[Federal Register Volume 69, Number 222 (Thursday, November 18, 2004)]
[Proposed Rules]
[Pages 67514-67528]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-25567]


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POSTAL RATE COMMISSION

39 CFR Part 3001

[Docket No. RM2004-1; Order No. 1424]


Definition of Postal Service

AGENCY: Postal Rate Commission.

ACTION: Proposed rule.

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SUMMARY: This document addresses a proposal to add a definition of the 
term ``postal service'' to the rules of practice. This proposal is 
prompted by the Postal Service's action with respect to nonpostal 
initiatives. There is often controversy and uncertainty regarding the 
postal character of the services provided under those initiatives. The 
proposed definition is intended to provide guidance to the Postal 
Service and the general public concerning services that are subject to 
sections 3622 and 3623 of the Postal Reorganization Act.

DATES: 1. Deadline for filing initial comments: December 15, 2004.
    2. Deadline for filing reply comments: January 12, 2004.

ADDRESSES: File all documents referred to in this order electronically 
via the Commission's Filing Online system at http://www.prc.gov.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, (202) 789-6818.

SUPPLEMENTARY INFORMATION:

Regulatory History

    69 FR 3288, January 23, 2004.
    69 FR 11353, March 10, 2004.

I. Introduction and Summary

    In Order No. 1389, the Commission proposed to amend its rules of 
practice and procedure to include a definition of the term ``postal 
service.'' \1\ The postal character of a spate of relatively new 
services initiated unilaterally by the Postal Service is uncertain and 
the issue whether a service is postal or nonpostal has become 
increasingly controversial. Consequently, the Commission proposed to 
codify a definition of the term ``postal service'' in its rules to 
provide guidance to the Postal Service and the public for evaluating 
what falls within the scope of sections 3622 and

[[Page 67515]]

3623 of the Postal Reorganization Act (PRA).
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    \1\ See Proposed Rulemaking Concerning Amendment to the Rules of 
Practice and Procedure, PRC Order No. 1389, January 16, 2004.
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    Specifically, the Commission proposed to amend its rules by 
including the following definition: Postal service means the delivery 
of letters, printed matter, or packages weighing up to 70 pounds, 
including acceptance, collection, processing, transmission, or other 
services supportive or ancillary thereto.\2\ Interested persons were 
invited to submit comments on the proposed rule.
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    \2\ Id. at 12.
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    No commenter, including the Postal Service, challenges the 
Commission's authority to adopt a definition of the term postal 
service. Under the Postal Service's construction of the Act, however, 
adopting a definition would essentially be an empty gesture since it 
contends that the Commission lacks the authority to determine the scope 
of its own jurisdiction. Under its theory, any service or product it 
unilaterally declares not to be a postal service is beyond the 
Commission's jurisdiction.\3\ Thus, under its interpretation, the 
Postal Service becomes the arbiter of all things postal.
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    \3\ See Initial Comments of the United States Postal Service, 
March 15, 2004, at 2-3 (Postal Service Initial Comments).
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    The Commission rejects the claim that it cannot determine the scope 
of its own jurisdiction. The law on this point is well settled. ``[T]he 
agency entitled to deference in the interpretation of 39 U.S.C. 3622-24 
is the Rate Commission--not the Postal Service--as it is the Rate 
Commission which is charged with making recommended decisions on 
changes in rates and mail classification.'' \4\ Unilateral Postal 
Service actions do not determine the scope of the Commission's 
jurisdiction over postal services. Management's initial 
characterization of a service as postal or not, a prerequisite under 
the Act, is not dispositive of the Commission's jurisdiction. Analysis 
of the statute, legislative history, and precedent confirms that the 
Postal Service is not free to engage in unfettered commercial 
activities under the guise that they are nonpostal.
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    \4\ United Parcel Service v. U.S. Postal Service, 604 F.2d 1370, 
1381 (3rd Cir. 1979), cert. denied, 446 U.S. 957 (1980).
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    In its comments, the Postal Service argues that the Commission's 
definition of the term postal services imposes no limits on its 
authority under the Act.\5\ The Commission does not disagree. The 
proposed rule in no way restricts the types of services, postal or 
otherwise, that the Postal Service may wish to offer. It is free to 
offer whatever services it chooses subject to the requirements of the 
Act. For those that are postal services, within the meaning of the 
proposed rule, the Postal Service has an obligation to request a 
recommended decision before commencing service or charging rates. 
Nothing in the proposed rule affects the lawfulness of Postal Service 
products or services that are not postal.\6\
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    \5\ Postal Service Initial Comments at 3.
    \6\ To clarify, the Commission takes no position on services 
offered by the Postal Service that fall outside the proposed 
definition.
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    While most commenters support the idea that the term postal service 
be defined, there is no unanimity on the definition. The diversity of 
views expressed has helped crystallize the Commission's thinking about 
the issues. It is apparent that continuation of the status quo is not 
in the public interest. On numerous, recent occasions, parties have 
challenged the legitimacy of the Postal Service's claim that various 
services, offered unilaterally pursuant to section 404(a)(6), are not 
postal services. The jurisdictional implications of these services, 
which have become increasingly controversial, are most efficaciously 
addressed by rule rather than on an ad hoc basis. Comments by 
competitors demonstrate that many of these services offered 
unilaterally by the Postal Service have a substantial public effect. 
Accordingly, the Commission believes that it is appropriate to include 
a definition of the term postal service in its rules.
    Based on a thorough consideration of the comments, however, the 
Commission has determined not to adopt either its initial proposal or 
any suggested in the comments. Instead, the Commission concludes that 
it would be preferable to define the term postal service by reference 
to the Postal Service's statutory duties rather than as initially 
proposed or as specifically suggested by any commenter. The rule 
proposed herein represents an improvement over that proposed in Order 
No. 1389 since it makes the Service's ``postal service'' duties the 
touchstone of the definition rather than any specific activities the 
Postal Service may or may not perform.
    The revised definition reads as follows: Postal service means the 
receipt, transmission, or delivery by the Postal Service of 
correspondence, including, but not limited to, letters, printed matter, 
and like materials; mailable packages; or other services supportive or 
ancillary thereto. Because the definition focuses on the Postal 
Service's statutory functions, the proposed definition is 
distinguishable from that proposed in Order No. 1389. A major 
distinction is that the revised definition covers certain electronic 
services offered by the Postal Service, a result urged by several 
commenters. The Commission's decision to include certain electronic 
services is grounded on the statute and legislative history, both of 
which contemplate the use of technological advances in the provision of 
postal services. Nevertheless, inclusion of these services in the 
definition should not be read as a conclusion that all such services 
are jurisdictional; only such services that entail correspondence 
become postal services.
    In lieu of adopting the foregoing definition now, the Commission 
will provide interested persons an opportunity to comment on the 
revised proposed rule. While not required under the Administrative 
Procedure Act, the additional comment period is deemed appropriate to 
assure that the impact of the rule is carefully considered and fully 
understood. Comments are due December 15, 2004. Reply comments may be 
filed on or before January 12, 2005.

II. Background

    Two rulemakings pending before the Commission are companion 
proceedings, designed to define postal services on the one hand, Docket 
No. RM2004-1, and reporting requirements for nonpostal services on the 
other, Docket No. RM2004-2. In Order No. 1389, against the backdrop of 
an array of new services offered unilaterally by the Postal Service, 
the Commission reviewed both judicial and Commission precedent 
concerning the meaning, for jurisdictional purposes, of the term postal 
service.\7\ This review demonstrated that the postal character of these 
new services was unsettled, causing needless confusion and increasing 
controversy. Consequently, to address the issue, the Commission 
proposed to define the term postal service and provided interested 
persons an opportunity to comment on the proposed definition.\8\
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    \7\ See PRC Order No. 1389, supra, at 1-8.
    \8\ Id. at 12-16.

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[[Page 67516]]

    Seven sets of initial comments \9\ and four sets of reply comments 
\10\ were filed. These comments, addressed in detail below, advocate a 
variety of different perspectives. Four, the Association for Postal 
Commerce (PostCom),\11\ the Office of the Consumer Advocate and 
Consumer Action (OCA/CA), United Parcel Service (UPS), and the Postal 
Service, suggest revisions to the Commission's proposed definition. 
Two, Parcel Shippers Association (PSA) and Pitney Bowes, Inc. (Pitney 
Bowes), endorse the proposed definition, albeit for different reasons; 
and one, Lifetime Addressing, supports OCA/CA's proposal.
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    \9\ Comments of Lifetime Addressing, Inc. Pursuant to Commission 
Order No. 1389, March 16, 2004 (Lifetime Addressing Comments); 
Office of the Consumer Advocate and Consumer Action Comments on 
Proposed Amendment to the Commission's Rules of Practice and 
Procedure, March 15, 2004 (Joint Initial Comments); Comments of the 
Parcel Shippers Association to the Proposed Rulemaking Concerning 
Amendment to the Rules of Practice and Procedure, March 15, 2004 
(PSA Comments); Comments of Pitney Bowes Inc., March 15, 2004 
(Pitney Bowes Comments); PostCom Comments on Proposed Rulemaking 
Concerning Amendment to the Rules of Practice and Procedure, March 
1, 2004 (PostCom Initial Comments); Comments of United Parcel 
Service in Support of Proposed Rule, March 9, 2004 (UPS Comments); 
Postal Service Initial Comments, supra, March 15, 2004.
    \10\ Reply Comments of Lifetime Addressing, Inc., April 15, 2004 
(Lifetime Addressing Reply Comments); Office of the Consumer 
Advocate and Consumer Action Reply Comments on Proposed Amendment to 
the Commission's Rules of Practice and Procedure, April 15, 2004 
(Joint Reply Comments); PostCom Reply Comments on the Proposed 
Rulemaking Concerning the Definition of ``Postal Service,'' April 
15, 2004 (PostCom Reply Comments); and Reply Comments of the United 
States Postal Service, April 15, 2004 (Postal Service Reply 
Comments).
    \11\ PostCom's suggestion was offered as an alternative to its 
principal recommendation that the Commission not adopt a definition 
of the term postal service in this proceeding. PostCom Initial 
Comments at 1-2.
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    The principal legal issues in this proceeding are the Postal 
Service's contention that the Commission lacks authority to determine 
the scope of its own jurisdiction and OCA/CA's claim that nonpostal 
services mean only those services provided by the Postal Service on 
behalf of other government agencies.
    Docket No. RM2004-2, like this proceeding an outgrowth of Docket 
*2003, was initiated to consider the effects, if any, of non-
jurisdictional services on jurisdictional rates.\12\ Nonpostal services 
are a subset of non-jurisdictional services. In tandem, the two 
rulemakings are complementary, addressing opposite sides of the same 
coin.
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    \12\ See PRC Order No. 1394, March 5, 2004.
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    In this proceeding, OCA/CA, citing the interrelationship between 
the two dockets, urge the Commission to define the term nonpostal (as 
they interpret it) in this proceeding, essentially preempting the 
proposed amendment to rule 54 in Docket No. RM2004-2.\13\ In addition, 
OCA/CA propose that the Commission not employ the term nonpostal to 
identify services subject to the proposed reporting requirements in 
Docket No. RM2004-2.\14\
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    \13\ Joint Initial Comments, supra, at 15.
    \14\ Ibid.
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    Lastly, since this proceeding commenced, two complaints have been 
filed with the Commission alleging that the Postal Service is providing 
postal services without first obtaining a recommended decision from the 
Commission.\15\ While not bearing directly on this proceeding, these 
complaints, particularly Docket No. C2004-2, underscore the continuing 
controversy and uncertainty surrounding the Postal Service's unilateral 
actions.
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    \15\ See Complaint on Electronic Postmark, Docket No. C2004-2 
and Complaint on Stamped Stationery, Docket No. C2004-3.
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III. Commission Authority

