[Federal Register Volume 75, Number 47 (Thursday, March 11, 2010)]
[Rules and Regulations]
[Pages 11452-11461]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-5212]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3020

Docket No. MC2009-19; Order No. 391


New Postal Product

AGENCY: Postal Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Commission is adding special postal services to the 
product lists. This action is consistent with changes in a postal 
reform law. Republication of the product lists is also consistent with 
a statutory provision. The Commission also has prepared a supporting 
library reference.

DATES:  Effective March 11, 2010 and is applicable beginning January 
13, 2010.

FOR FURTHER INFORMATION CONTACT:  Stephen L. Sharfman, General Counsel, 
202-789-6824 or <a href="/cdn-cgi/l/email-protection#80f3f4e5f0e8e5eeaef3e8e1f2e6ede1eec0f0f2e3aee7eff6"><span class="__cf_email__" data-cfemail="582b2c3d28303d36762b30392a3e35393618282a3b763f372e">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: Regulatory History, 74 FR 15784 (April 7, 
2009).

Table of Contents

I. Introduction and Summary
II. Procedural History
III. Commission Analysis
IV. Ordering Paragraphs

I. Introduction and Summary

    In Docket No. MC2008-1, the Commission found that six previously 
stated unclassified services were postal services.\1\ It directed the 
Postal Service to make an appropriate filing to add those services to 
the Mail Classification Schedule (MCS) product lists. In this 
proceeding, the Postal Service seeks to add seven postal services to 
the product lists. Based upon a review of the record, the Commission 
approves the addition of two products to the Market Dominant Product 
List and five products to the Competitive Product List as follows: 
Market Dominant Product List: Address Management Services (to replace 
Address List Services) and Customized Postage and [to the] Competitive 
Product List: Address Enhancement Service; Greeting Cards and 
Stationery; Shipping and Mailing Supplies; and International Money 
Transfer Service-Outbound and International Money Transfer Service-
Inbound (to replace International Money Transfer Service).
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    \1\ Docket No. MC2008-1, Review of Nonpostal Services Under the 
Postal Accountability and Enhancement Act, December 19, 2008, at 27-
38, 63-64 and Appendix 1 (Order No. 154). Order No. 154 was issued 
in proceedings instituted to fulfill the Commission's 
responsibilities under 39 U.S.C. 404(e)(3) to determine which 
services offered by the Postal Service were nonpostal services and 
which, if any, of those nonpostal services should be continued.
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    The Commission also confirms its finding in Order No. 154 that 
Stamp Fulfillment Services is a postal product and directs the Postal 
Service to make an appropriate filing within 60 days to add Stamp 
Fulfillment Services to the MCS.
    In addition, the Commission revises the draft MCS product 
descriptions for Greeting Cards and Stationery and for Shipping and 
Mailing Supplies. Product descriptions for these and other services 
covered by the Postal Service's request in this proceeding are set 
forth in a PRC Library Reference being filed in this docket. PRC-
MC2009-19-LR1. Subject to further possible modifications, these product 
descriptions are to be incorporated into the draft MCS at the time of 
its future publication. Finally, the Commission directs that the Postal 
Service file draft product descriptions for eight existing items that 
are to be included in Address Management Services.

II. Procedural History

    Background. In Order No. 154, the Commission ruled that six 
previously unclassified services were postal services. Those six 
services were Address Management Services; Customized Postage; Stamp 
Fulfillment Services; Greeting Cards; ReadyPost; and International 
Money Transfer Service. Because the Postal Service had not complied 
with the requirements of 39 U.S.C. 3642(d) and 39 CFR 3020.30 et seq. 
the Commission did not address whether these six services should be 
added to the MCS product lists. Instead, the Commission classified each 
of these services as either a market dominant or competitive product 
pending the outcome of classification proceedings that the Commission 
directed the Postal Service to institute within 60 days. Id. at 27-29, 
89.
    Postal Service Requests. On March 10, 2009, the Postal Service 
filed a request to add seven products to the MCS product lists: Address 
Management Services; Customized Postage; Address Enhancement Service; 
Greeting Cards, Stationery, and Related Items; Shipping and Mailing 
Supplies; International Money Transfer Service-Inbound; and 
International Money Transfer Service-Outbound.\2\
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    \2\ Request of the United States Postal Service to Add Postal 
Products to the Mail Classification Schedule in Response to Order 
No. 154, March 10, 2009 (Request).
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    One of the six products classified as a postal service by Order No. 
154, Stamp Fulfillment Services, was intentionally omitted from the 
March 10, 2009 filing. That omission was based upon the Postal 
Service's view that Stamp Fulfillment Services was no longer a postal 
service because of planned modifications to the service.
    Of the remaining five services classified as postal services by 
Order No. 154, two, Address Management Services (AMS) and International 
Money Transfer Service, were split into narrower services. Address 
Management Services was subdivided into a market dominant product 
called ``Address Management Services'' and a competitive product, 
``Address Enhancement Service.'' International Money Transfer Service 
was separated into an inbound service, ``International Money Transfer 
Service-Inbound'' and an outbound service, ``International Money 
Transfer Service-Outbound.''\3\ As a result of the foregoing changes, 
the March 10, 2009 filing proposed the addition of seven products to 
the MCS product lists in place of the six products discussed in Order 
No. 154.
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    \3\ Supplemental information regarding International Money 
Transfer Service-Inbound and International Money Transfer Service-
Outbound was subsequently provided by the Postal Service. See 
Supplemental Response of the United States Postal Service to Order 
No. 154, July 15, 2009.
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    Commission Order No. 198 provided formal notice of the Request, 
established the captioned docket to consider the Request, appointed an 
officer of the Commission to represent the interests of the general 
public, and set April 30, 2009 as the deadline for comments.\4\
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    \4\ PRC Order No. 198, Notice and Order Concerning Request to 
Add Seven Postal Services to the Mail Classification Schedule 
Product Lists, March 30, 2009 (Order No. 198).
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    Thereafter, on May 8, 2009, the Postal Service filed a notice of an 
amendment to its March 10, 2009 filing.\5\ The amendment was made to 
reflect the manner in which one of the components of Address Management 
Services would be offered.\6\ Commission Order No. 215

