal Register / Vol. 80, No. 139 / Tuesday, July 21, 2015 / Notices 43135

of the change on mailers, (3) the cap implications. Accordingly, to ensure FOR FURTHER INFORMATION CONTACT:
purpose of the change, and 4) whether that the Postal Service and other David A. Trissell, General Counsel, at
the change results in a shift in volume interested persons have an opportunity 202–789–6820.
of mail from one rate category to to provide input on the standard used SUPPLEMENTARY INFORMATION:
another. Each of these factors is weighed by the Commission, the Commission
individually and the Commission solicits comments from interested Table of Contents
intends to apply these factors to the Full persons on the four factors listed above I. Introduction
Service IMb requirements in the and their components. Initial comments II. Notice of Commission Action
decision on remand. are due no later than August 3, 2015. III. Ordering Paragraphs
In assessing the first factor, whether a Reply comments are due no later than I. Introduction
mail preparation change alters a basic August 14, 2015. All comments must be
characteristic of a mailing, the filed under Docket No. R2013–10R. On July 14, 2015, the Postal Service
Commission considers the following It is ordered: filed notice that it has entered into an
characteristics: (a) Whether the change 1. The Commission establishes Docket additional Global Expedited Package
modifies the size, weight, or content of No. R2013–10R to consider issues on Services 3 (GEPS 3) negotiated service
eligible mail, (b) whether the change remand. agreement (Agreement).1
alters the presentation and/or 2. Kenneth E. Richardson will To support its Notice, the Postal
preparation of the mailing in a continue to serve as an officer of the Service filed a copy of the Agreement,
substantial way, (c) regularity of the Commission (Public Representative) to a copy of the Governors’ Decision
change (periodic vs. one-time), (d) represent the interests of the general authorizing the product, a certification
magnitude of the change, and (e) the public in this proceeding. of compliance with 39 U.S.C. 3633(a),
complexity of the change relating to 3. Initial comments addressing the and an application for non-public
mailer behavior. Commission’s standard to determine treatment of certain materials. It also
For the second factor, the Commission when mail preparation changes have filed supporting financial workpapers.
evaluates the following components to rate effects with price cap implications
determine the effect of the mail II. Notice of Commission Action
are due no later than August 3, 2015.
preparation requirement on mailers: (a) 4. Reply comments addressing matters The Commission establishes Docket
Whether the change imposes fixed or raised in initial comments are due no No. CP2015–102 for consideration of
variable costs, (b) the effect on high later than August 14, 2015. matters raised by the Notice.
volume and low volume mailers, (c) the 5. All comments and other documents The Commission invites comments on
number of mailers affected, (d) the related to issues on remand must be whether the Postal Service’s filing is
volume of mail affected, (e) the benefits filed under Docket No. R2013–10R. consistent with 39 U.S.C. 3632, 3633, or
to mailers, and (f) the timeframe for 6. The Secretary shall arrange for 3642, 39 CFR part 3015, and 39 CFR
mailers to comply with the change. publication of this order in the Federal part 3020, subpart B. Comments are due
In considering the purpose of the Register. no later than July 22, 2015. The public
change, the Commission examines By the Commission. portions of the filing can be accessed via
whether the change: (a) Improves the the Commission’s Web site (http://
Ruth Ann Abrams,
expeditious collection, transportation, www.prc.gov).
and/or delivery of the mail, (b) aligns Acting Secretary.
The Commission appoints Cassie
with changes in the Postal Service’s [FR Doc. 2015–17782 Filed 7–20–15; 8:45 am]
D’Souza to serve as Public
network and/or equipment, and (c) is BILLING CODE 7710–FW–P Representative in this docket.
intended to increase a price.
For the final factor, the Commission III. Ordering Paragraphs
takes into account whether the change POSTAL REGULATORY COMMISSION It is ordered:
in mail preparation requirements causes [Docket No. CP2015–102; Order No. 2587] 1. The Commission establishes Docket
a shift in volume of mail from one rate No. CP2015–102 for consideration of the
category to another. This factor New Postal Product matters raised by the Postal Service’s
considers whether the changes result in Notice.
the de facto elimination of a rate AGENCY: Postal Regulatory Commission.
2. Pursuant to 39 U.S.C. 505, Cassie
category or the deletion of a rate cell. ACTION: Notice. D’Souza is appointed to serve as an
These factors are intended to serve as officer of the Commission to represent
SUMMARY: The Commission is noticing a
a guide for a case-by-case analysis to the interests of the general public in this
recent Postal Service filing concerning
determine whether a mail preparation proceeding (Public Representative).
an additional Global Expedited Package
change is a rate change with price cap 3. Comments are due no later than
Services 3 negotiated service agreement.
implications. In the absence of explicit July 22, 2015.
This notice informs the public of the
statutory definitions for determining 4. The Secretary shall arrange for
filing, invites public comment, and
when a mail preparation change publication of this order in the Federal
takes other administrative steps.
constitutes a rate change with respect to Register.
39 U.S.C. 3622(d), commenters are DATES: Comments are due: July 22,
2015. By the Commission.
invited to provide any views on whether
Ruth Ann Abrams,
the four factors listed above (i.e., alter a ADDRESSES: Submit comments
asabaliauskas on DSK5VPTVN1PROD with NOTICES

basic characteristic of a mailing, effect electronically via the Commission’s Acting Secretary.
on mailers, purpose of change, and shift Filing Online system at http:// [FR Doc. 2015–17783 Filed 7–20–15; 8:45 am]
volumes between rate cells) adequately www.prc.gov. Those who cannot submit BILLING CODE 7710–FW–P
set forth the parameters of mail comments electronically should contact
1 Notice of United States Postal Service of Filing
preparation requirement changes to be the person identified in the FOR FURTHER
a Functionally Equivalent Global Expedited
examined to determine whether a INFORMATION CONTACT section by
Package Services 3 Negotiated Service Agreement
change in mail preparation telephone for advice on filing and Application for Non-Public Treatment of
requirements has rate effects with price alternatives. Materials Filed Under Seal, July 14, 2015 (Notice).

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Document Created: 2018-02-23 09:23:05
Document Modified: 2018-02-23 09:23:05
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Notice.
Dates		Comments are due: August 3, 2015. Reply comments are due: August 14, 2015.
Contact		David A. Trissell, General Counsel, at 202-789-6820.
FR Citation		80 FR 43134