    Section 3603 of the PRA authorizes the Commission to adopt ``rules 
and regulations and establish procedures, subject to chapters 5 and 7 
of Title 5, and take any other action they deem necessary and proper to 
carry out their functions and obligations to the Government of the 
United States and the people as prescribed under this chapter.'' 39 
U.S.C. 3603. No commenter disputes the Commission's authority to adopt 
a definition of the term postal service. The Postal Service, however, 
construes the Act in a manner that renders the exercise largely 
meaningless.
    As a preface to its comments on the proposed rule, the Postal 
Service, referencing its comments in Docket *2003, reiterates its 
position that the Commission lacks authority to determine the scope of 
its own jurisdiction under Chapter 36 of the PRA.\16\ It asserts that 
``the Postal Service would not in any way be bound by [the proposed] 
definition'' concerning its determination of whether a service is 
postal or nonpostal.\17\ Under this theory, its unilateral declaration 
of whether any product or service is or is not a postal service is 
determinative. Thus, under the Postal Service's interpretation, the 
Commission's jurisdiction is based not on its own consideration of the 
facts as applicable to the rate and classification factors of the Act, 
but rather on what the Postal Service unilaterally determines to be 
postal. The Postal Service's position is wholly without merit.
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    \16\ Postal Service Initial Comments at 1-2.
    \17\ Id. at 3; see also Postal Service Reply Comments at 8-9.
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    The Commission concludes that it has the primary responsibility for 
interpreting whether services offered or proposed by the Postal Service 
are subject to chapter 36 of the Act.\18\ The Postal Service, but no 
other commenter, disagrees.\19\ This dichotomy prompts several 
observations. The Postal Service argues that a Commission definition of 
the term postal service imposes no limits on its authority under the 
Act.\20\ The Commission does not disagree. The rule in no way restricts 
the types of service, postal or otherwise, that the Postal Service may 
wish to offer. The Postal Service is free to offer whatever services or 
products it wishes subject to the strictures of the Act. However, for 
those that are postal services, as defined by the Commission, the 
Postal Service has an obligation to obtain a recommended decision 
before commencing a service or charging the public.
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    \18\ See, e.g., PRC Op. R74-1, Vol. 2, Appendix F; PRC Op. R76-
1, Vol. 1, at 263 et seq., and Vol. 2, Appendix F; PRC Order No. 
1239, May 3, 1999, at 9-14; see also United Parcel Service v. U.S. 
Postal Service, 604 F.2d 1370, 1381 (3rd Cir. 1979), cert. denied, 
446 U.S. 957 (1980).
    \19\ See Postal Service Initial Comments at 2. As a general 
matter, the Postal Service referred to its comments in Docket *2003 
in lieu of restating its position.
    \20\ Id. at 3. In comments in Docket *2003, the Postal Service 
cast the argument, in part, as the Commission's authority to 
determine the legal status of nonpostal services. Comments of United 
States Postal Service on Consumer Action Petition, Docket *2003, 
January 30, 2003, at 12-13.
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    The Act mandates that the Postal Service, to the extent it wishes 
to provide a postal service, submit a request to the Commission for a 
recommended decision on changes in the mail classification schedule. 
Management's initial characterization of a service as postal or not 
neither deprives the Commission of jurisdiction over postal services 
nor precludes Commission review, on complaint or otherwise, for 
purposes of determining its statutory jurisdiction. Such review does 
not impinge on management's prerogatives in a manner not contemplated 
by the Act. ``The very existence and function of the Postal Rate 
Commission bespeaks a limitation on postal management's freedom.'' \21\
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    \21\ United Parcel Service v. U.S. Postal Service, 455 F. Supp. 
857, 869 (E.D. Pa. 1978), aff'd, 604 F.2d 1370 (3d Cir. 1979), cert. 
denied, 446 U.S. 957 (1980).
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    Furthermore, it is well settled that in matters involving rates and 
mail classifications the Commission's interpretation is entitled to 
deference. Federal courts have rejected the Postal Service's argument 
that its

[[Page 67517]]

interpretation of the Act deserves deference. ``[I]t was recognized 
there, [in NAGCP v. USPS, 569 F.2d 570 (DC Cir. 1976)] as we do here, 
that the agency entitled to deference in the interpretation of 39 
U.S.C. 3622-24 is the Rate Commission--not the Postal Service--as it is 
the Rate Commission which is charged with making recommended decisions 
on changes in rates and mail classification.'' \22\
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    \22\ United Parcel Service v. U.S. Postal Service, 604 F.2d 
1370, 1381 (3d Cir. 1979), cert. denied, 446 U.S. 957 (1980). 
Regarding the general principle that an agency's interpretation of 
its jurisdiction is entitled to deference, see Chevron U.S.A., Inc. 
v. Natural Resources Defense Council, 467 U.S. 837, 842-44 (1984); 
Transmission Access Policy Study Group v. Federal Energy Regulatory 
Commission, 225 F.3d 667, 694 (DC Cir. 2000) (``It is the law of 
this circuit that the deferential standard of [Chevron] applies to 
an agency's interpretation of its own statutory jurisdiction.''); 
and Oklahoma Natural Gas Company v. Federal Energy Regulatory 
Commission, 28 F.3d 1281, 1283 (DC Cir. 1994).
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    Moreover, the Postal Service's construction ignores a wealth of 
judicial precedent addressing the division of responsibility under the 
Act between the Postal Service and the Commission that makes it plain 
that rate and classification authority vests with the Commission. For 
example, in National Association of Greeting Card Publishers v. U.S. 
Postal Service, 462 U.S. 810, 821 (1983), the Supreme Court found:

Although the Postal Reorganization Act divides ratemaking 
responsibility between two agencies, the legislative history 
demonstrates `that ratemaking * * * authority [was] vested primarily 
in [the] Postal Rate Commission.' S. Rep. No. 91-912, p. 4 (1970) 
(Senate Report); see Time, Inc. v. USPS, 685 F.2d 760, 771 (CA2 
1982); Newsweek, Inc. v. USPS, 663 F.2d, at 1200-1201; NAGCP III, 
197 U.S. App. DC, at 87, 607 F.2d, at 401. The structure of the Act 
supports this view. While the Postal Service has final 
responsibility for guaranteeing that total revenues equal total 
costs, the Rate Commission determines the proportion of the revenue 
that should be raised by each class of mail. In so doing, the Rate 
Commission applies the factors listed in Sec.  3622(b). Its 
interpretation of that statute is due deference. See Time, Inc. v. 
USPS, 685 F.2d, at 771; United Parcel Service, Inc. v. USPS, 604 F. 
2d 1370, 1381 (CA3 1979), cert. denied, 446 U.S. 957 (1980).

    Specifically mindful of the bifurcation of authority under the Act, 
the court, in United Parcel Service, supra, concluded: \23\
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    \23\ United Parcel Service, supra, 455 F. Supp. at 869.

The Commission's existence insures that an agency independent of the 
Postal Service will provide for public notice and hearing input of 
those affected by the proposed action and full and on the record, 
see 39 U.S.C. Sec.  3624(a), consideration of pertinent factors and 
congressionally imposed goals before certain types of decisions are 
made.

IV. The Provision of Postal Services Is the Service's Core Mission

A. Grants of Authority Under the Act
    Although the PRA does not define the term ``postal services,'' it 
is clear that ``postal services'' are central to the Postal Service's 
mission. The point is underscored by the very first section of the Act: 
``The Postal Service shall have as its basic function the obligation to 
provide postal services to bind the Nation together through the 
personal, educational, literary, and business correspondence of the 
people.'' 39 U.S.C. 101(a). The Postal Service is explicitly directed 
to ``plan, develop, promote, and provide adequate and efficient postal 
services at fair and reasonable rates and fees.'' 39 U.S.C. 403(a).
    The Postal Service performs a variety of activities; some clearly 
relate to its obligation to provide postal services, while others do 
not. Some have jurisdictional implications; others do not. By statute, 
the Postal Service has a monopoly over the carriage of letters. 39 
U.S.C. 601.\24\ The monopoly, however, does not limit ``postal 
services'' provided by the Service to the carriage of letters (or 
services ancillary thereto). Incontestably, the Postal Service's 
carriage of mail not subject to the monopoly, such as packages and 
printed matter, is a ``postal service.'' Merely because such mail is 
outside the scope of the monopoly does not render such service 
``nonpostal.'' \25\
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    \24\ Prior to the passage of the Private Express Statutes in 
1845, intercity delivery services were offered by private carriers, 
principally railroads and steamboats. Private carriers operated 
within cities until barred by the Postal Code of 1872. Cato Handbook 
for Congress, http://www.cato.org/pubs/handbook/hb105-34.html.
    \25\ While no party suggests to the contrary, Parcel Shippers 
Association, perhaps out of caution, addresses the point, expressing 
relief that the Commission's proposed definition encompasses 
packages. PSA Comments at 2.
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    The Postal Service's authority to engage in other activities also 
informs the scope of its core mission regarding postal services. These 
include authority to provide special, philatelic, international, and 
nonpostal services. It is well settled that special services, 
authorized by section 404(a)(6) of the Act, are postal services subject 
to the Commission's rate and classification jurisdiction. In Associated 
Third Class Mail Users v. U.S. Postal Service, 405 F. Supp. 1109 
(D.D.C. 1975) (ATCMU), the court (J. Sirica) enjoined the Postal 
Service's unilateral attempt to increase fees for certain special 
services.\26\ The Postal Service argued that the phrase ``fee or fees 
for postal services'' in section 3622 applied only to certain annual 
mailing or permit fees and not to special services. In rejecting the 
Postal Service's argument that section 404(a)(6) authorized it to 
proceed without first requesting a recommended decision from the 
Commission, the court held that ``the term `postal services' was meant 
to embrace also those special and other services which are the subject 
of this litigation.'' \27\ The court's finding that the special and 
other services were postal services was based on the ``common meaning'' 
of the term.\28\ This finding was colored by two considerations. First, 
it observed that, with the possible exception of money orders, ``nearly 
all of these other services are very closely related to the delivery of 
mail.'' \29\ Second, the court held, ``[i]t is also clear that the fees 
set for these services have substantial public effect.'' \30\
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    \26\ The special services included, among others, insurance, 
registry, forwarding and return service, furnishing of mailing list 
corrections, return receipt, prepayment of postage, and money 
orders. ATCMU at 1115.
    \27\ Id. at 1118.
    \28\ Id. at 1117. (``As indicated above, this interpretation 
appears to accord quite well with the common meaning of the term 
`postal services.' '')
    \29\ Id. at 1115. Observing that the majority of money orders 
sold at post offices were sent by mail, the court concluded that 
``[t]herefore, it appears safe to say that all of these services 
would be considered `postal services' in ordinary parlance.''
    \30\ Ibid.
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    The Court of Appeals, without adopting all of its reasoning, found 
the district court's interpretation of the Act persuasive. National 
Association of Greeting Card Publishers v. U.S. Postal Service, 569 
F.2d 570, 595 (DC Cir. 1976), vacated on other grounds, 434 U.S. 884 
(1977) (NAGCP I). The DC Circuit's discussion is instructive on several 
levels. First, it agreed that a ``plain reading'' of section 3622 is 
proper, concluding that `` `postal services' as used there is a generic 
term and was meant to include all the special services here at issue.'' 
\31\ Second, finding the Postal Service's construction of the Act 
``wholly unconvincing,'' the court held, ``[b]ut most of all, any 
reasonable examination of the purposes of the Act discloses Congress' 
implicit design that the distinct functions of service provision and 
rate adjustment be divided between the Postal Service and the Rate 
Commission.'' \32\ Third, the court also relied on the legislative 
history to conclude that repeal of the Postmaster General's prior 
authority to establish special service fees unilaterally was not 
inadvertent.\33\

[[Page 67518]]

Finally, at the outset of its discussion, the court suggests an 
alternate theory available to the district court. Noting that the 
Commission ``advances an interpretation of the Act quite at odds with 
that of the Service and fully in accord with the conclusion reached by 
the district court,'' the Court of Appeals states that ``[t]he district 
court, in short, without expressly stating so might simply have 
deferred to the long-held and reasonable interpretation given the 
statute by the very agency whose jurisdiction is at issue.'' \34\
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    \31\ NAGCP I at 596-97.
    \32\ Id. at 597.
    \33\ Id. at 597-98.
    \34\ Id. at 595, n.110.
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    The Commission's first substantive opportunity to address the 
jurisdictional implications of various special and other services 
occurred in Docket No. R76-1 following the ATCMU opinion.\35\ While it 
discussed in detail the principles governing the scope of its 
jurisdiction regarding the services at issue in a separate 
appendix,\36\ the Commission briefly restated its conclusions, 
providing a succinct definition.
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    \35\ Previously, the Commission had addressed and asserted its 
jurisdiction over changes in fees for special services in Docket No. 
R74-1. See PRC Op. R74-1, Vol. 2, Appendix F.
    \36\ See PRC Op. R76-1, Vol. 2, Appendix F.

Special postal services--that is, those which fall within the ambit 
of Sec.  3622--are services other than the actual carriage of mail 
but supportive or auxiliary thereto. They enhance the value of 
service rendered under one of the substantive mail classes by 
providing such features as added security, added convenience or 
speed, indemnity against loss, correct information as to the current 
address of a recipient, etc.\37\
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    \37\ PRC Op. R76-1, Vol. 1, at 266-67 (footnote omitted).

