Before the

POSTAL REGULATORY COMMISSION

WASHINGTON, DC 20268-0001

Competitive Product Prices Docket No. CP2009-22

International Business Reply Service Contracts 1 (MC2009-14)

Negotiated Service Agreement

PUBLIC REPRESENTATIVE COMMENTS IN RESPONSE TO

UNITED STATES POSTAL SERVICE NOTICE CONCERNING FILING OF ADDITIONAL
INTERNATIONAL BUSINESS REPLY SERVICE CONTRACT 1 NEGOTIATED SERVICE
AGREEMENT

(February 11, 2009)

In response to Order No. 177,[^1] the Public Representative hereby
comments on the January 30 Request (hereafter "Notice") of the United
States Postal Service to approve an additional International Business
Reply Service (IBRS) Contract 1 negotiated service agreement (NSA).

The Notice complies with title 39 stipulations and the relevant
Commission Rules of Practice and Procedure. It appears, therefore, to be
beneficial to the general public.

The Public Representative has accessed and reviewed all materials the
United States Postal Service submitted under seal in this matter,
documentation in its original (not redacted) version. Additionally, it
appears from the data submitted that the instant contract's pricing
terms fully comport with the Governors' December 24, 2008 Decision
(08-24). Due to its substantially similar content, form and purpose,
this NSA appears to be the functional equivalent of the
recently-approved IBRS NSA (Docket Nos. MC2009-14 and CP2009-20,
Commission Order 178, February 5, 2009). The Notice (and its
accompanying documentation) is persuasive. Each element of 39 USC
3633(a) appears to be met by this IBRS contract.

**Accountability and Confidentiality**

For a competitive products pricing schedule *not of general
applicability*,[^2] the Postal Service must demonstrate that the
contract will comply with 39 USC 3633(a): It will not allow market
dominant products to subsidize competitive products, it will ensure that
each competitive product covers its attributable costs; and enable
competitive products as a whole to cover their costs (contributing a
minimum of 5.5 percent to the Postal Service's total institutional
costs). The Governors and the Postal Service executives who analyzed
this NSA certified that that the IBRS contract meets the statutory
requirements.

The Postal Service Notice contains a rationale for maintaining
confidentiality concerning pricing, processes which enable discounted
pricing, the attendant formulae and other contractual terms which are
matters of commercial sensitivity.[^3] Here, it would appear that the
Postal Service has concisely justified the extent of confidentiality
appropriate in this matter, providing a brief explanation for
maintaining the confidentiality of each aspect of the matters remaining
under seal. It appears that the Postal Service has made a good faith
effort to supply enough pertinent details to demonstrate the need for
material under seal to be protected.

**Public Interest in International Business Reply Service**

The general public interest in Business Reply Mail (BRM) is served by
having an affordable and facile method of responding to business
proposals, or returning merchandise. Domestic BRM is a service purchased
by the original mailer. With BRM, the mailer can receive First-Class
Mail back from customers and pay postage only for the pieces returned to
the mailer from the original distribution of BRM pieces. These pieces
are starkly different from other mail. They must have a specific address
(automation readable) and format. In a rectangle above the address with
the legend, "Business Reply Mail," the mailer's BRM permit number and
Post Office where the permit is held are noted. A box in the upper right
corner of the mailpiece indicates there is "no postage necessary" when
conditions are met. To the left, several vertical bars \-- comprising
the Facing Identification Mark (FIM) appear. Immediately below the "no
postage" indicum, a series of horizontal bars parallel to the length of
the mailpiece. The thick bars must be uniform in length, at least one
inch long and evenly spaced.

> ![](media/image1.jpeg){width="5.625in" height="5.219444444444444in"}

Illustration from the *International Mail Manual* Issue 35, May 12, 2008
(updated with *Postal Bulletin* revisions through January 29, 2009),
Exhibit 373.6.

Only BRM permit holders may use business reply mail, and postage and
fees are collected when the mail is delivered back to the original
mailer. Nevertheless, the special formatting enables BRM to be processed
expeditiously throughout its handling. Delivery occurs when the BRM
permit holder picks up the replies at the designated postal facility.
For business mailers, this service provides an excellent means for
customers to contact the permit holder.

Aside from the convenience of using BRM to communicate with permit
holders, and the added efficiencies BRM can add to mail processing, the
interest of the general public in BRM is somewhat tangential. One might
think of BRM as the sophisticated business' *Répondez s\'il vous plaît*,
providing a free method for the correspondent to R.S.V.P. It is a
refinement of courtesy reply mail (CRM), where a mailer provides
envelopes or postcards to customers, to expedite delivery of their
responses. With CRM, the correspondent must affix the postage before
mailing the reply. The general public might also see a relation between
IBRS and international reply coupons (IRCs). These are coupons that are
exchangeable for postage at post offices in member countries of the
Universal Postal Union. IRCs are sold by post offices worldwide. IRCs
enable members of the public to prepay the postage for a return reply
from a foreign correspondent.

When a product increases the efficiency of the mails, it serves the
public interest. IBRS not only does so, it makes it more efficient for
the business mailer to further transactions with foreign customers.
Doing so at a negotiated rate is in the best interest of the mailer, the
Postal Service and ultimately, the general public who uses the mail -- a
"win-win-win" situation.

**Cost Coverage**

The essential inquiry into competitive products and competitive product
NSAs is that of cost coverage, individually and in the aggregate, and
assurance that the product will contribute a requisite percentage to the
Postal Service's institutional costs. Pricing data submitted under seal
indicate that this NSA indicates an affirmative to each part of this
three-point inquiry.

**Conclusion**

The Public Representative submits that the present IBRS Contract 1
agreement complies with title 39. It will not allow market dominant
products to subsidize competitive products, it will ensure that each
competitive product covers its attributable costs; and enable
competitive products as a whole to cover their costs (contributing a
minimum of 5.5 percent to the Postal Service's total institutional
costs). The Postal Service request also fulfills all relevant
requirements for Commission Rules of Practice and Procedure.

The Public Representative respectfully offers the preceding Comments for
the Commission's consideration.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Paul L. Harrington

Public Representative

901 New York Ave., NW Suite 200

Washington, D.C. 20268-0001

\(202\) 789-6867; Fax (202) 789-6883

e-mail: <paul.harrington@prc.gov>

[^1]: Notice and Order Concerning Filing of Additional International
    Business Reply Service Contract 1 Negotiated Service Agreement
    February 4, 2009.

[^2]: *See* 39 C.F.R. 3015.5-7.

[^3]: Postal Service Request, at 2-3.