[[Page 11453]]

was issued on May 12, 2009, providing formal notice of the Amended 
Request and allowing additional comments.\7\
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    \5\ Notice of the United States Postal Service of Amendment to 
Its Request to Add Postal Products to the Mail Classification 
Schedule in Response to Order No. 154, May 8, 2009 (Amended 
Request).
    \6\ More specifically, two services previously offered as stand-
alone components of Address Management Services (i.e., FASTforward 
MLOCR service and FASTforward Move Update Notification) were being 
combined under the name FASTforward MLOCR service. The charge for 
FASTforward MLOCR service remained unchanged and there was no longer 
to be a separate charge for FASTforward Move Update Notification 
service.
    \7\ PRC Order No. 215, Notice and Order Concerning Amendment to 
Request to Add Seven Postal Services to the Mail Classification 
Schedule Product Lists, May 12, 2009 (Order No. 215).
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    Comments. The following parties filed comments in response to Order 
No. 198 and Order No. 215: the National Association of Retail Ship 
Centers (NARSC); United Parcel Service (UPS); Associated Mail and 
Parcel Centers (AMPC); and the Public Representative.\8\ The points 
raised in their respective comments are addressed in section III., 
Commission Analysis, below.
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    \8\ Comments of National Association of Retail Ship Centers, 
April 30, 2009 (NARSC Comments); Comments of United Parcel Service 
in Response to Notice and Order Concerning Request to Add Seven 
Postal Services to the Mail Classification Schedule Product Lists, 
April 30, 2009 (UPS Comments); Comments of Associated Mail and 
Parcel Centers, May 1, 2009 (AMPC Comments); Comments of the Public 
Representative, April 30, 2009 (Public Representative Comments); and 
Supplemental Comments of the Public Representative in Response to 
Commission Order No. 215, May 19, 2009 (Public Representative 
Supplemental Comments).
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    Chairman's information requests. On May 21, 2009, the Chairman 
issued an information request to the Postal Service.\9\ The Postal 
Service submitted its response on May 29, 2009.\10\ Thereafter, on 
August 5, 2009, the Chairman issued a second information request,\11\ 
to which the Postal Service responded on August 13, 2009.\12\
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    \9\ Chairman's Information Request No. 1, May 21, 2009 (CHIR No. 
1).
    \10\ Responses of the United States Postal Service to Chairman's 
Information Request No. 1, May 29, 2009 (Response to CHIR No. 1).
    \11\ Chairman's Information Request No. 2, August 5, 2009 (CHIR 
No. 2).
    \12\ Responses of the United States Postal Service to Chairman's 
Information Request No. 2, August 13, 2009 (Response to CHIR No. 2).
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    Additional comments. Following the Postal Service's filing of its 
response to CHIR No. 1, a series of additional comments and responses 
were filed by several parties: the Public Representative; the Greeting 
Card Association (GCA); NARSC; and the Postal Service.\13\ While the 
rules of practice do not provide for such filings, the Commission will 
accept each of these filings in order to ensure that all arguments and 
comments of the participants are considered.\14\ A discussion of the 
points raised in these comments can be found in section III., 
Commission Analysis, below.
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    \13\ Comments of the Public Representative on the Postal 
Service's Legal Authority to Set Fees for Postal Services Without 
Commission Approval, June 9, 2009 (Public Representative Additional 
Comments); Comments of the Greeting Card Association, May 29, 2009 
(GCA Comments); Response of the United States Postal Service to 
Intervenor and Public Representative Comments, June 11, 2009 (Postal 
Service Reply Comments); and Comments of National Association of 
Retail Ship Centers, June 17, 2009 (NARSC Additional Comments).
    \14\ Two of the parties, GCA and the Public Representative, 
sought leave to file these additional comments. See GCA Motion for 
Leave to Submit Comments Out of Time, May 29, 2009; and Motion for 
Leave to File Comments on the Postal Service's Legal Authority to 
Set Fees for Postal Services Without Commission Approval, June 9, 
2009. These motions are granted. With respect to the remaining 
filings, the Commission is persuaded that the additional information 
provided by these filings will clarify the record. Accordingly, 
these additional submissions are accepted for filing. The parties 
are, however, cautioned that failure to seek leave to file future 
untimely submissions, or submissions not otherwise authorized by the 
rules of practice, may result in their rejection.
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III. Commission Analysis