    Although none of the three remaining specific grants of power is 
defined in the Act, two are readily distinguishable because each is 
limited by the types of service that could possibly be offered. 
Philatelic services, section 404(a)(5), relate exclusively to 
philately; international mail, section 407, exclusively involves 
service between or among countries. There is no real controversy over 
what each service entails or, for that matter, whether either could be 
considered a jurisdictional postal service.\38\ That is not the case 
concerning the Postal Service's authority to provide nonpostal 
services.
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    \38\ In Docket No. R76-1, the Commission found that the sale of 
philatelic products was not within its jurisdiction. PRC Op. R76-1, 
Vol. 2, Appendix F at 19-20; see also PRC Order No. 1075, September 
11, 1995. Likewise, the Commission's rate jurisdiction does not 
extend to international mail. PRC Op. R76-1, Vol. 2, Appendix F at 
17; PRC Op. R90-1, Vol. 1, para. 2105; see also Air Courier 
Conference of America/International Committee v. U.S. Postal 
Service, 959 F.2d 1213 (3rd Cir. 1992).
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B. OCA/CA's Definition of the Term Nonpostal Is Flawed
    Parties dispute the meaning of the term as well as the Postal 
Service's authority to provide certain services without prior 
Commission review. OCA/CA argue that ``nonpostal'' is a term of art 
under the statute limited to services provided by the Postal Service to 
other governmental agencies for which it is reimbursed.\39\ They ask 
the Commission to reconsider its prior determinations that `` 
`nonpostal' products and services can be commercial in nature.'' \40\
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    \39\ Joint Initial Comments, supra, at 9. PostCom appears to 
agree with this position although not with OCA/CA's proposal. 
PostCom Reply Comments, supra, at 3-4.
    \40\ Joint Initial Comments at 9; see also id. at 11-12, and 15.
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    In support of their position, OCA/CA cite the preexisting statute, 
the Kappel Commission Report, The United States Postal Service by 
Gerald Cullinan, and ATCMU. OCA/CA begin by pointing to section 2303 of 
former title 39, which references ``nonpostal services, such as the 
sale of documentary stamps for the Department of the Treasury.'' They 
argue that this reference indicates, as manifest by the legislative 
history, that the term ``nonpostal'' is limited to services provided by 
the Postal Service to other governmental agencies.\41\ As confirmation, 
they cite the Kappel Commission Report's mention of nonpostal services 
within its larger discussion of ``public service'' costs.\42\ In 
addition, OCA/CA rely on the discussion of ``nonpostal functions'' 
found in The United States Postal Service.\43\ Cullinan indicates that 
during World War I, the Post Office performed various war-related 
nonpostal functions, including selling Liberty bonds, war savings 
certificates, and registering enemy aliens.\44\ In addition to these 
major nonpostal functions, the Post Office, over time, assumed various 
minor Federal functions as well. These included: alien address 
reporting, sale of U.S. savings bonds, sale of documentary and 
migratory-bird stamps, maintenance of wanted posters issued by the 
Federal Bureau of Investigation, and receiving and transmitting funds 
for volunteer charities such as the March of Dimes.\45\
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    \41\ Id. at 10.
    \42\ Ibid. In its discussion of public service costs 
(subsidies), the Kappel Commission included ``unreimbursed non-
postal services'' which it described as ``some relatively small but 
widespread services rendered to other Government agencies (e.g., 
providing space for Civil Service examinations).'' Kappel Commission 
Report at 137.
    \43\ Joint Initial Comments at 10.
    \44\ G. Cullinan, The United States Postal Service (1973) at 
196.
    \45\ Id. at 198.
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    Lastly, OCA/CA cite as most significant Judge Sirica's comment 
concerning the likely meaning of the term nonpostal.\46\ Prefacing his 
comment with the observation that the exact meaning of nonpostal was 
uncertain, Judge Sirica stated that it likely encompassed activities 
such as selling U.S. savings bonds, maintaining an information service 
for civil service exams for government jobs, and conducting 
examinations for the Civil Service Commission.\47\
---------------------------------------------------------------------------

    \46\ Joint Initial Comments at 11.
    \47\ ATCMU, supra, at 1117, n.3.
---------------------------------------------------------------------------

    Relatively early in its institutional history, the Commission 
characterized certain services provided by the Postal Service as 
nonpostal. Once the jurisdictional issue over special services was 
joined in Docket No. R76-1, the Postal Service submitted a lengthy list 
of services it provided apart from the carriage of mail.\48\
---------------------------------------------------------------------------

    \48\ Docket No. R76-1, Tr. 4/503-08.
---------------------------------------------------------------------------

    The list included an assortment of services provided by the Postal 
Service, including those styled as follows:
    <bullet> Domestic ancillary services, e.g., address correction, 
certified mail, insurance;
    <bullet> International ancillary services, e.g., inquiry fee, 
storage charges, registry;
    <bullet> Special user charges, e.g., on-site meter settings, sale 
of philatelic products, photocopying service;
    <bullet> Services performed for other government agencies, e.g., 
passport applications, food stamps, civil defense;
    <bullet> Community type services, i.e., bulletin boards and 
postmasters in Alaska as notaries public; and
    <bullet> Services for which a charge could be made, e.g., demurrage 
charge, meter license.
    Prior to considering the jurisdictional status of each service, the 
Commission distinguished between services provided by the Postal 
Service to the public and those it performed for other federal 
agencies. The Commission indicated that the latter included services 
such as ``the distribution of migratory bird hunting stamps, the 
registration of aliens, and various forms of assistance to the Civil 
Service Commission.'' \49\ Concerning such services, the Commission 
concluded that ``[i]t is clear that they are in no sense `postal' 
services, and we conclude that they are outside the ambit of Sec.  
3622.'' \50\
---------------------------------------------------------------------------

    \49\ PRC Op. R76-1, Vol. 2, Appendix F at 2.
    \50\ Ibid.
---------------------------------------------------------------------------

    The Commission assessed each service based on its relationship to 
the

[[Page 67519]]

carriage of mail. ``Those which can fairly be said to be ancillary to 
the collection, transmission, or delivery of mail are postal services 
within the meaning of Sec.  3622.'' \51\ Among other things, the 
Commission found several special user charges were not jurisdictional, 
including the sale of philatelic products, photocopy service, record 
retrieval, the sale of postal related products, and vending stands and 
vending machines.\52\ In addition, the Commission disclaimed 
jurisdiction over community type services, specifically characterizing 
the provision of notary public services as ``clearly non-postal.'' \53\
---------------------------------------------------------------------------

    \51\ Id. at 3.
    \52\ Id. at 18-25.
    \53\ Id. at 25. The Commission also found that international 
ancillary services were beyond its jurisdiction. Id. at 17. It did 
not substantively address the final category, services for which a 
charge could be made. Id. at 25-26.
---------------------------------------------------------------------------

    The Commission's consideration of box rentals (lockbox service) in 
Docket R76-1 merits particular mention because, in addition to arguing 
that lockbox service was a special or similar service wholly within its 
authority, the Postal Service contended that box rentals were not 
``postal services'' within the meaning of section 3622.\54\ The Postal 
Service argued that lockbox service simply enabled a customer to use 
Postal Service property pursuant to a rental agreement. It 
characterized lockboxes as `` `a premium service to any customer who, 
for his own convenience, desires more than basic free delivery.' '' 
\55\ Furthermore, stating that the Commission's authority ``extends 
only to `postal services' '' and characterizing the complaint as 
limited to postal services, the Postal Service asserted that the 
Commission lacked authority to hear the complaint.\56\ Rejecting the 
Postal Service's argument, the Commission found that box rentals are 
closely related to the delivery of mail and, further, satisfy the 
criteria established for jurisdictional special services.\57\
---------------------------------------------------------------------------

    \54\ PRC Op. R76-1, Vol. 1 at 281-82. The Postal Service's 
unilateral fee increase for box rentals was the subject of a 
separate complaint filed in July 1975. See Complaint of Stephen 
Moses, Docket No. C76-1. In its answer to the complaint, the Postal 
Service advanced similar arguments to those considered and rejected 
by the court in ATCMU. Docket No. C76-1 was terminated with the 
issues raised by the complaint transferred to the rate proceeding, 
Docket No. R76-1. PRC Order No. 85, October 9, 1975.
    \55\ PRC Op. R76-1, Vol. 1 at 282 (footnote omitted).
    \56\ United States Postal Service Answer to Complaint, Docket 
No. C76-1, August 11, 1975, at 3-4.
    \57\ PRC Op. R76-1, Vol. 1, at 282-83.
---------------------------------------------------------------------------

    In addition to its analysis in Docket No. R76-1 Appendix F, the 
Commission summarized its findings in the main body of its opinion, 
stating that ``[m]any of these services are clearly nonpostal in 
character.'' \58\ Thus, early on, the Commission found that its 
jurisdiction did not extend to what it characterized as nonpostal 
services, including in that rubric services other than those provided 
to other governmental agencies. OCA/CA would have the Commission adopt 
a narrow definition of the term limited to services performed by the 
Postal Service for other government agencies. Any other service 
provided by the Postal Service would, according to OCA/CA, be a postal 
service and thus subject to the Commission's rate and classification 
jurisdiction.
---------------------------------------------------------------------------

    \58\ Id. at 266.
---------------------------------------------------------------------------

    The Commission is unpersuaded by the arguments advanced by OCA/
CA.\59\ To be sure, nonpostal includes services provided by the Postal 
Service for other agencies, but even if limited as suggested by OCA/CA, 
the result would not cause all other activities to necessarily be 
considered postal. Historically, the Postal Service has performed 
various minor, miscellaneous services, including photocopying and 
community type services (maintaining bulletin boards and notaries 
public). Any claim that these services were postal would be tenuous at 
best. Rather, such services are provided more as a convenience to 
postal patrons than as commercial endeavors. Thus, for example, copying 
service may be available in a post office lobby as a minor benefit to 
mailers, enabling them to copy miscellaneous papers prior to mailing, 
e.g., tax returns.
---------------------------------------------------------------------------

    \59\ To some degree, OCA/CA appear to operate under the 
misimpression that the Commission has concluded that the Postal 
Service may engage in commercial nonpostal activities. See Joint 
Initial Comments at 9. (``Regrettably, therefore, OCA and CA must 
ask the Commission to reconsider its determination that `nonpostal' 
products and services can be commercial in nature.'') In Order No. 
1389, the Commission expressly took no position on the Postal 
Service's claim that it had authority to provide commercial 
nonpostal services. PRC Order No. 1389, January 16, 2004, at 10. The 
phrase ``commercial nonpostal activities'' was used in Order No. 
1394 solely to clarify the term ``nonpostal service,'' not as an 
acknowledgement of their validity. PRC Order No. 1394, March 5, 
2004, at 11.
---------------------------------------------------------------------------

    The result urged by OCA/CA, that any service provided by the Postal 
Service that is not nonpostal (under their interpretation) would be 
subject to the Commission's jurisdiction, cannot be reconciled with the 
Act. Section 404(a)(6) authorizes the Postal Service ``to provide, 
establish, change, or abolish special nonpostal or similar services.'' 
39 U.S.C. 404(a)(6). OCA/CA's interpretation would render the phrase 
``similar services'' surplusage. If nonpostal is restricted to services 
provided only to other government agencies, no other service could be 
``similar,'' thereby making it meaningless.
    Conceptually, under the OCA/CA's interpretation, the Commission 
would be charged with recommending rates for any service or product 
that is not provided exclusively to other governmental agencies. Thus, 
they would have the Commission recommend rates for miscellaneous minor 
services, such as photocopying, as well as those having no evident 
connection to the Postal Service's core mission.\60\ The Commission 
does not read the statute so broadly. Had Congress intended to define 
``postal service'' as urged by OCA/CA it would have been more explicit. 
Certainly, at a minimum, Congress would have been less obtuse than to 
do so by negative inference.
---------------------------------------------------------------------------

    \60\ Without prejudging the issue, but based on representations 
to date, the Unisite Antenna program, which involves leasing space 
for wireless communications towers located on postal property, would 
appear to be such an example.
---------------------------------------------------------------------------

C. Postal Services Are Not Defined by the Postal Service's 
Interpretation of the Term Nonpostal
    At the other end of the spectrum, the Postal Service's support for 
the proposition that it is authorized to engage in unlimited 
commercial, nonpostal activities is also unconvincing.\61\ First, it 
argues that section 411 authorizes the provision of services involving 
other government agencies. The Postal Service contends that since 
section 411 does not use the term nonpostal section 404(a)(6) must 
refer ``at least to services other than those encompassed by section 
411.'' \62\ The Commission agrees that the two sections refer to 
different services. It does not follow, however, that the Postal 
Service may unilaterally make available to the public whatever 
commercial service (or product) it may wish.
---------------------------------------------------------------------------

    \61\ While the Commission's jurisdiction does not extend to 
nonpostal services, it is necessary to address the Postal Service's 
interpretation because of its jurisdictional implications concerning 
postal services.
    \62\ Comments of United States Postal Service on Consumer Action 
Petition, supra, at 15.
---------------------------------------------------------------------------

