FR Doc E8-12764[Federal Register: June 6, 2008 (Volume 73, Number 110)]
[Notices]               
[Page 32364-32365]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06jn08-122]                         

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POSTAL REGULATORY COMMISSION

 [Docket No. CP2008-7; Order No. 79]

 
Express Mail International Bilateral/Multilateral Agreements

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: A new law gives the Postal Service considerable pricing 
flexibility for competitive products. Pursuant to this authority, the 
Postal Service has filed two notices with the Commission concerning 
prices for inbound international Express Mail, which is in the 
competitive category. The Commission has established a consolidated 
docket for consideration of these pricing decisions. This will allow 
interested persons an opportunity to comment.

DATES: Comments due June 16, 2008.

ADDRESSES: Submit documents electronically via the Commission's Filing 
Online system at http://www.prc.gov.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
202-789-6820 and stephen.sharfman@prc.gov.

SUPPLEMENTARY INFORMATION: On May 20, 2008, the Postal Service filed 
notice, pursuant to 39 U.S.C. 3632(b)(3) and 39 CFR 3015.5, of the 
Governors' decision establishing prices for competitive products not of 
general applicability for Inbound Express Mail International (EMS).\1\ 
The Postal Service's filing, docketed as Docket No. CP2008-6, includes 
supporting material, including the Governors' Decision, filed under 
seal. In support of this treatment, the Postal Service asserts that 
prices negotiated under bilateral/multilateral agreements are highly 
confidential among postal administrations and that their public 
disclosure would compromise the Postal Service's ability to negotiate 
agreements with other posts. Id. at 1.
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    \1\ Notice of United States Postal Service of Governors' 
Decision on Inbound Prices Under Express Mail International (EMS) 
Bilateral/Multilateral Agreements, May 20, 2008 (Notice).
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    Concurrently, the Postal Service filed notice, pursuant to 39 CFR 
3015.5, of a specific negotiated service agreement covering Inbound EMS 
prices.\2\ This filing, docketed as Docket No. CP2008-7, includes the 
contract and supporting materials filed under seal. In support, the 
Postal Service asserts that its ability to negotiate bilateral or 
multilateral EMS agreements would be compromised if the underlying 
prices are publicly disclosed. It also states that public disclosure 
would compromise foreign posts' ability to negotiate with other posts. 
Id.
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    \2\ Notice of United States Postal Service of Filing an 
Agreement for Inbound Express Mail International (EMS) Prices, May 
20, 2008 (Pricing Notice).
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    The Postal Service filings in these dockets are related. Docket No. 
CP2008-6 establishes, in essence, a shell classification, while Docket 
No. CP2008-7 is a specific agreement negotiated pursuant to the 
conditions of the shell classification.\3\ Given this 
interrelationship, the Commission will consolidate these proceedings 
for purposes of review.\4\
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    \3\ The Postal Service notes that it previously suggested 
proposed language for inclusion in the draft Mail Classification 
Schedule (MCS) applicable to Inbound EMS. United States Postal 
Service Submission of Additional Mail Classification Schedule 
Information in Response to Order No. 43, November 20, 2007 (November 
20 Filing). Its filings entail no changes to the previously proposed 
language. The draft MCS remains under review. The Commission 
anticipates providing interested persons an opportunity to comment 
on the draft MCS in the near future.
    \4\ All future filings in the consolidated docket shall be made 
under Docket No. CP2008-7.
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    In Order No. 43, the Commission issued regulations establishing a 
modern system of rate regulation, including identifying a list of 
competitive products. PRC Order No. 43, October 29, 2007, paras. 3061, 
4013. Among other things, the Commission determined that each 
negotiated service agreement would initially be classified as a 
separate product. The Commission also acknowledged, however, the 
possibility of grouping functionally equivalent agreements as a single 
product if they exhibit similar cost and market characteristics. Id. 
paras. 2177 and 3001. Thus, the EMS agreement filed in Docket No. 
CP2008-7, representing the first bilateral/multilateral agreement 
presented to the Commission, will be classified as a new product.