    The Postal Service requests the addition of seven services to the 
product lists specified in the MCS. For the reasons given below, the 
Commission concludes that the following seven postal services should be 
included in the MCS and, as appropriate, be added to the product lists: 
Address Management Services; Customized Postage; Address Enhancement 
Service; Greeting Cards and Stationery; Shipping and Mailing Supplies; 
International Money Transfer Services-Outbound; and International Money 
Transfer Services-Inbound. For the reasons given below, the Postal 
Service is directed to make an appropriate filing within 60 days to add 
Stamp Fulfillment Services to the Market Dominant Product List.
A. Market Dominant Products
    1. Address Management Services
    Address Management Services (AMS) is the new name given by the 
Postal Service to the market dominant product previously called 
``Address List Services''. See Request, Attachment A, at 1. Address 
List Services (ALS) was added to the MCS product lists by Order No. 43 
and contained only four services.\15\ As amended, the Postal Service's 
Request in this proceeding would increase the number of services from 4 
to 27.\16\ The AMS product consists of a number of value-added services 
that enable bulk business mailers to better manage the quality of their 
mailing lists. The AMS product also includes diagnostic and other 
services that evaluate address management software for accuracy.\17\
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    \15\ Docket No. RM2007-1, Order Establishing Ratemaking 
Regulations for Market Dominant and Competitive Products, October 
29, 2007 (Order No. 43). Those services were Correction of Address 
Lists; Change-of-Address Information for Election Boards and 
Registration Commissions; ZIP Code Sortation of Address Lists; and 
Address Sequencing. See also Docket No. RM2007-1, United States 
Postal Service Submission of Initial Mail Classification Schedule in 
Response to Order No. 26, September 24, 2007, Appendix at 79.
    \16\ Compare Request, Attachment A, at 1-12 (AMS Product 
Descriptions) with Amended Request at 1-2 (incorporation of 
FASTforward Move Update Notice (FFMUN) into FASTforward MLOCR).
    \17\ Address Management Services differs from the competitive 
product, Address Enhancement Service, discussed, infra. Whereas 
Address Management Services consists of address update services and 
address data files originated by the Postal Service, such as ZIPCode 
+ 4 data, the competitive product, Address Enhancement Service, 
consists of three address matching services that compete with 
services provided by private address management software developers.
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    No party opposes adding Address Management Services to the Market 
Dominant Product List within the Special Services class. Request at 2, 
n.3. However, in his initial and supplemental comments, the Public 
Representative observes that the Postal Service's Request fails to 
provide an adequate discussion of statutory factors and objectives.\18\ 
Id. The Postal Service responds by providing a more complete discussion 
of the following objectives and factors: Objective No. 1 (maximization 
of incentives to reduce costs and increase efficiency); Objective No. 3 
(maintenance of high quality service standards established under 
section 3691); Factor No. 5 (the degree of mail preparation by mailers 
for delivery into the postal system and its effect on cost reduction); 
and Factor No. 12 (the need to increase efficiency, reduce costs, and 
maintain high quality, affordable services). Response to CHIR No. 1, 
Question 4. Upon consideration of the information provided in the 
Request and in the subsequent response to CHIR No. 1, the Commission 
concludes that the AMS product should be added to the Market Dominant 
Product List.
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    \18\ The Public Representative also commented on the absence of 
any financial information for the Address Management Services 
product. Public Representative Comments at 5-6; and Public 
Representative Supplemental Comments at 4. Historically, the Postal 
Service has not been required to produce detailed cost data for AMS. 
Consequently, financial information for this product does not exist. 
However, by adding the Address Management Services product to the 
MCS, the Postal Service will be required to develop a cost 
methodology for this product. See section III.B., Reporting 
Procedures for Approved Market Dominant Products, infra, or a 
discussion on reporting financial information for this product.
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    The Public Representative also questions whether the changes 
proposed in the Amended Request to FASTforward MLOCR and FASTforward 
Move Update Notification constitute a rate change requiring prior 
notice and compliance with other applicable provisions of 39 CFR part 
3010. Public Representative Supplemental Comments at 2-3. 
Alternatively, the Public Representative acknowledges that the Amended 
Request could be construed as a proposal to add new products to the 
Market Dominant Product List and that

[[Page 11454]]