    Section 411, which is entitled ``Cooperation with Other Government 
Agencies,'' concerns the bilateral arrangements between the Postal 
Service and other federal agencies.\63\

[[Page 67520]]

These are services provided to or received from other agencies. Support 
for this is found in the statute and implementing regulations. Sections 
403 and 409 specifically reference section 411, providing examples of 
the types of bilateral arrangements permitted under the latter. For 
example, section 409(d) provides that the ``Department of Justice shall 
furnish, under section 411 of this title, the Postal Service such legal 
representation as it may require[.]'' Similarly, section 403(a) permits 
the Postal Service, pursuant to sections 406 (concerning postal 
services at armed forces installations) and 411, to enter into 
arrangements concerning its duty to receive, transmit, and deliver non-
domestic armed forces mail.
---------------------------------------------------------------------------

    \63\ Section 411 provides as follows: ``Executive agencies 
within the meaning of section 105 of title 5 and the Government 
Printing Office are authorized to furnish property, both real and 
personal, and personal and nonpersonal services to the Postal 
Service, and the Postal Service is authorized to furnish property 
and services to them. The furnishing of property and services under 
this section shall be under such terms and conditions, including 
reimbursability, as the Postal Service and the head of the agency 
concerned shall deem appropriate.''
---------------------------------------------------------------------------

    The regulations implementing section 411, 39 CFR 259.1, indicate 
that it is the Postal Service's policy to cooperate with other federal 
agencies when it will reduce the overall costs to the government. For 
its part, the Postal Service states that assistance will be provided 
``when the knowledge and abilities of postal employees are helpful.'' 
39 CFR 259.1(a). It is notable that the Postal Service uses the term 
``nonpostal'' to describe section 411 arrangements in its implementing 
regulations. 39 CFR 259.1(b). ``The Postal Service establishes 
reasonable fees and charges for nonpostal services performed for 
agencies of the Federal as well as State governments.'' ``Nonpostal'' 
fairly characterizes the nature of these services and its use in these 
regulations undercuts the Postal Service's argument that the use of the 
term ``nonpostal'' in section 404(a)(6), but not section 411, is 
significant.
    Overwhelmingly, available information supports the conclusion that, 
at a minimum, nonpostal services encompass services performed ``mainly 
for other Government agencies (e.g., sale of documentary stamps, 
provision of custodial services for building space occupied by other 
Government agencies).'' \64\ As discussed above, the Postal Service has 
historically performed other public service-type services, which, while 
not performed for another government agency, may reasonably be 
considered nonpostal in nature. Surely, in passing the PRA, Congress 
was aware of the Postal Service's extensive history of providing these 
various nonpostal services.
---------------------------------------------------------------------------

    \64\ Kappel Commission Report, Annex II, at 6-7; id. at 6-9 and 
6-10; see also Kappel Commission Report at 136-138; and section 
2303(a)(3) of former title 39, Pub. L. 86-682, September 2, 1960.
---------------------------------------------------------------------------

    The Postal Service's assertion that because Congress did not, in 
section 404(a)(6), ``explicitly exclude any type of service,'' \65\ it 
may unilaterally engage in whatever commercial, nonpostal activities it 
chooses is utterly unconvincing.
---------------------------------------------------------------------------

    \65\ Comments of United States Postal Service on Consumer Action 
Petition, supra, at 15.
---------------------------------------------------------------------------

    By the Postal Service's logic, section 404(a)(6) authorizes it to 
engage in any type of commercial, nonpostal activity. Thus, it could 
operate, for example, donut shops or car dealerships as they are 
obviously nonpostal. The Postal Service's position, like that it 
espoused regarding special services, is premised on a ``curious 
construction'' of the term as well as the Act.\66\
---------------------------------------------------------------------------

    \66\ NAGCP I, supra, 569 F.2d at 596.
---------------------------------------------------------------------------

    Congress' ``failure'' to ``explicitly exclude any type of service'' 
cannot reasonably be interpreted as authorizing the Postal Service to 
engage in an unlimited variety of commercial, nonpostal activities.\67\ 
Rather, against the historical backdrop, it is the absence of any 
authority to engage in services other than traditional activities that 
is telling. Had Congress intended such a sea change in the meaning of 
the term nonpostal surely it would have elaborated on the point. It did 
not. And what scant legislative history exists supports a narrow 
reading of the term, one consistent with the historical perspective.
---------------------------------------------------------------------------

    \67\ It is the Postal Service's assertion that it has authority 
to engage in commercial, nonpostal services. The Commission takes no 
position on that contention other than as relates to commercial, 
communication services (or products) or those ancillary thereto 
which could, upon consideration, be classified as postal.
---------------------------------------------------------------------------

    In discussing what became section 404 of the Act, the House Report 
states: ``This section catalogs the specific powers of the Postal 
Service, which powers, in conjunction with the general powers granted 
in section [401], are to be used to carry out postal service duties.'' 
\68\ Significantly, there is no mention of expanding the Postal 
Service's authority regarding nonpostal services. Instead, the only 
emphasis concerning the Postal Service's powers is that they be ``used 
in carrying out postal service duties.'' Plainly, nothing in section 
404 or the legislative history suggests that the Postal Service may 
unilaterally undertake to offer a broad range of services to the 
public.
---------------------------------------------------------------------------

    \68\ H.R. Rep. No. 1104, 91st Cong., 2nd Sess. 33 (1970), 
reprinted in 1970 U.S. Code Cong. & Admin. News, Vol. 2, 3682 
(hereinafter H.R. Rep. No. 91-1104 with page cites to U.S.C.C.A.N.).
---------------------------------------------------------------------------

    Stating that it relies on more than ``section 404(a)(6) to 
authorize the establishment of nonpostal services,'' the Postal Service 
alludes to its ``statutory mission and functions.'' \69\ As support, 
the Postal Service cites generally to its ``duty to provide mail 
services'' and ``incidental services appropriate to its functions and 
in the public interest.'' \70\ It concludes that ``these provisions'' 
authorize it ``to develop mail and related services that contribute to 
a coherent, effective postal system.'' \71\
---------------------------------------------------------------------------

    \69\ Comments of United States Postal Service on Consumer Action 
Petition, supra, at 16.
    \70\ Id. at 16-17.
    \71\ Id. at 17.
---------------------------------------------------------------------------

    The foregoing is a confounding rationale for the proposition 
advanced. The Postal Service attempts to justify its expansive 
interpretation of its authority to offer commercial, nonpostal services 
by reference to its postal duties and authority. Its argument is not 
persuasive. The Postal Service's undeniable authority to provide postal 
services, including related supporting activities, cannot legitimately 
be read to expand its limited statutory authority to provide nonpostal 
services. The two are unconnected.
    The Postal Service's obligation to provide postal services has no 
bearing on its authority to provide nonpostal services. As a matter of 
policy, the Postal Service is to be ``operated as a basic and 
fundamental service'' and ``have as its basic function the obligation 
to provide postal services to bind the Nation together through the 
personal, educational, literary, and business correspondence of the 
people.'' \72\ Its general duties include planning, developing, 
promoting, and providing adequate and efficient postal services at 
reasonable rates.\73\ It has a universal service obligation.\74\ It is 
obliged to receive, transmit, and deliver ``written and printed matter, 
parcels, and like materials and provide such other services incidental 
thereto as it finds appropriate to its functions and in the public 
interest.'' \75\ In addition, it is

[[Page 67521]]

charged with, among other things, providing types of mail service to 
meet the public's needs.\76\
---------------------------------------------------------------------------

    \72\ 39 U.S.C. 101(a) (emphasis added). See also H.R. Rep. No. 
91-1104, supra, at 3668. (``The Postal Service is--first, last and 
always--a public service.'')
    \73\ 39 U.S.C. 403(a) (emphasis added).
    \74\ 39 U.S.C. 101(a).
    \75\ 39 U.S.C. 403(a) (emphasis added). In its argument above, 
the Postal Service excises the term ``thereto'' when referring to 
its authority to provide incidental services. The omission is not 
inconsequential. When read in context, the phrase ``services 
incidental thereto'' means that the incidental, which is to say 
subordinate or nonessential, services relate to the Postal Service's 
duty to provide mail services. This clause allows for ancillary and 
mail-related activities, but it does not authorize activities 
unrelated to providing postal services.
    \76\ 39 U.S.C. 403(b)(2).
---------------------------------------------------------------------------

    The Act also grants the Postal Service certain general and specific 
powers to carry out these duties. The general powers enable the Postal 
Service to function as a business, an enumeration necessary since, 
under the Act, it would no longer operate as an executive department of 
the federal government.\77\ The specific powers relate, for the most 
part, to matters involving postal operations, e.g., the handling of 
mail, payment of postage, the need for post offices, and investigating 
postal offenses.\78\
---------------------------------------------------------------------------

    \77\ 39 U.S.C. 401. These general powers include, for example, 
the power to sue and be sued, to contract, to determine its own 
system of accounts, and to acquire property.
    \78\ 39 U.S.C. 404. To the extent the Postal Service may rely on 
section 401(a)(10) for authority to engage in commercial, nonpostal 
activities, the Commission believes such reliance to be misplaced.
---------------------------------------------------------------------------

    In contrast to the overriding emphasis on the Postal Service's 
obligations regarding postal services, the Act contains but two 
references to nonpostal services, sections 404(a)(6) and 
2003(b)(1).\79\ Certainly, Congress was aware that historically the 
Postal Service provided sundry nonpostal or nonmail services. Section 
2303 of former title 39 specifically refers to nonpostal services, 
illustratively citing the sale of documentary stamps for the Department 
of the Treasury. As chronicled by Cullinan, the Post Office Department 
(POD), over time, performed numerous, miscellaneous nonpostal functions 
such as: Alien address reporting, selling U.S. savings bonds, 
maintaining ``wanted'' posters issued by the Federal Bureau of 
Investigation, and witnessing the marking of absentee ballots.\80\
---------------------------------------------------------------------------

    \79\ The latter provides that revenues from postal and nonpostal 
services are to be deposited in the Postal Service Fund.
    \80\ The United States Postal Service, supra, at 196-99.
---------------------------------------------------------------------------

    When the POD offered a commercial service unrelated to the mails it 
was based on specific congressional authorization, namely by an 
amendment to its then-existing statutory authority. The principal 
example is the postal savings system, which Congress established in 
1910 and discontinued in 1966.\81\ In contrast, the PRA contains no 
explicit authorization enabling the Postal Service to offer commercial, 
nonpostal services.
---------------------------------------------------------------------------

    \81\ See Act of June 25, 1910, ch. 386, 36 Stat. 814 and Act of 
March 28, 1966, 80 Stat. 92; see also The United States Postal 
Service, supra, at 193-95.
---------------------------------------------------------------------------

    In filings subsequent to its comments on the petition in Docket 
*2003, the Postal Service elaborates on its assertion regarding its 
authority to provide commercial, nonpostal services, principally by 
quoting two sentences from the House Report on H.R. 17070. Before 
examining those excerpts, two preliminary observations are in order. 
First, as a general matter, the Postal Service's philosophy regarding 
nonpostal services is that it ``only develops products and services to 
meet the needs of postal patrons[.]'' \82\ Assuming the Service is 
referring to postal patrons in their capacity as consumers of postal 
products and not as a general description of all United States 
residents, the incongruity is apparent--products and services designed 
to meet the demands of postal patrons would appear, ipso facto, to be 
postal.
---------------------------------------------------------------------------

    \82\ Answer of the United States Postal Service, Docket No. 
C2004-2, April 26, 2004, Attachment A at 1.
---------------------------------------------------------------------------

    Second, in its Report on Nonpostal Initiatives, the Postal Service 
again alludes to its mandate regarding postal services to support its 
unilateral offering of various ``nonpostal'' services. It states: ``To 
fulfill its universal service mandate and mission, the Postal Service 
must find ways to use existing resources to generate new revenue.'' 
\83\ This statement, by itself, is unobjectionable, but it does not 
justify the unilateral offering of an unfettered range of commercial 
services as nonpostal. In the final analysis, the Postal Service can 
point to no statutory language supporting its expansive view of the 
term nonpostal.\84\
---------------------------------------------------------------------------

    \83\ Report on Nonpostal Initiatives, Docket *2003, March 10, 
2003, at 1 (Report on Nonpostal Initiatives).
    \84\ In a similar vein, the Postal Service's desire ``to 
leverage its existing resources as efficiently as possible'' is 
entirely in keeping with its duties to provide postal services and 
to operate in a more business-like fashion. But, again, under the 
Act, this desire does not necessarily mean that it is free to 
undertake unilaterally to offer competitive, commercial services.
---------------------------------------------------------------------------