[[Page 32365]]

    As noted above, the Postal Service filed both dockets pursuant to 
rule 3015.5. Recognizing that the Postal Service's filings in this 
consolidated proceeding (along with the concomitantly filed notices in 
Docket Nos. CP2008-4 and CP2008-5) represent the Postal Service's first 
filings involving competitive rates not of general applicability under 
section 3632(b)(3) of title 39, the Commission will proceed as if the 
Inbound EMS agreement also had been filed pursuant to 39 CFR part 3020, 
subpart B and will review the consolidated dockets pursuant to rule 
3020.34.\5\
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    \5\ Filings to change or add rates not of general applicability 
are properly made under rule 3015.5. Postal Service filings to 
modify the product lists are properly made under part 3020, subpart 
B. Filings involving negotiated service agreements implicate both 
sets of rules until such time that a group of negotiated service 
agreements are shown to be classified properly as one product. The 
Commission anticipates that with experience and the adoption of the 
MCS the review process will proceed relatively quickly.
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    The Postal Service's filing in Docket No. CP2008-6 is styled as 
applicable to Inbound EMS. So, too, is the negotiated agreement filed 
in Docket No. CP2008-7. To that extent, both are consistent with 
language it proposed for inclusion in the draft MCS in its November 20 
Filing. In Order No. 43, the Commission listed inbound and outbound 
international expedited services as separate products. The Commission 
has made no determination, however, whether the outbound portion of the 
agreement in Docket No. CP2008-7 is subject to its review.
    Agreements with foreign posts present unique issues that have not 
yet been fully briefed. In its November 20 Filing, the Postal Service 
contended that the outbound portion of agreements with foreign posts 
``does not properly belong in the MCS'' because the outbound portion 
reflects a payment by the Postal Service for processing and delivery by 
foreign posts and not what the Postal Service charges for its services. 
November 20 Filing at 10.
    The Postal Service's filings also raise issues concerning the 
treatment of confidential information, a broad topic that may require 
different solutions tailored to the specifics of each case. For 
instance, agreements with foreign posts may require different treatment 
than agreements with private entities (corporations, businesses, etc.). 
Agreements concerning competitive products may require different 
treatment than agreements concerning market dominant products. A common 
issue, however, is how individual agreements (contracts) are to be 
identified in the Mail Classification Schedule. For agreements with 
foreign posts involving competitive products, the Commission proposes, 
at a minimum, identifying each international mail agreement by the 
name(s) of the foreign post(s), the mail product(s) involved, and the 
agreement's expiration date.
    The Commission assumes that the Postal Service has or will have 
agreements with many if not most foreign posts. Thus, with the 
potential for many agreements, some compelling justification for 
keeping the identity of the foreign posts confidential is warranted. To 
elaborate briefly in this proceeding, the Postal Service contends that 
the identities of the foreign posts with which it executes bilateral/
multilateral agreements should not be disclosed, arguing generally that 
foreign posts' ability to negotiate with other posts could be 
compromised by public disclosure. Pricing Notice at 1. Absent more, 
this rationale would not appear to justify concealing the identity of 
foreign posts in proceedings before the Commission. The Postal Service 
should amplify on the rationale for its position, including addressing 
the putative harm associated with public disclosure.
    The Commission has observed that typical international mail 
agreements are of approximately one year duration (with possible 
provisions for renewal). Absent justification, there would appear to be 
no compelling need to keep expiration dates confidential. Thus, in its 
comments, the Postal Service should also address the issue of including 
the expiration date of each agreement in the MCS, as well as 
identifying the product. Comments addressing these points are due no 
later than June 10, 2008.
    Interested persons may comment on issues in this consolidated 
proceeding, including whether the Postal Service filings are consistent 
with the policies of sections 3632, 3633, or 3642. Comments are due no 
later than June 16, 2008.
    Pursuant to 39 U.S.C. 505, Paul L. Harrington is appointed to serve 
as officer of the Commission (Public Representative) to represent the 
interests of the general public in the above-captioned docket.
    It is ordered:
    1. The proceedings in Docket Nos. CP2008-6 and CP2008-7 are 
consolidated. All future filings in the consolidated docket are to be 
made under Docket No. CP2008-7.
    2. As set forth in the body of this order, the Postal Service 
comments on confidentiality are due no latter than June 10, 2008.
    3. Comments on issues in this consolidated proceeding from 
interested persons are due no later than June 16, 2008.
    4. The Commission appoints Paul L. Harrington as Public 
Representative to represent the interests of the general public in this 
proceeding.
    5. The Secretary shall arrange for publication of this notice and 
order in the Federal Register.

    By the Commission.
Steven W. Williams,
Secretary.
 [FR Doc. E8-12764 Filed 6-5-08; 8:45 am]

BILLING CODE 7710-FW-P