without approved rates in effect, the Amended Request would not, by 
definition, produce a rate change. Id. Under the unique circumstances 
presented in this case, the Commission finds the latter 
characterization more persuasive and that the Amended Request does not 
present a rate change proposal.
    Finally, the Public Representative asserts that the Postal Service 
has failed to include additional value-added services in its Request. 
Public Representative Comments at 6-7. The services referred to by the 
Public Representative are: Advance Notification and Tracking System; 
MAC Batch System Certification; MAC Gold System Certification; MAC 
System Certification; Mailpiece Quality Control Certification; PAGE 
System Certification; PAVE System Certification; and Z4INFO. The Public 
Representative argues that all ``postal services'' must be listed in 
the MCS under a particular product, and that it appears the Postal 
Service is attempting to set fees for ``postal services'' without 
Commission review and approval. Public Representative Additional 
Comments at 2-3.
    The Postal Service argues that the omission from its Request of the 
services at issue is not an attempt to take advantage of a regulatory 
``no man's land'' by offering services not included in the MCS, as 
alleged by the Public Representative. Response to CHIR No. 1, Question 
2; and Postal Service Reply Comments at 10. The Postal Service agrees 
that these value-added services are, in fact, postal services, but 
explains that these services are designed to ``minimize, rather than 
maximize'' revenue and thus, do not necessarily need to be added to the 
MCS. Response to CHIR No.1, Question 2(b). The Postal Service further 
argues that the Commission has the authority to ``forbear'' from 
regulating these services as ``products'' and thereby omit these 
services from the MCS.\19\ Id.; and Postal Service Reply Comments at 
10-12. In lieu of adding the services to the MCS, the Postal Service 
offers to provide the Commission with annual fee and revenue 
information on these services with the understanding that the 
Commission might, in the future, decide to regulate these services as 
``products'' if the information provided by the Postal Service were to 
suggest that such regulation were necessary. CHIR No.1, Question No. 
2(b). In total, AMS will include 36 services.
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    \19\ Initially, the Postal Service argued that the ``postal 
services'' were ``postal activities'' that were designed to 
``minimize, rather than maximize'' revenue and, as such, did not 
need to be added to the MCS. See id.
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    As the Postal Service recognizes, Congress has given the Commission 
jurisdiction over the postal services at issue. While the Postal 
Service asserts that the Commission has the authority to ``forbear'' 
from exercising that jurisdiction, it cites no clear legal authority 
for exercising such forbearance. Instead, the Postal Service advances 
several policy arguments to support the reasonableness of 
forbearance.\20\
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    \20\ See Response to CHIR No.1, Questions 2 and 3; and Postal 
Service Reply Comments at 10-12.
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    The Commission is not persuaded by these policy arguments. Without 
clear authority to forbear from exercising jurisdiction, the Commission 
will follow its jurisdictional mandate from Congress and direct that 
these services be added to the Market Dominant Product List as elements 
of Address Management Services. In addition, the Postal Service will be 
required to file draft MCS language within 30 days of the date of this 
order for those services.\21\
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    \21\ The Commission rejects the Public Representative's 
suggestion that the Postal Service be required ``to provide a full 
accounting of all 'postal services' not listed on the draft MCS.'' 
Public Representative Additional Comments at 2. In Order No. 154 at 
35, the Commission recognized that ``it is possible for something to 
be inadvertently omitted when attempting to compile a complete list 
of activities ... [and that] ... any omitted activities can be 
explored in the next phase of this case.'' See Docket No. MC2008-1, 
Review of Nonpostal Services Under the Postal Accountability and 
Enhancement Act, December 19, 2008 (Order No. 154). Accordingly, in 
instituting Phase II of the proceedings in Docket No. MC2008-1, the 
Commission directed the Postal Service to file a sworn statement 
providing ``details of each retail program for which information may 
have been inadvertently omitted in response to Order No. 74 and 
which the Postal Service seeks to have classified as a postal 
service or, alternatively, to continue to offer as a nonpostal 
service.'' Docket No. MC2008-1 (Phase II), Notice and Order 
Initiating Phase II Proceedings, January 9, 2009, at 4. The Postal 
Service made no such filing in that proceeding. Thus, the Commission 
views the record as complete in that regard.
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    While the Commission is legally obligated to exercise its 
jurisdiction, it also possesses discretionary authority to determine 
how that jurisdiction will be exercised. Given the small and 
intermittent revenues produced by these services and the current lack 
of reliable costing methodologies, the Commission will not subject them 
to the full range of regulatory review. Instead, the Commission will 
require only that the Postal Service report fee and revenue information 
(if any) for those services annually as part of its Annual Compliance 
Report. The information to be filed shall be in a form similar to 
Appendix A to Docket No. MC2008-1, Response of the United States Postal 
Service to PostCom et al. Motion to Sever From This Proceeding the 
Consideration of Those Previously Unregulated Services That the Postal 
Service Asserts are ``Postal Services,'' December 12, 2008.\22\ If the 
need for more extensive regulatory reporting becomes apparent, the 
Commission may revisit the issue.
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    \22\ The Postal Service has stated its willingness to provide 
information in this form. Response to CHIR No. 1, Question 2.
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    2. Customized Postage
    The Postal Service proposes to add the Customized Postage program 
to the Market Dominant Product List as a stand-alone Special Services 
product. The Customized Postage program authorizes vendors to provide 
their customers with Postal Service authorized postage consisting of 
customer-selected images. There are currently four vendors 
participating in the Customized Postage program.\23\
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    \23\ See www.usps.com for information on the respective vendors 
(keyword search: Customized Postage).
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    No party objects to adding Customized Postage to the Market 
Dominant Product List. However, the Public Representative observes that 
the Postal Service's Request provided only a minimal discussion as to 
how the proposed Customized Postage product achieved the objectives of 
39 U.S.C. 3622(b), while taking into account the factors of 39 U.S.C. 
3622(c). Public Representative Comments at 4-5. In its response to CHIR 
No. 1, the Postal Service provided a more complete discussion of the 
following objectives and factors: Objective No. 2 (rate predictability 
and stability) and Objective No. 5 (assurance of adequate revenues to 
maintain financial stability); and Factor No. 8 (relative value to the 
people of the kinds of mail matter and the desirability and 
justification for special mail classifications). Response to CHIR No. 
1, Question 4.
    Upon review of the information submitted, the Commission concludes 
that the Customized Postage program satisfies the requirements of 
sections 3622(b) and (c). The Commission, therefore, approves the 
addition of the Customized Postage program to the Market Dominant 
Product List.
    3. Stamp Fulfillment Services
    Stamp Fulfillment Services (SFS) provide shipping and handling for 
all orders placed with the Stamp Fulfillment Services office in Kansas 
City, Missouri. Orders for postage stamps, personalized stamped 
envelopes, and philatelic sales can be placed by fax, mail, online, or 
telephone; orders for Officially Licensed Retail Products (OLRP) can be 
placed