    The two excerpts from the House Report on H.R. 17070 are apparently 
cited for the proposition that the Postal Service can engage in 
whatever nonpostal activities it may wish. As approbation, such 
reliance is misplaced. The Postal Service quotes the following sentence 
as justifying its expansive definition of the term nonpostal: ``The 
Postal Service is empowered to engage in research and development 
programs directed toward the expansion of present postal services and 
development of new services responsive to the evolving needs of the 
United States.'' \85\ This one sentence, part of a larger discussion 
summarizing the bill, is preceded by statements underscoring the Postal 
Service's postal obligations, namely to develop adequate and efficient 
postal service, to maintain its universal service obligation, and to 
provide effective postal service in rural and urban communities.\86\ It 
is followed immediately by a recitation of some of the Postal Service's 
specific powers, as reflected in section 404 of the Act, notably 
however, without any reference to its authority to provide special, 
nonpostal or similar services.\87\ Thus, in context, the quoted 
language is simply part of an abbreviated recitation of the Postal 
Service's postal duties. Moreover, the specific language is nothing 
more than a variation of a basic purpose of the bill, namely to 
``[e]nable the postal service to continue to provide--and extend and 
improve upon--the present quality and scope of postal service * * 
*.\88\ Thus, it was Congress' expectation that research and development 
would produce improvements in the present and future communications 
services provided to postal patrons.
---------------------------------------------------------------------------

    \85\ Report on Nonpostal Initiatives, supra, at 1; citing H.R. 
Rep. No. 1104, 91st Cong. 2nd Sess. 9 (1970) at 3657; see also 
Answer of the United States Postal Service, Docket No. C2004-2, 
April 26, 2004, Attachment A at 1.
    \86\ H.R. Rep. No. 91-1104, supra, at 3657.
    \87\ Ibid.
    \88\ Id. at 3650.
---------------------------------------------------------------------------

    While only inferred by its comments, the Postal Service apparently 
interprets the phrase ``new services'' to mean nonpostal. If so, this 
construction is wholly without support. The entire discussion is framed 
in terms of the Postal Service's postal obligations; there is no 
mention of its nonpostal authority, even when the subject turns to the 
Postal Service's specific powers; and finally, it would suggest, 
contrary to the carefully crafted balance reflected in the Act, that 
Congress granted the Postal Service carte blanche to engage in whatever 
``new services'' it may wish without any opportunity for regulatory 
review or public input.
    Nor does the second passage from the House Report provide any 
support for the Postal Service's interpretation of the term nonpostal. 
The sentence relied on reads as follows: ``H.R. 17070 envisions a 
national postal service that is forever searching for new markets and 
new ways by which the communications needs of the American people may 
be served.'' \89\ This statement is included in a discussion concerning 
procedures for changes in postal service under H.R. 17070, which 
provided for review of such changes by the regulatory body,

[[Page 67522]]

namely the Postal Regulatory Board.\90\ The discussion makes it clear 
that while the Postal Service, as a public service, should be operated 
``on a businesslike basis,'' H.R. 17070 provided a mechanism for public 
input in the form of regulatory review.
---------------------------------------------------------------------------

    \89\ Report on Nonpostal Initiatives, supra, at 1; citing H.R. 
Rep. No. 1104, 91st Cong. 2nd Sess. 20 (1970) at 3668-69; see also 
Answer of the United States Postal Service, Docket No. C2004-2, 
April 26, 2004, Attachment A at 2.
    \90\ H.R. Rep. No. 91-1104, supra, at 3668.

In establishing the Postal Service on a businesslike basis, H.R. 
17070 provides significant assurance that the postal management will 
in fact be responsive to the people to a greater degree than has 
heretofore been known. But in addition, H.R. 17070 contains specific 
provisions requiring justification and review of changes in service. 
Following procedures comparable to those for proposed rate changes, 
operating management would submit proposals relating to changes in 
service to the Rate Board with public notice and opportunity for 
comment. The Board would have discretion as to whether to hold 
public hearings. Written submissions would be permitted in any 
case.\91\
---------------------------------------------------------------------------

    \91\ Ibid. Based on the record, the Board would issue an initial 
decision that would become final unless modified or revoked by the 
Commission on Postal Costs and Revenues.

    Again, there is no suggestion in this discussion (or elsewhere) 
that the ``new markets and new ways by which the communications needs 
of the America people may be served'' refer to anything other than 
postal services as they may evolve over time.\92\ The heading for the 
entire discussion is ``Procedures for changes in postal service''.\93\ 
Moreover, that the ``communications needs'' refers to postal services 
is confirmed by the House Report's description of section 101(a) of 
H.R. 17070, concerning the ``postal policy'' underlying what became the 
Act.\94\ ``[T]he United States Postal Service shall be operated as a 
basic communication service provided to all the people by the 
Government of the United States[.]'' \95\
---------------------------------------------------------------------------

    \92\ As with the prior excerpt, one can only infer that the 
Postal Service interprets the phrase ``new markets and new ways'' to 
mean nonpostal. For the reasons discussed above, if that is its 
position, it, too, is wholly unsupported. Examples of new markets 
and new ways to communicate were manifest shortly after passage of 
the Act in the form of Electronic Computer Originated Mail and 
Mailgrams.
    \93\ H.R. Rep. No. 91-1104, supra, at 3668 (emphasis in 
original).
    \94\ Id. at 3671.
    \95\ Ibid.
---------------------------------------------------------------------------

    Furthermore, the Postal Service's construction is flawed for 
another reason. It fails to consider the independent role reserved for 
the Commission under the Act. In United Parcel Service, supra, the 
court observed: \96\
---------------------------------------------------------------------------

    \96\ United Parcel Service, supra, 455 F. Supp. at 869.

    Management was vested in the Postal Service, rate and 
classification supervision in the Postal Rate Commission. We 
recognize and weigh heavily the congressional goal of greater 
managerial flexibility, but also recognize another congressional 
purpose that finds its incarnation in the Postal Rate Commission. 
The Commission's existence insures that an agency independent of the 
Postal Service will provide for public notice and hearing input of 
those affected by the proposed action and full and on the record, 
see 39 U.S.C. 3624(a), consideration of pertinent factors and 
congressionally imposed goals before certain types of decisions are 
---------------------------------------------------------------------------
made.

    In ceding its ratemaking authority, Congress established procedures 
for the review of Postal Service rate, classification, and service 
changes. Among other things, it was mindful of the need for the 
Commission to consider competitive concerns.\97\ The Act thus reflects 
a careful balance between allowing the Postal Service to operate in a 
more business-like manner (and free of politics) while affording the 
public reasonable protections, including the opportunity for public 
input. In contrast to this carefully constructed scheme, the Postal 
Service interprets nonpostal expansively to justify the provision of 
any type of service to the public, commercial or not, that it 
classifies as not postal. Section 404(a)(6) is simply too thin a reed 
to support such a reading. It suggests that Congress would be 
unconcerned with the competitive implications of putative nonpostal 
services, while, at the same time, it expressly considered them 
concerning postal matters. A fair reading of section 404(a)(6) within 
the context of the Act suggests that the term nonpostal has a more 
limited reach.
---------------------------------------------------------------------------

    \97\ See 39 U.S.C. 3622(b)(4) and (b)(5).
---------------------------------------------------------------------------

D. Flamingo Industries Did Not Address the Meaning of the Term 
Nonpostal
    In their initial comments, OCA/CA assert that the Supreme Court's 
statements in Flamingo Industries \98\ concerning nonpostal lines of 
business operated by the Postal Service and its predecessor the Post 
Office Department are irrelevant to issues in this proceeding.\99\ 
Among other things, OCA/CA contend that the Court used the term 
``nonpostal'' in a non-technical sense and further that the authorities 
it cites do not support the statements made.\100\ In its Reply 
Comments, the Postal Service notes, without elaboration, the Court's 
observation that ``[t]he Postal Service does operate nonpostal lines of 
business, for which it is free to set prices independent of the 
Commission, and in which it may seek profits to offset losses in the 
postal business.'' \101\
---------------------------------------------------------------------------

    \98\ United States Postal Service v. Flamingo Industries (USA) 
Ltd., 540 U.S. 736 (2004) (Flamingo Industries).
    \99\ Joint Initial Comments at 13-15.
    \100\ Id. at 13-14. Given their proposed definition of the term 
nonpostal, OCA/CA take issue with the Court's statement that the 
Postal Service may set prices and earn profits on some products or 
services offered to the public. Id. at 14-15.
    \101\ Postal Service Reply Comments, supra, at 6, citing 
Flamingo Industries, slip op. at 10.
---------------------------------------------------------------------------

    The question presented in Flamingo Industries was whether the 
Postal Service is a ``person'' under Federal antitrust laws. In holding 
that the Postal Service is not a person separate from the United States 
itself, the Court relied, in large measure, on the Service's statutory 
designation as ``an `independent establishment of the executive branch 
of the Government of the United States.' '' \102\ In support of its 
conclusion, the Court cited the Postal Service's ``nationwide, public 
responsibilities'' that distinguish it from private enterprise, 
including its breakeven requirement, universal service obligation, and 
national security responsibilities. The Court also noted that the 
Postal Service possesses powers more characteristic of Government than 
private enterprise including its statutory monopoly, the power of 
eminent domain, and the power to conclude international postal 
agreements.\103\ Further, the Court observed that because the Postal 
Service lacked the power to set prices, ``[i]t lacks the prototypical 
means of engaging in anticompetitive behavior.'' \104\ The Court 
concluded that these ``public characteristics and responsibilities 
indicate [the Postal Service] should be treated under the antitrust 
laws as part of the Government of the United States, not a market 
participant separate from it.'' \105\
---------------------------------------------------------------------------

    \102\ Flamingo Industries, slip op. at 9.
    \103\ Id. at 10.
    \104\ Ibid.
    \105\ Ibid.
---------------------------------------------------------------------------

    The Court then proceeded to discuss the Postal Service's 
``nonpostal lines of business,'' \106\ an issue that arose only 
because, in its brief to the Court, Flamingo Industries raised the 
collateral argument that the Postal Service was authorized to engage in 
commercial activities, citing section 404(a)(6).\107\ It offered this 
argument, notably without any analysis of the term nonpostal, in 
support of its ultimate position that the Postal Service should be 
perceived as a person subject to federal antitrust laws, contending 
that such activities demonstrate that the Postal Service operates like 
private industry in the commercial world.
---------------------------------------------------------------------------

    \106\ Id. at 10-11.
    \107\ See Brief for Respondents, Case No. 02-1290, September 15, 
2003, at 22-23.

---------------------------------------------------------------------------

[[Page 67523]]

    The Court's observations concerning the Postal Service's 
``nonpostal lines of business'' were not offered as dispositive of the 
meaning of the term nonpostal. Nor, parenthetically, does the Postal 
Service contend this. Rather, the observations, largely dicta in 
character, simply indicate that the (unspecified) lines of business do 
not demonstrate that the Postal Service should be viewed as separate 
from the Government under antitrust laws. Thus, other than perhaps as 
suggested by Pitney Bowes, Flamingo Industries has no bearing on issues 
before the Commission in this proceeding.\108\
---------------------------------------------------------------------------

    \108\ In its comments, Pitney Bowes contends that in reaching 
its conclusion that the Postal Service was not subject to federal 
antitrust laws the Court relied, in part, on the Commission's role 
in providing regulatory review of services and products offered by 
the Postal Service. Thus, according to Pitney Bowes, ``there is all 
the more reason to assure that the Commission's oversight remains 
strong and effective.'' Pitney Bowes Comments, supra, at 3, n.1.
---------------------------------------------------------------------------

    In sum, nothing in either the statute or the legislative history 
provides support for the Postal Service's position. Prior to the 
enactment of the PRA, the Post Office Department's provision of 
miscellaneous nonpostal services was well recognized. In the main, the 
Post Office Department served as a surrogate for the government 
providing relatively minor services unrelated to the mails. Nor is it 
insignificant that the legislative history of the Act contains no 
substantive discussion of the term ``nonpostal.'' Against this 
considerable backdrop, it is unreasonable to suggest that the simple 
reference to ``nonpostal'' in section 404(a)(6) can be read to empower 
the Postal Service to offer unilaterally to the public whatever 
service, commercial or otherwise, it might wish. Such a reading is too 
at odds with the statute, legislative history, and historical 
operations to be credible. Had Congress intended something more, it 
would have been explicit, as it was when it detailed the Postal 
Service's postal functions.
    Recognizing that the differences between its and the Commission's 
interpretations may need to be resolved judicially, the Postal Service 
states that until that happens the Commission ``cannot authoritatively 
impose its own formulation and interpretation on the Postal Service's 
conduct[.]'' \109\ That is neither the intent nor purpose of the rule. 
The Commission properly is acting to clarify the scope of its own 
jurisdiction. To reiterate, the Postal Service remains free to offer 
whatever services are consistent with its statutory mandate. Nothing in 
the rule affects the lawfulness of the Postal Service initiatives that 
are not postal. As the Commission has noted previously, it lacks 
equitable powers to enjoin Postal Service actions. Thus, the lawfulness 
of Postal Service's nonpostal activities is not an issue before the 
Commission.\110\ However, the prices for postal services must be set in 
accordance with section 3624.
---------------------------------------------------------------------------

    \109\ Postal Service Initial Comments at 4.
    \110\ See, e.g., PRC Order No. 724, December 2, 1986, at 11; PRC 
Order No. 1239, May 3, 1999, at 13.
---------------------------------------------------------------------------

V. Definition of the Term Postal Service

    Early consideration of what constituted a ``postal service'' was 
limited perforce to hard copy mail. That, after all, simply reflected 
the state of Postal Service operations at the time. One of the issues 
now before the Commission is whether services relying on new 
technology, such as electronic services, fall within the ambit of 
postal services under the Act. As elaborated on below, the Commission 
concludes that those services in which the Postal Service receives, 
transmits, or delivers correspondence constitute postal services. This 
conclusion is drawn from the Act and its legislative history.
    Section 403 sets out the general duties of the Postal Service, 
beginning with the duty to ``plan, develop, promote, and provide 
adequate and efficient postal services at fair and reasonable rates and 
fees.'' \111\ It is required to ``receive, transmit, and deliver * * * 
written and printed matter, parcels, and like materials and provide 
such other services incidental thereto as it finds appropriate to its 
functions and in the public interest.'' \112\ Its responsibilities also 
include maintaining an efficient delivery system and providing types of 
service to meet the needs of different users.\113\
---------------------------------------------------------------------------

    \111\ 39 U.S.C. 403(a).
    \112\ Ibid.
    \113\ 39 U.S.C. 403(b)(1) and (b)(2).
---------------------------------------------------------------------------

    There are no limitations inherent in these broad general duties, or 
elsewhere in the Act, which would suggest that the Postal Service 
should not consider technological advances when carrying out its 
functions. Section 101(a) instructs that the Postal Service ``shall 
have as its basic function the obligation to provide postal services to 
bind the Nation together through the personal, educational, literary, 
and business correspondence of the people.'' In describing this 
section, the House Report states that the ``Postal Service shall be 
operated as a basic communications service provided to all the people 
by the Government of the United States[.]'' \114\ The policy that the 
Postal Service is to be operated as ``a basic communications service'' 
can only be fulfilled if the Postal Service can avail itself, 
consistent with the Act, of technological innovations effecting 
communications. The Act does not require the Postal Service to ignore 
innovations, and to remain, in essence, the equivalent to the best 
buggy whip manufacturer it can be.
---------------------------------------------------------------------------

    \114\ H.R. Rep. No. 91-1104, supra, at 3671.
---------------------------------------------------------------------------

    The House Report confirms that Congress envisioned that postal 
services would change over time as influenced by, among other things, 
technological, economic, and social growth. In reforming the then-
existing postal system, Congress intended to ``[c]reate a lasting 
foundation for a modern, dynamic, and viable postal institution that is 
both equipped and empowered at all times to satisfy the postal 
requirements of the future technological, economic, cultural, and 
social growth of the Nation.'' \115\
---------------------------------------------------------------------------

    \115\ Id. at 3650.
---------------------------------------------------------------------------

    Comments by competitors raise legitimate concerns about the Postal 
Service's unilateral offering of commercial, ``nonpostal'' 
services.\116\ These comments demonstrate that many of these services 
have a substantial public effect. Congress envisioned that a ``modern, 
dynamic, and viable postal institution'' would satisfy the Nation's 
postal needs by harnessing technological and economic changes. In 
short, not surprisingly, Congress anticipated that postal services 
would evolve over time. Moreover, by bifurcating the authority under 
the Act between the Commission and the Postal Service, Congress 
provided a mechanism to ensure that legitimate public interests would 
continue to be protected. As described by the court in United Parcel 
Service, supra, the Commission ``was designed as a sort of sunshine 
mechanism to avoid undue political influence and to assure the public 
is heard from and the public interest represented before rate, 
classification, and significant service changes are made.'' \117\
---------------------------------------------------------------------------

    \116\ See, e.g., Pitney Bowes Comments, supra, at 2-4, UPS 
Comments, supra, at 1-2, and Lifetime Addressing Comments, supra, at 
2.
    \117\ United Parcel Service, supra, 455 F. Supp. at 869.
---------------------------------------------------------------------------

    The careful balancing of authorities between the Commission and the 
Postal Service under the Act reflects Congress' concern that the public 
be adequately protected once congressional control of the Post Office 
Department was relinquished. In light of the safeguards built into the 
Act, there was no pressing need to define the term ``postal service,'' 
particularly since, as discussed above, the entire thrust of the Act 
concerns the

[[Page 67524]]

Postal Service's postal mission.\118\ The need only arises now, as 
discussed in Order No. 1389, because the spate of recent services 
introduced unilaterally by the Postal Service has created uncertainty 
and controversy regarding the postal character of those services. 
Codifying the term in the Commission's rules should alleviate those 
problems by providing guidance to the Postal Service and the public 
concerning services that are subject to sections 3622 and 3623 of the 
Act. As a general matter, the Commission concludes that services 
offered by the Postal Service that provide an alternative to more 
traditional mail services, such as electronic communication services, 
would fall within the proposed definition. With that elaboration, the 
Commission proposes to adopt new rule 5(s) to read as follows: Postal 
service means the receipt, transmission, or delivery by the Postal 
Service of correspondence, including, but not limited to, letters, 
printed matter, and like materials; mailable packages; or other 
services supportive or ancillary thereto.
---------------------------------------------------------------------------

    \118\ This represents a marked contrast to postal legislation 
currently pending before Congress. The Senate bill, S. 2468, limits 
the term ``postal service'' to physical deliveries whereas the House 
bill, H.R. 4341, employs the phrase ``carriage of.'' Both would 
delete current section 404(a)(6), with the Senate bill appearing to 
preclude all such services other than under section 411, while the 
House bill would grandfather service provided as of May 12, 2004.
---------------------------------------------------------------------------

    This definition employs statutorily linked terms descriptive of the 
Postal Service's duties and mission. The Postal Service has a duty to 
plan, develop, and provide adequate and efficient postal services. To 
fulfill that duty, it is required to ``receive, transmit, and deliver * 
* * written and printed matter, parcels, and like materials[.]'' \119\ 
As its ``basic function,'' it is obligated ``to provide postal services 
to bind the Nation together through the personal, educational, 
literary, and business correspondence of the people.'' \120\ Neither 
its duties nor obligations are predicated on preconceived notions of 
what ``postal services'' might be. Nor are they framed by reference to 
mail or the then existing mailstream, e.g., letters, publications, etc. 
Rather, the statute uses generic terms to describe application of the 
Postal Service's mission to ``correspondence'' and ``written and 
printed matter, parcels, and like materials.'' As evidenced by the 
legislative history, the statute anticipates the influence of 
technological, economic, and social change on the provision of postal 
services. Accordingly, it is appropriate to utilize the statutorily 
derived terms.
---------------------------------------------------------------------------

    \119\ 39 U.S.C. 403(a).
    \120\ Id. Sec.  101(a).
---------------------------------------------------------------------------

    The benefit of focusing on the statutory functions of the Postal 
Service can be shown through the following hypothetical. Assume the 
Postal Service assigns every American a permanent e-mail address, and 
charges individuals an annual fee to access e-mails sent to those 
addresses. The Service would be accepting, transmitting and delivering 
business and personal correspondence. Under the proposed definition 
this would be a postal service, even though no tangible hard copy 
changed hands. The private express statutes do not, and should not 
apply to e-mail, but the Postal Service would be competing with private 
firms and its own products in a healthy industry, and its rates and 
fees should be fair and nondiscriminatory.
    The terms of the proposed definition are easily understood and 
their meaning clear. The term ``receipt'' is the act of receiving 
something; ``transmission'' covers the act of transmitting, that is 
sending or conveying something to a destination or recipient; and 
``delivery'' is the act of transferring, turning over, or making 
available the item(s) transmitted to the recipient. Collectively, these 
terms encompass the related activities associated with postal services, 
e.g., acceptance, collection, verification, and processing.
    It is appropriate to reflect electronic services in the definition 
of the term postal service. Postal services have continually evolved 
over time with changes in technology. For example, stagecoaches, which 
were initially used to transport the mails, were supplanted by 
railroads which, in turn, gave way to trucks and airplanes. In 
considering the evolutionary effects of technology, the Commission has 
observed: \121\
---------------------------------------------------------------------------

    \121\ PRC Order No. 1389, January 16, 2004, at 8.

It is not merely that these technological advances provided for 
improved service, rather they gave rise to wholly new forms of 
``postal service.'' Examples include airmail service, Express Mail 
services, as well as electronic mail. In addition, technology has 
given rise to many new types of special postal services such as 
---------------------------------------------------------------------------
Confirm, and delivery and signature confirmation.

    Indeed, the Postal Service has recognized the role of technology in 
shaping the nature of postal services. Commenting on its Electronic 
Computer Originated Mail (E-COM) proposal in Docket No. MC78-3, the 
Postal Service characterized its entry into the electronic mail field 
as ``a natural progression of technology,'' by using ``electronics to 
move the mail'' instead of a surface or air carrier.\122\ Moreover, 
regarding its proposal, the Postal Service maintained the position that 
E-COM messages, while in electronic form, were deemed `` `in the 
mails.' '' \123\ Similarly, concerning Mailing Online Service, a Postal 
Service witness characterized the bits of electronic data that would 
ultimately be reduced to hard copy messages ``as mail pieces.'' \124\ 
There are other contemporaneous indications that the Postal Service has 
considered electronic service offerings as an extension of traditional 
mail services. For example, upon review of new products offered by the 
Postal Service, the General Accounting Office reported that the Postal 
Service ``views its entry into the electronic commerce market as an 
extension of its core business--the delivery of traditional mail. 
According to Service officials, electronic mail has the same attributes 
as traditional mail * * *.'' \125\
---------------------------------------------------------------------------

    \122\ Initial Brief of the United States Postal Service, Docket 
No. MC78-3, November 9, 1979, at 9. In that proceeding, the Postal 
Service argued that ``E-COM service fits squarely within the scheme 
of transmitting messages envisioned by the Postal Reorganization 
Act. * * * The E-COM proposal keeps pace with advances in technology 
* * * by utilizing electronics to move mail, instead of utilizing [a 
surface or air carrier].'' Ibid.
    \123\ PRC Op. MC78-3, December 17, 1979, at 172 (footnote 
omitted).
    \124\ Docket No. MC98-1, Tr. 7/1718.
    \125\ General Accounting Office Report, Development and 
Inventory of New Products, GAO/GGD-99-15 (November 24, 1998) at 36. 
See also 61 FR 42,219 (1996) (Electronic services ``will provide 
security and integrity to electronic correspondence and 
transactions, giving them attributes usually associated with First-
Class Mail.'')
---------------------------------------------------------------------------

    The Postal Service use of technology to develop new types of postal 
service is entirely consistent with its statutory mandate ``to provide 
postal services to bind the Nation together'' by ``provid[ing] prompt, 
reliable, and efficient services to patrons in all areas * * *.'' \126\ 
The Postal Service's central mission is to ``plan, develop, promote, 
and provide adequate and efficient postal services * * *.'' \127\ 
Furthermore, it is instructed to ``promote modern and efficient 
operations'' while refraining from any practice ``which restricts the 
use of new equipment or devices which may reduce the cost or improve 
the quality of postal services[.]'' \128\ Consistent with these 
mandates, the Postal Service has employed technology in the pursuit of 
more efficient and modern postal services.
---------------------------------------------------------------------------

    \126\ 39 U.S.C. 101(a).
    \127\ 39 U.S.C. 403(a); see also 39 U.S.C. 403(b)(2) (The Postal 
Service shall ``provide types of mail service to meet the needs of 
different categories of mail and mail users.'')
    \128\ 39 U.S.C. 2010.
---------------------------------------------------------------------------

    This rulemaking is not the appropriate forum for the Commission

[[Page 67525]]

to address the jurisdictional status of specific services, such as 
those identified in Consumer Action's petition, that the Commission has 
not had an opportunity to consider fully. To provide some guidance as 
to the application of the new rule, however, the Commission will, for 
illustrative purposes, refer to several services no longer offered by 
the Postal Service.
    In Docket No. C99-1, the complainant contended that the Postal 
Service was providing a new service, Post Electronic Courier Service 
(Post ECS), in violation of the Act.\129\ Post ECS service, a pilot 
program available only to licensees, offered an all-electronic means of 
transmitting documents securely via the Internet. Briefly, licensees 
could transmit documents to a Postal Service Electronic Commerce Server 
whereupon the Postal Service would notify the addressee by e-mail that 
the document was available at a specified URL address. To retrieve the 
document, the addressee would access the site, enter the appropriate 
password, and, if desired, download the document.
---------------------------------------------------------------------------