[[Page 11455]]

only online.\24\ Currently, the Postal Service imposes a $1.00 charge 
for fulfilling postage stamp, philatelic, and stamped envelope orders. 
Id. at 10. The Postal Service maintains that the $1.00 charge ``is more 
like a handling charge intended to recover SFS costs for preparing 
orders for shipment, rather than shipping costs.'' Id. at 11. For 
personalized stamped envelopes, the Postal Service also imposes an 
additional and higher shipping and handling charge.
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    \24\ Request at 12, n.13. The use of customized software enables 
online OLRP orders to be ``shipped at [the] actual postage rates for 
the zone and weight of the shipment. Such an approach would not be 
workable for mail and fax orders.'' Id. Consequently, shipping 
prices for OLRP orders are not at issue in this proceeding.
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    In its Request, the Postal Service states that it ``is not 
requesting the addition of SFS to the MCS.'' Id. at 10. Instead, it 
plans to eliminate the $1.00 handling charge and implement an 
alternative fee structure for shipping. In doing so, the Postal Service 
argues that the alternative fee structure, which would utilize existing 
postage prices, eliminates the justification for adding SFS to the MCS. 
Id. at 12-13.
    In conceptual terms, the Postal Service's alternative fee structure 
would ``recover postage for SFS shipments directly, while recovering 
handling costs through the prices charged for the items.'' Id. at 11. 
The Postal Service proposes this alternative pricing structure because 
customers who mail or fax their SFS orders often find it difficult to 
calculate the zone and weight for their orders, particularly larger 
orders, using the existing fee schedules. Thus, the Postal Service 
wants to ensure that customers can ``readily determine and pay the 
total charge for an order, including shipping, at the time the order is 
placed.'' Id. at 12.
    The Postal Service offers several examples to illustrate how an 
alternative fee structure might work. Id. The four examples reference 
existing market dominant and competitive postage prices, i.e., First-
Class Mail and Priority Mail prices, as shipping charges for 
hypothetical SFS orders. However, the Postal Service states that the 
shipping charge for any particular SFS order:

    would not always be the actual postage that would otherwise be 
charged based on the zone and weight for the mail piece being 
shipped. Instead, existing postage prices will be selected, for 
application to shipments that fall within specified parameters.

Id. The Postal Service states that it is ``still working on the 
specific postage prices that it will charge for shipments, but plans to 
complete the process soon.'' Id. at 13.
    The Postal Service's alternative pricing structure for shipping SFS 
orders raises concerns. More specifically, the Public Representative 
states that the four examples provided by the Postal Service ``imply 
that there are situations where the Postal Service is altering the 
ordinary tariff rate postage for SFS orders.'' Public Representative 
Comments at 15. The Public Representative further states that if the 
Postal Service's alternative pricing structure for SFS orders alters 
the ordinary tariff rate then ``the Postal Service should be required 
to add this product to the Market Dominant Product List and to obtain 
Commission approval for these special rates for SFS services.'' Id.
    Additionally, in Order No. 154, the Commission determined that 
``handling and shipping fees associated with stamp purchases and 
personalized stamped envelopes represent fees for postal 
services.''\25\ (Order No. 154 at 63, emphasis added.) The planned 
elimination of the handling charge would address only one of the bases 
for requiring the addition of SFS to the MCS product list. The Postal 
Service's proposed use of ``alternative'' shipping fees would still 
require the Commission to classify SFS as a market dominant postal 
product since, as the Public Representative points out the four pricing 
examples offered by the Postal Service suggest that ``the Postal 
Service will not be charging tariff rates for certain fulfillment 
orders ... .'' Id. at 15. Rather, the Postal Service intends to use 
rates from a tariff schedule that are weight- and distance-related and 
apply those rates as shipping charges without regard to the weight of 
the item or the zone to which it is actually being sent.\26\ Id.
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    \25\ In making this determination, the Commission observed that 
if fees for handling and shipping services ``were incurred solely in 
connection with philatelic sales, classifying such services as 
nonpostal would be reasonable.'' Id. However, the Commission found 
that the Postal Service ``often can not distinguish philatelic from 
regular stamp purchases ... `` citing the Initial Response of the 
United States Postal Service to Order No. 74, June 9, 2008, at 14. 
Id.
    \26\ This selective use of rates published in a tariff schedule 
does not constitute the application of tariff rates as those rates 
were intended to be applied.
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    The Commission is sensitive to the Postal Service's efforts to 
improve the ordering process for customers, particularly for mail and 
fax customers. A simplified fee structure derived from existing tariff 
rates could achieve the result the Postal Service desires. The Postal 
Service can, if it desires, propose simplified SFS shipping prices. In 
doing so, the Postal Service has an opportunity to develop simplified 
pricing for shipping of SFS orders that improves the likelihood 
customers will complete the ordering process and increase postal 
revenues. Should the Postal Service propose the use of simplified 
shipping fees as an alternative to tariff postage that would, of 
course, itself require the Postal Service to file an appropriate 
request to add SFS to the MCS product lists. Pending receipt of any 
such proposal, the Commission reaffirms its findings in Order No. 154, 
and the Postal Service is authorized to continue to charge a $1.00 
handling fee. The continued collection of the handling fee, however, 
requires the filing of a request to add SFS to the Market Dominant 
Product List. That filing is due within 60 days from the date of this 
order.
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    \27\ The Address Enhancement Service product is different from 
the market dominant Address Management Services product. For a more 
detailed discussion of Address Management Services, see section 
III.A.1., Address Management Services, supra.
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B. Reporting Procedures for Approved Market Dominant Products
    With the exception of the eight Address Management Services which 
the Postal Service is directed to add to the MCS as elements of Address 
Management Services (section III.A.1, Address Management Services, 
supra), the Commission expects the Postal Service to submit cost, 
revenue, and volume data at the product level for all remaining market 
dominant products. Previously, the Postal Service has not reported 
detailed cost data for Address Management Services, Customized Postage, 
and Stamp Fulfillment Services. Cost methodologies were not developed 
for these services, and the Commission recognizes that the existing 
data systems may not provide adequate cost, revenue, and volume data 
for many of the separate services within certain products such as 
Address Management Services. The Postal Service is currently 
``reviewing all its internal reporting systems consistent with its 
plans to collect and report cost, revenue, and volume data in the next 
[Annual Compliance Report]....'' Response to CHIR No. 1, Question 3. 
The Postal Service further states that ``cost methodologies will be 
developed (and submitted to the Commission for prior review) to 
generate additional information.'' Id. The Commission expects the 
Postal Service to report on the status of its efforts prior to the next 
Annual Compliance Report.
C. Competitive Products
    1. Address Enhancement Service
    The Postal Service proposes to add Address Enhancement Service 
(AES) to the Competitive Product List as a stand-alone product.\27\ 
Address Enhancement