    \129\ See Complaint of United Parcel Service, Docket No. C99-1, 
October 5, 1998. UPS's complaint was based on three claims: (a) That 
the service may only be established pursuant to sections 3622 and 
3623 of the Act; (b) that the provision of the service at no charge 
violates sections 3622(b)(3) and 3622(b)(4); and (c) that Post ECS 
represents a change in the nature of postal services affecting 
service on a nationwide or substantially nationwide basis.
---------------------------------------------------------------------------

    The Postal Service moved to dismiss the complaint arguing, first, 
that the Commission lacked authority to determine the status of the 
service as either postal or nonpostal, and second that, even assuming 
the Commission had authority to determine the status of Post ECS 
service, the complaint should be dismissed as beyond the Commission's 
authority because the service is neither postal nor domestic.\130\ The 
Commission denied the motion, finding that its mail classification 
authority empowered it to review the status of services proposed or 
offered by the Postal Service.\131\ Nor was the Commission persuaded, 
based on the record developed to that point, that the service did not 
include domestic operations or that it was nonpostal. Ultimately, 
however, the issue whether Post ECS was, or was not, a postal service 
was not reached as the complaint was subsequently dismissed as 
moot.\132\
---------------------------------------------------------------------------

    \130\ Motion of the United States Postal Service to Dismiss, 
Docket No. C99-1, November 5, 1998.
    \131\ PRC Order No. 1239, May 3, 1999, at 12.
    \132\ PRC Order No. 1352, November 6, 2002. The Postal Service 
terminated Post ECS service and moved to dismiss the complaint as 
moot.
---------------------------------------------------------------------------

    Recognizing that the proceeding concluded without benefit of a 
hearing, but assuming that Post ECS service included some wholly 
domestic transactions, all indications suggest that Post ECS would be a 
postal service under the new rule. In that proceeding, the Commission 
did not find it dispositive that service did not entail hard copy 
mail.\133\ As the Commission noted in Order No. 1239, ``a colorable 
claim [was made] that [Post ECS service] not only is very closely 
related to the carriage of mail, it is the delivery of mail because it 
accomplishes by electronic means all the functions that would otherwise 
be performed by conveying a physical message or document.'' \134\
---------------------------------------------------------------------------

    \133\ PRC Order No. 1239, supra, at 15-21.
    \134\ Id. at 19 (emphasis in original).
---------------------------------------------------------------------------

    The Postal Service offers various ways to receive and pay bills. 
These currently include First-Class Mail, Priority Mail, and Express 
Mail. Until earlier this year, it also offered online payment services, 
consisting of USPS eBillPay, USPS Send Money, and USPS 
Pay@Delivery.\135\ These services were discontinued May 1, 2004.\136\
---------------------------------------------------------------------------

    \135\ Report on Nonpostal Initiatives, supra, at 8-9.
    \136\ http://www.usps.com/paymentservices/ops_discontinued.htm; 
see also Update to Report on Nonpostal Initiatives, Docket *2003, 
November 14, 2003.
---------------------------------------------------------------------------

    USPS eBillPay enabled customers to receive, review, and pay their 
bills via the Postal Service's Web site. The Postal Service described 
it as an all electronic service, except for any payments mailed at 
standard rates of postage.\137\ It would appear that USPS eBillPay 
operated simply as a surrogate for more traditional means of receiving 
and paying bills. Some payments utilized the mails. In this regard, 
there are obvious parallels to money orders, currently a jurisdictional 
special service. Thus, under the statute, based on currently available 
information, this service would likely be considered a postal 
service.\138\
---------------------------------------------------------------------------

    \137\ Report on Nonpostal Initiatives, supra, at 9.
    \138\ Moreover, these efforts by the Postal Service to harness 
technology are precisely what the statute has in mind with respect 
to postal services, namely to plan, develop, and provide adequate 
and efficient postal services and to bind the nation together 
through, in these instances, business correspondence. The 
Commission's rules provide various options for expedited review of 
such proposals. See 39 CFR 3001.67 et seq. and 3001.161 et seq.
---------------------------------------------------------------------------

    In the recent past, the Postal Service offered a stored value card, 
LibertyCash, for use in purchasing postage and related products. 
Consideration was also given to the possibility of using it as a means 
to provide refunds to postal customers.\139\ Apparently, the Postal 
Service did not charge a separate fee for the card, but only the value 
of the postage encoded on it. The card is no longer offered for 
sale.\140\ Based on publicly available information, it would appear 
that LibertyCash was designed to give postal patrons a different 
payment option for purchasing postage or related products. Recognizing 
that the outcome would be dependent on the facts, two scenarios can be 
hypothesized for illustrative purposes. On the one hand, the card may 
have properties analogous to an advance deposit account, some of which 
are subject to an annual accounting fee recommended by the Commission. 
In that case, it likely would be viewed as an ancillary postal service. 
On the other hand, the card may have characteristics more analogous to 
a gift card, available to purchase Postal Service merchandise (mugs, 
etc.) as well as postage. In that event, it likely would not be 
considered an ancillary postal service.
---------------------------------------------------------------------------

    \139\ Report on Nonpostal Initiatives, supra, at 5.
    \140\ Update to Report on Nonpostal Initiatives, supra, at 1.
---------------------------------------------------------------------------

VI. The Parties' Comments Regarding the Proposed Rule

    The breadth of comments received in response to the proposed 
rulemaking was useful in the Commission's deliberations. They range 
from a suggestion that the Commission do nothing to one defining postal 
services based on a narrow meaning of the term nonpostal. Each of the 
comments has been carefully considered. In the final analysis, the 
Commission determination not to adopt either the proposed rule or 
variations suggested by commenters is predicated on its conclusion that 
it would be preferable to link the definition of the term ``postal 
service'' to the Postal Service's statutory duties rather than by 
reference to specific activities that the Postal Service may or may not 
perform.
    Of the seven sets of initial comments received, four suggest 
revisions to the proposed rule. Each is addressed below. Two of the 
remaining three commenters support the proposed rule, although for 
different reasons. In brief comments, the Parcel Shippers Association 
endorses the proposed rule, expressing its support for the treatment of 
the delivery of packages as a core postal service.\141\ Pitney Bowes 
advocates that the Postal Service should focus on its core mission, 
which it describes as maintaining universal physical mail service.\142\ 
To the extent that the Postal Service engages in non-core activities, 
Pitney Bowes argues that regulatory oversight is imperative given the 
Postal Service's statutorily defined monopoly

[[Page 67526]]

and service obligation.\143\ While it would prefer a legislative 
solution to the issue, Pitney Bowes endorses the proposed rule as 
sufficiently expansive to ensure necessary regulatory oversight.\144\
---------------------------------------------------------------------------

    \141\ PSA Comments at 1-2.
    \142\ Pitney Bowes Comments at 1.
    \143\ Id. at 2-3.
    \144\ Id. at 3-4.
---------------------------------------------------------------------------

    The last of the remaining commenters, Lifetime Addressing, asserts 
that ``[t]he public interest is best served by a broad definition of 
jurisdiction.'' \145\ In addition, it contends that the proper role for 
the Postal Service, as a government entity, is to deliver physical 
mail, not to provide services available from the private sector.\146\ 
In its reply comments, Lifetime Addressing urges the Commission to 
adopt a broad definition of the term ``postal service'' to protect the 
public interest and endorses the definitions proposed by OCA/CA.\147\
---------------------------------------------------------------------------

    \145\ Lifetime Addressing Comments at 2.
    \146\ Ibid.
    \147\ Lifetime Addressing Reply Comments at 2. Lifetime 
Addressing filed a motion for late acceptance of its initial 
comments. Motion for Late Acceptance of Comments of Lifetime 
Addressing, Inc., March 16, 2004. The motion is granted.
---------------------------------------------------------------------------

    Postal Service comments. Conceptually, the Postal Service does not 
oppose including a definition of the term postal service in the 
Commission's rules, characterizing it as ``a logical addition to the 
rules.'' \148\ The Postal Service suggests the rule would be improved 
if it referenced NAGCP I, ostensibly to clarify that the effect of the 
definition is ``merely to restate prevailing law.'' \149\ In addition, 
the Postal Service would define postal service to mean ``the carriage 
of letters, printed matter, or mailable packages, including acceptance, 
collection, processing, delivery, or other services supportive or 
ancillary thereto.'' \150\ This alternative differs from the 
Commission's in several respects.
---------------------------------------------------------------------------

    \148\ Postal Service Initial Comments at 3.
    \149\ Id. at 4-5, citing NAGCP I, supra, 569 F.2d at 595-98.
    \150\ Postal Service Reply Comments at 3.
---------------------------------------------------------------------------

    First, the Postal Service proposes to define postal service in 
terms of ``carriage of'' mail rather than ``delivery of'' mail, arguing 
that ``as far back as Docket No. R76-1 * * * [the Commission] has 
focused on the ``carriage of mail.'' \151\ The Commission will not 
adopt this suggestion as it appears to overlook that the term 
``carriage of mail'' is shorthand for the collection, transmission, and 
delivery of mail matter.\152\ Hence, including the ``carriage of'' 
terminology in the definition of postal service would not serve to 
clarify its meaning. To the extent the Postal Service was posing a 
definition that overly emphasizes the delivery function, the definition 
proposed herein avoids that concern.
---------------------------------------------------------------------------

    \151\ Postal Service Initial Comments at 5.
    \152\ PRC Op. R76-1, Vol. 1, at 266, n.1. The use of the 
conjunctive does not imply that the term is contingent on all three 
functions being performed by the Postal Service. As the Commission 
explained, ``[a] special postal service is thus one which is 
ancillary to one or more of these three steps.'' Ibid.
---------------------------------------------------------------------------

    Second, the Postal Service would eliminate reference to the maximum 
weight of packages, noting that the statutory maximum was deleted in 
1982.\153\ It proposes that, in lieu of including a set maximum weight 
limit, the definition simply refer to ``mailable'' packages.\154\ This 
is a useful suggestion and will be incorporated into the definition. 
The virtue of the proposal is its simplicity. It incorporates the 
concept of eligibility while eliminating the need to make conforming 
changes to the definition should the maximum weight limit be revised 
subsequently.\155\
---------------------------------------------------------------------------

    \153\ Postal Service Initial Comments at 5.
    \154\ Ibid.
    \155\ The same would not be the case concerning PostCom's 
proposed definition, which contains no reference to maximum weight 
or mailability. PostCom Initial Comments at 4. PostCom's suggestion 
has rate and classification implications and could, if adopted, 
create some confusion concerning the eligibility to mail items in 
excess of 70 pounds.
---------------------------------------------------------------------------

    Third, in a revision to the definition it originally proposed, the 
Postal Service would delete reference to ``transmission.'' \156\ This 
revision was prompted by PostCom's suggested alternative to the 
proposed rule. For the reasons discussed below, the Commission declines 
to adopt it.
---------------------------------------------------------------------------

    \156\ Postal Service Reply Comments at 3.
---------------------------------------------------------------------------

    PostCom comments. PostCom contends that the Commission should not 
proceed with this rulemaking, citing indications that the Postal 
Service may have curtailed its ``nonpostal'' activities and potential 
legislative reform.\157\ Alternatively, it suggests a definition 
limiting postal services to physical deliveries, ``including 
acceptance, collection, verification, sorting and transportation, and 
directly related services and functions.'' \158\
---------------------------------------------------------------------------

    \157\ PostCom Initial Comments at 1-2.
    \158\ Id. at 4.
---------------------------------------------------------------------------

    The initial appeal of its argument that the Commission do nothing 
wanes on consideration.\159\ Doing nothing would perpetuate the status 
quo, a result that, under the circumstances, is not in the public 
interest. Further, the mere prospect of relief via potential 
legislative reform is insufficient to dissuade the Commission from 
addressing this controversy. The need to define the term arises 
precisely because uncertainty exists whether what the Postal Service 
calls ``initiatives'' are ``postal services.'' Those filing complaints 
with the Commission contesting this point are entitled to a reasoned 
response. The proposed rule is intended to provide guidance to the 
Postal Service and the public concerning services that fall within the 
ambit of sections 3622 and 3623 of the Act.
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    \159\ In its reply comments, PostCom states its belief that a 
comprehensive definition of the term ``postal services'' can only be 
undertaken by Congress. PostCom Reply Comments at 1. Even accepting 
this statement at face value, however, does not negate the 
Commission's responsibilities under the current statute.
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    PostCom's alternative proposal is designed to remove ``electronic 
delivery mechanisms'' from the definition.\160\ Among other things, 
PostCom proposes to substitute the term ``transportation'' for 
``transmission,'' expressing concern that ``transmission'' may be 
construed to include electronic rather than only physical 
delivery.\161\ The Commission will not adopt PostCom's proposed 
alternative definition. As discussed above, the current statute 
contemplates that the Postal Service will avail itself of technological 
advances in providing postal services. The term ``transmission'' 
derives from the statute and has been used historically by the 
Commission. Among its general duties, the Postal Service ``shall 
receive, transmit, and deliver throughout the United States, its 
territories and possessions, * * * written and printed matter, parcels, 
and like materials * * *.'' 39 U.S.C. 403(a). Furthermore, the 
Commission has employed the term ``transmission'' for almost 30 years. 
In Docket No. R76-1, the Commission determined that special postal 
services were those ``ancillary to the collection, transmission, or 
delivery of mail.'' \162\ It is a standard invoked in other proceedings 
as well. See PRC Order No. 1128, July 30, 1996, at 10; PRC Order No. 
1145, December 16, 1996, at 8; and PRC Order No. 1239, May 3, 1999, at 
16 and 19.
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    \160\ PostCom Initial Comments at 4.
    \161\ Ibid.
    \162\ PRC Op. R76-1, Vol. 2, Appendix F at 3.
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    Nor will the Commission adopt PostCom's suggestion to substitute 
``directly related services and functions'' for ``other services 
supportive or ancillary thereto.'' While PostCom is mildly critical of 
the terms ``ancillary'' and ``supportive,'' it offers no support for 
the term ``directly related'' other than to assert that it is ``more 
precise.'' \163\ Again, the terms used in the proposed rulemaking trace 
to Docket No. R76-1 where the Commission described special services as 
ancillary to

[[Page 67527]]

the collection, transmission, or delivery of mail.\164\ Restating its 
conclusions, the Commission described special services as ``supportive 
or auxiliary'' to the collection, transmission or delivery of mail 
because they enhance the value of service of one of the substantive 
classes of mail.\165\
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    \163\ PostCom Initial Comments at 4-5.
    \164\ PRC Op. R76-1, Vol. 2, Appendix F at 3.
    \165\ PRC Op. R76-1, Vol. 1, at 266-67. While this restatement 
uses the term ``auxiliary,'' an acceptable meaning of that term, as 
PostCom recognizes, is ancillary. See PostCom Initial Comments at 5. 
(``The plain meaning of the term `ancillary' implies services which 
are auxiliary or subordinate to other postal services provided.'')
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    The Postal Service, which opposes PostCom's suggestion, confirms 
that the Commission's proposed language ``tracks the approach used 
consistently for decades.'' \166\ In sum, PostCom's suggestion 
represents no improvement over the long-used terms.
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    \166\ Postal Service Reply Comments at 2.
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    OCA/CA comments. As discussed above, OCA/CA propose a revamped 
definition of the term postal service based on the view that postal 
services are any service or product retailed by the Postal Service that 
is not provided to another government entity. Accordingly, they propose 
to define postal service in terms of activities undertaken by the 
Postal Service that, for example, significantly affect the cost or 
value of existing services, put significant Postal Service revenues at 
risk, or have a significant adverse effect on the existing market.\167\ 
They also propose that the Commission's rules be amended to include a 
definition of nonpostal service, namely, services provided by the 
Postal Service on behalf of other governmental agencies.\168\ In 
addition, OCA/CA discuss various services offered by the Postal 
Service, including de facto services, pilot tests, strategic alliances, 
and electronic services, which they believe should be deemed to be 
postal services.\169\
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    \167\ Joint Initial Comments at Appendix A.
    \168\ Ibid.
    \169\ Id. at 6-8; 23-39.
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    OCA/CA list a set of conditions which would trigger a finding that 
a Postal Service activity is subject to sections 3622 and/or 3623. For 
example, an activity would be deemed a postal service if one of the 
following conditions applies: (a) It significantly affects the 
intrinsic cost of an existing class, subclass or rate category or the 
relative costs of existing classes, subclasses or rate categories; (b) 
it grants a significant preference to any person; or (c) it deviates 
significantly from established methods of providing a service.\170\ 
This set of conditions offers, at best, a cumbersome means for 
identifying a postal service and, in any event, is not free from 
ambiguity. A conclusion that a particular activity is a postal service 
or not would be dependent on a factual inquiry, e.g., whether the 
activity had a significant effect on an existing rate category, Postal 
Service revenues, or a competitor, etc.
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    \170\ Id. at Appendix A.
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    This would appear to be a problematic way to define the term postal 
service. Interested persons would have to speculate how the Commission 
might view the nexus between the Postal Service activity and its impact 
on other services, classes of mail, or entities. Because of this, it 
would be unlikely to reduce uncertainty, a major goal of this 
rulemaking.
    OCA/CA also propose to include a definition of the term nonpostal 
in the Commission's rules and further urge the Commission not to employ 
the term ``nonpostal'' as proposed in a companion proceeding, Docket 
No. RM2004-2.\171\ The Commission finds it unnecessary to define the 
term nonpostal in this proceeding. The need only arises under OCA/CA's 
proposal because the term nonpostal defines, by negative implication, 
the term postal service. Likewise, the request that the Commission 
refrain from using the term nonpostal in proposed rule 54(h)(1)(i) need 
not be addressed in this proceeding. The Commission will consider that 
issue in Docket No. RM2004-2, where OCA/CA have also raised it.
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    \171\ Id. at 15.
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    Finally, OCA/CA discuss other services which they believe qualify 
as postal services and urge the Commission to encompass these services 
in its rules.\172\ They identify the following types of services:
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    \172\ Id. at 6.

    (a) De facto classification and service changes implemented 
without a recommended decision from the Commission. As examples, 
OCA/CA cite a new carrier pickup service and Electronic Tracking 
Confirmation service.\173\
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    \173\ Id. at 23-32.
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    (b) Pilot tests, described as experimental services, but 
including trials or other types of tests. They suggest that the 
definition of the term postal service include ``changes to the rates 
or terms of service for any mailer that deviates from the 
classification language contained in the DMCS or from the 
evidentiary record that established the terms of service[.]'' \174\
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    \174\ Id. at 34-35. They indicate that such changes would 
constitute de facto classification changes subject to the 
Commission's jurisdiction. Id. at 35.
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    (c) Services provided through a strategic alliance or contract 
with one or more parties. As an example, OCA/CA cite NetPost 
CardStore. They contend that the Service's ``interactions and 
representations to the public are the main determinant for 
concluding that a service or product offered through a partnership 
arrangement that leverages the Postal Service's ``brand'' is a 
Chapter 36 ``postal service.'' \175\
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    \175\ Id. at 37.
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    (d) Electronic services. They advocate that the rule explicitly 
state that services provided in whole or in part by electronic means 
are postal services.\176\
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    \176\ Id. at 38-39.

    In its reply comments, the Postal Service ``urges the Commission to 
refrain from addressing the merits of CA/OCA's arguments and 
conclusions regarding any current or future Postal Service activities'' 
cautioning that any attempt to do so ``would be prejudicial, unwise, 
and potentially invalid.'' \177\
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    \177\ Postal Service Reply Comments at 9.
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    OCA/CA's discussion of various services offered by the Postal 
Service is germane to consideration of the term postal service. This 
does not mean, however, that this rulemaking is the appropriate forum 
for determining whether a specific service mentioned is a postal 
service or not. Facts necessary to make that determination are not 
available on this record. Moreover, it is unclear which services or 
their permutations the Postal Service continues to offer.
    Nonetheless, the Commission anticipates that the Postal Service 
will file the appropriate requests for a recommended decision to the 
extent that services of this type fall within the rule ultimately 
adopted.\178\
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    \178\ Previously, the Postal Service evaluated postal services 
in terms of processing of mail. A new service not involving mail is 
characterized as nonpostal. Report on Nonpostal Initiatives at 4. 
Implicitly, this evaluation is predicated only on hard copy mail. 
The Postal Service should reassess its conclusions in light of the 
rule ultimately adopted herein.
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    The Postal Service's apparent increasing use of alliances with 
private sector companies to provide services to the public merits brief 
mention. Such arrangements are not determinative of whether a service 
is or is not a postal service. That determination is dependent on the 
nature of the service provided. To the extent it substitutes for 
traditional mail service or is offered in fulfillment of the Postal 
Service's core mission, it may reasonably be considered to be a postal 
service. Illustratively, two examples may clarify the point. 
Pay@Delivery, a service no longer offered by the Postal Service, 
provided for the release of the buyer's funds to the seller after 
delivery via Priority Mail is confirmed by Delivery Confirmation. As a 
variation of collect on delivery, this service would appear to have the 
hallmarks of a postal service. On the other hand, any connection of

[[Page 67528]]

First-Class Phone Cards to postal service would appear to be tenuous at 
best.\179\
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    \179\ As the name suggests, this card is simply a prepaid phone 
card. The card, which is a product of an alliance between the Postal 
Service and AT&T, is sold at postal facilities.
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    United Parcel Service comments. UPS proposes that the term postal 
service be defined to mean ``the acceptance, collection, processing, 
transmission, or delivery of letters, printed matter, or packages 
weighing up to 70 pounds (including, but not limited to, partially or 
wholly electronic services), and other services supportive or ancillary 
thereto.'' \180\ This proposal differs from that advanced by the 
Commission in Order No. 1389 in two ways. First, UPS reads the 
Commission's proposed definition as possibly contingent on actual 
delivery by the Postal Service. Consequently, UPS would define postal 
service to encompass the various activities performed by the Postal 
Service, e.g., acceptance, transmission, etc., to preclude the argument 
that such services, if provided by the Postal Service exclusive of 
delivery, are not postal services. Second, UPS would explicitly include 
services that are either wholly or partially electronic.\181\
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    \180\ UPS Comments at 2.
    \181\ See id. at 2-4.
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    UPS raises a valid, if largely theoretical, point. Its alternative, 
however, could be construed as overly broad. Entities other than the 
Postal Service collect, process, and transmit mail prior to its deposit 
with the Postal Service. The definition suggested by UPS would expand 
the term postal service to include activities performed by entities, 
such as presort bureaus and consolidators, not subject to the 
Commission's jurisdiction. Inserting the phrase ``by the Postal 
Service'' after the term ``delivery'' would foreclose this construction 
and, as so modified, would represent an improvement over the definition 
proposed by the Commission. In lieu of adopting this language, however, 
the Commission concludes, for reasons previously discussed, that it 
would be preferable to define the term postal service based on 
statutorily derived terms.

VII. Comments

    Because it declines to adopt either its initially proposed rule or 
those suggested by any commenter, the Commission concludes that it 
would be appropriate to provide any interested person an opportunity to 
comment on the revised proposed rule. Accordingly, comments are due 
December 15, 2004. Reply comments may be filed on or before January 12, 
2005. It is the Commission's expectation to review such comments 
expeditiously and thereafter amend its rules as may be appropriate.
Ordering Paragraphs
    It is ordered:
    1. The Commission proposes to amend its Rules of Practice and 
Procedure by inserting new rule 5(s), 39 CFR 3001.5(s) as follows: 
Postal service means the receipt, transmission, or delivery by the 
Postal Service of correspondence, including, but not limited to, 
letters, printed matter, and like materials; mailable packages; or 
other services supportive or ancillary thereto.
    2. Interested persons may submit comments by no later than December 
15, 2004. Reply comments may also be filed and are due no later than 
January 12, 2005.
    3. The Motion for Late Acceptance of Comments of Lifetime 
Addressing, Inc., March 16, 2004, is granted.
    4. Proposed revisions suggested by commenters not adopted herein 
are deemed denied.
    5. The Secretary shall arrange for publication of this Order in the 
Federal Register.

    Dated: November 12, 2004.

    By the Commission.
Steven W. Williams,
Secretary.

List of Subjects in 39 CFR Part 3001

    Administrative practice and procedure, Postal service.

    For the reasons discussed above, the Commission proposes to amend 
39 CFR part 3001 as follows:

PART 3001--RULES OF PRACTICE AND PROCEDURE

    1. The authority citation for part 3001 continues to read as 
follows:

    Authority: 39 U.S.C. 404(b); 3603; 3622-24; 3661, 3663.

Subpart A--Rules of General Applicability

    2. Amend Sec.  3001.5 by adding new paragraph(s) to read as 
follows:


Sec.  3001.5  Definitions.

* * * * *
    (s) Postal service means the receipt, transmission, or delivery by 
the Postal Service of correspondence, including, but not limited to, 
letters, printed matter, and like materials; mailable packages; or 
other services supportive or ancillary thereto.

[FR Doc. 04-25567 Filed 11-17-04; 8:45 am]
BILLING CODE 7710-FW-P