[[Page 11456]]

Service is the name given to several separate services: Address Element 
Correction (AEC), Address Matching System Application Program Interface 
(AMS API), and Topographical Integrated Geographic Encoding and 
Referencing (TIGER/ZIP + 4). Each service is designed around one or 
more software packages that improve address quality and reduce 
undeliverable-as-addressed mail.
    In its Request, the Postal Service proposes MCS language that 
contains descriptions and prices for each of the separate services 
within the proposed Address Enhancement Service product. The Postal 
Service's Request also provides a Statement of Justification that 
includes confidential FY 2008 cost and revenue figures that were filed 
under seal for the proposed product. In response to CHIR No. 1, the 
Postal Service supplemented its Request with supporting financial 
worksheets that were also filed under seal. Response to CHIR No. 1, 
Question 1.
    The Public Representative raised concerns regarding the AMS API 
service, contending that it appears to be a bundle of six market 
dominant Address Management Services databases that could potentially 
be priced anti-competitively, i.e., at less than the sum of the prices 
for each database in the bundle. Public Representative Comments at 13. 
If priced in this way, the Public Representative alleges ``there would 
be no meaningful competition since a competitor could not purchase the 
individual unbundled market dominant products at a price that would 
allow it to repackage those services and compete with the Postal 
Service's competitive bundled service on price.'' ld., n.19.
    In response to the Public Representative's comments, the Postal 
Service further describes the features of the AMS API service and its 
proposed pricing. Postal Service Reply Comments at 6. According to the 
Postal Service, the AMS API service is not merely six bundled market 
dominant Address Management databases. -The AMS API service provides a 
``core set of compiled address-matching software instructions (computer 
code), developed by the Postal Service'' that interpret data from the 
six market dominant Address Management databases.\28\ Id. at 5. The AMS 
API address-matching software package is offered to address management 
vendors to incorporate in and thereby enhance their Address Management 
software when applied to the data from the market dominant databases. 
Id.
---------------------------------------------------------------------------

    \28\ AMS API includes the following six market dominant 
databases within the Address Management Services product: City 
State, Delivery Point Validation, eLot, LACS\Link\, Five-Digit ZIP, 
and ZIP+4.
---------------------------------------------------------------------------

    The Postal Service also explains that the price for AMS API is 
greater than the sum of the prices for the six market dominant 
databases combined. Address Management software vendors who want to 
incorporate AMS API into their own Address Management software must pay 
a reseller license fee of $16,700, as well as separate annual fees for 
additional licenses in order to distribute the databases to multiple 
customers along with their software. Consequently, the reseller license 
fee plus the annual fees for additional database licenses are greater 
than the sum of the individual price of each of the six market dominant 
databases. Id. The Postal Service has submitted revised MCS language to 
clarify the pricing of the AMS API service. See id. at 6.
    The Commission approves the addition of Address Enhancement Service 
to the Competitive Product List based upon the revised MCS language 
provided by the Postal Service. The Postal Service's further 
explanation of the AMS API service and the six market dominant Address 
Management databases clarifies that the price relationships would not 
have an anti-competitive effect.
    2. Greeting Cards and Stationery
    In Order No. 154, the Commission concluded that the sale of 
greeting cards and stationery (Greeting Cards) was a postal service and 
directed the Postal Service to file a request to add Greeting Cards to 
the MCS. Order No. 154 at 89.\29\ In Attachment A to its Request, the 
Postal Service proposes the following classification language:
---------------------------------------------------------------------------

    \29\ The Commission's ruling in ordering paragraph 1 refers 
solely to ``Greeting Cards.'' However, it is clear from the 
Commission's discussion of the greeting card status issue that the 
Commission used the term ``Greeting Cards'' to refer not only to 
greeting cards, per se, but to other stationery items. Id. at 34-35. 
One of the purposes of the instant proceeding is to determine the 
appropriate scope of the product.
---------------------------------------------------------------------------

2XXX Greeting Cards, Stationery, and Related Items

2XXX.1 Description
Greeting Cards, Stationery, and Related Items include items designed to 
be used to mail personal messages.
Greeting cards--Greeting cards include cards with envelopesand may be 
sold individually or as sets.
Stationery--Stationery includes paper, envelopes, postcards, note 
cards, and note pads and are sometimes packaged as sets[.]
    Parties' comments. NARSC objects to any and all retail sales of 
greeting cards, stationery, and related items by the Postal Service on 
several grounds, including the following: that these products are 
nonpostal products; that the Postal Service enjoys a competitive 
advantage due to its size, purchasing power, and exemption from local 
sales tax laws; that the addition of 32,000 Postal Service retail 
outlets to the existing 64,000 retail outlets of private firms would 
overburden an already crowded marketplace; that the Postal Service has 
failed to document projected expenses and revenues; and that the sale 
of such items will interfere with the performance of core Postal 
Service responsibilities. See NARSC Comments and NARSC Additional 
Comments.
    AMPC takes issue with the scope of the ``Greeting Card'' 
description in the Postal Service's proposed MCS language, alleging 
that the sale of a full line of greeting cards would constitute a 
nonpostal service and should be precluded. See AMPC Comments. Instead, 
AMPC requests that the definition of ``greeting cards'' in the MCS be 
limited to ``those cards which relate directly to specific stamps or 
Official Licensed Retail Product programs.'' Id.
    The Public Representative supports adding Greeting Cards, 
Stationery, and Related Items to the MCS as a competitive product, 
subject to certain limitations. Public Representative Comments at 10. 
First, the Public Representative notes that the term ``Related Items'' 
had no definition and that it should either be defined or excluded from 
the MCS. Id., n.12. Second, the Public Representative submits that the 
availability of all of these items should be limited to postal retail 
locations. Id. at 10-11. Third, the Public Representative takes the 
position that the Postal Service should be required to provide adequate 
financial data to support the addition of these products to the MCS, or 
should be required to incorporate into the MCS its pricing policies 
with respect to these items. Id. at 11-12.
    In its June 11, 2009 response to the comments of NARSC, AMPC, and 
the Public Representative, the Postal Service argues that the 
Commission already found greeting cards and stationery to be postal 
services in Order No. 154; these products will be a valuable addition 
to the market; the sale of these products is not a ``non-core'' 
activity; all greeting cards, not just postal themed cards, foster use 
of the mails; and the fact that the sales of these products will 
compete with sales by others does not provide a basis for rejecting the 
proposed addition of these products to the Competitive Product

[[Page 11457]]

List. Postal Service Reply Comments at 2-3. The Postal Service also 
takes issue with the Public Representative's proposal to prohibit the 
availability of greeting cards at nonpostal retail locations. Id. at 3-
4. Notwithstanding this opposition to the Public Representative, the 
Postal Service suggests that the issue need not be decided at this time 
since the Postal Service's current plan is to offer greeting card 
products only through Postal Service retail channels. Id. at 4.
    On May 29, 2009, GCA filed comments supporting the proposed 
addition of greeting cards, stationery, and related items to the MCS. 
GCA Comments at 2. GCA asserts that the proposal will benefit its 
members, consumers, and the Postal Service by giving consumers 
convenient and additional opportunities to purchase greeting cards that 
will be sent through the mail. Id. at 1. GCA claims that the effect of 
the Postal Service's proposal will be to increase the total use of 
greeting cards, not to simply reallocate greeting card sales among 
retail outlets. Id.\30\
---------------------------------------------------------------------------

    \30\ NARSC responded to GCA's comments by filing additional 
comments on June 17, 2009, in which it opposed Commission acceptance 
of GCA's comments because of their untimeliness; challenged the 
adequacy of the Postal Service's response to CHIR No.1 regarding 
costs and cost coverage; and elaborated further on the points raised 
in its initial comments. As stated in n.14, supra, and accompanying 
text, the Commission is granting GCA's motion for leave to file out 
of time and is accepting all additional comments not otherwise 
authorized by the Commission's rules of practice, including the 
NARSC Additional Comments.
---------------------------------------------------------------------------

    Commission analysis. While the Postal Service is correct that Order 
No. 154 determined that greeting cards and stationery were postal 
services, the issue of whether to add them to the Competitive Product 
List was not before the Commission in that proceeding. The issue is now 
pending, and section 3642(b)(3) requires the Commission to give due 
consideration to ``the availability and nature of enterprises in the 
private sector engaged in the delivery of the product involved' and to 
``the likely impact of the proposed action on small business concerns 
....''
    NARSC's argument that the Postal Service enjoys certain competitive 
advantages is countered, in part, by the Postal Service's response that 
it has been selling greeting cards and stationery as a part of its 
retail product mix for over a decade. Request, Attachment E, at 4. As 
NARSC itself points out, there are already other large retail outlets 
that sell greeting cards and stationery. NARSC Comments at 1. Against 
this history, NARSC's general allegations of harm are not persuasive, 
particularly, as discussed below, given the limitations imposed on the 
sale of such items. Furthermore, the Commission can not simply assume 
that sales of greeting cards and stationery by the Postal Service will 
necessarily decrease sales by other retailers, large or small. See GCA 
Comments at 1.
    A related, but separate, aspect of NARSC's allegation of unfair 
competitive advantage relates to the Postal Service's pricing of 
greeting cards and stationery. NARSC suggests that in selling such 
items, the Postal Service may not have been recovering its costs. NARSC 
Comments at 1-2. In that connection, NARSC questions whether the Postal 
Service has adequately determined the costs attributable to the sale of 
these items. NARSC Additional Comments at 1. The Public Representative 
raises similar concerns, arguing that the Postal Service should either 
file adequate financial data to support the addition of greeting cards 
and stationery to the MCS, or alternatively, file a narrative 
description of its pricing policies. Public Representative Comments at 
12.
    The Postal Service argues that any danger that these items will not 
cover their costs or will unfairly compete in the marketplace has been 
eliminated because they are now subject to regulation by the 
Commission. Postal Service Reply Comments at 2. In that connection, the 
Postal Service states that its policy will, in general, be to price 
greeting cards and stationery with ``at least a 50 percent mark-up over 
the wholesale price'' and that as part of its effort to comply with the 
PAEA, it has already begun to track costs of greeting cards and 
stationery products.\31\ Request, Attachment E, at 2. The Postal 
Service therefore believes that this product will be able to generate 
revenues that cover its attributable costs and will not undermine the 
contribution of competitive products to the coverage of institutional 
costs. Id. at 2-3. The Postal Service's contentions are supported by 
information provided under seal in response to CHIR No.1.\32\ The 
information provided by the Postal Service convinces the Commission 
that the proposed sale of greeting cards and stationery is likely to 
cover attributable costs and should not undermine the ability of 
competitive products overall to contribute to the coverage of 
institutional costs.
---------------------------------------------------------------------------

    \31\ This cost information must be presented in the Postal 
Service's Annual Compliance Report as required by 39 U.S.C. 3652, 
and is reviewed by the Commission in issuing its Annual Compliance 
Determination, as required by 39 U.S.C. 3653.
    \32\ See library reference USPS-MC2009-19/NP-2, Nonpublic 
Supporting Materials Filed in Response to CHIR No.1, Relating to 
Competitive Products. This information was on file at the time the 
NARSC Additional Comments were filed. NARSC incorrectly states that 
the Postal Service failed to address the Commission's request for 
this information. NARSC Additional Comments at 1.
---------------------------------------------------------------------------

    AMPC suggests that the sale of greeting cards be limited to those 
``which relate directly to specific stamps or Official Licensed Retail 
Product programs.'' AMPC Comments. In Order 154, however, the 
Commission expressly recognized that not all greeting cards identified 
by the Postal Service in its response to Order No. 74 were directly 
related to specific stamps or OLRP programs, when it stated that 
``[i]ntellectual property, however, is not featured on every card.'' 
Order No. 154 at 34, n.72.
    Nevertheless, AMPC is correct in stating that the activities 
determined to be postal services were those described by the Postal 
Service in its response to Order No. 74. Id. at 35. That response 
included a representation that the Postal Service had no plans to offer 
a full line of greeting cards. Id. at 34. By contrast, the Request in 
this proceeding includes the broadly worded MCS product description 
quoted above that could be read as encompassing a full line of greeting 
cards.
    To obtain a more current statement of the Postal Service's 
intentions, CHIR No. 2 requested that the Postal Service provide 
information regarding its future plans to sell greeting cards. CHIR No. 
2, Question 2(d).\33\ In its response, the Postal Service describes the 
range of greeting card formats that it anticipates offering. Response 
to CHIR No. 2, Questions 2(a).\34\ In addition, the Postal Service, 
once again, states that it does not intend to offer a full line of 
greeting cards. Id. This commitment confirms the Postal Service's 
previous position in Docket No. MC2008-1 and appears to be responsive 
to AMPC's concerns.
---------------------------------------------------------------------------

    \33\ CHIR No. 2 was prompted, in part, by a Postal Service 
solicitation issued as part of an investigation of the possibility 
of offering an expanded line of greeting cards. Federal Business 
Opportunities (FedBizOpps.com), Solicitation Number 2B-09-A-0018, 
posted May 21, 2009 (Solicitation).
    \34\ For example, the Postal Service states that it ``does not 
intend to offer a 'full line' of greeting cards'' and that a ``full 
line'' at standard greeting card stores `` is ``displayed on well 
over 200 linear feet of fixtures with additional space allocated for 
Stationery and Related items,'' whereas the Postal Service intends 
to provide ``an average of 4-8 feet of display space'' and that a 
``full line'' of greeting cards ``includes all seasonal cards and 
various specialty lines to target ethnic and geographic patterns,'' 
whereas the Postal Service could offer only ``a very limited holiday 
selection'' of cards.
---------------------------------------------------------------------------

    The Public Representative suggests that the sale of greeting cards 
and stationery be limited to retail postal locations. The Public 
Representative

[[Page 11458]]

states that the availability of these products at such retail locations 
was understood to be the basis on which Order No. 154 was issued. 
Public Representative Comments at 10-11. The Postal Service opposes the 
suggestion, but indicates that the issue need not be addressed because 
it has no plans to offer these items through any other retail channels 
and does not object to the limitation requested by the Public 
Representative. Postal Service Reply Comments at 4.
    The Postal Service's proposed MCS language includes the term 
``Related Items.'' The term is not defined. The Public Representative 
objects to its inclusion in the MCS. Public Representative Comments at 
10, n.12. In its response to CHIR No. 2, the Postal Service offers a 
possible definition of ``Related Items,'' \35\ but notes that it was 
``in the process of discontinuing all 'related items' in both retail 
channels [i.e., retail lobbies and usps.com].'' Id., Question 1(b). The 
Postal Service also states that it ``might offer boxed stationery or 
note cards to promote the use of First-Class Mail, but has not 
developed plans to do so at this time.'' Id., Question 1(c). (Emphasis 
added.).
---------------------------------------------------------------------------

    \35\ ``Related items could include boxed note cards, stationery 
sets, and boxed greeting cards for everyday occasions or holidays.'' 
Response to CHIR No. 2, Question 1(a).
---------------------------------------------------------------------------

    The Commission approves adding sales of Greeting Cards and 
Stationery to the Competitive Product List. However, the proposed draft 
MCS language will be revised to limit the availability of this product 
to retail postal locations and the Postal Service's Web site. In view 
of the uncertain status of, and future for, Related Items, it will not 
be included in the MCS at this time. If the Postal Service wishes to 
offer Related Items, it must make an appropriate filing with the 
Commission.
    3. Shipping and Mailing Supplies
    The Postal Service proposes to add Shipping and Mailing Supplies to 
the Competitive Product List as a stand-alone product. Shipping and 
Mailing Supplies consist of packaging materials that are used to 
package, seal, protect, and label items for mailing, including mailing 
cartons, specialty boxes, mailing tubes, mailing envelopes, a variety 
of packaging tapes, and other shipping accessories. Request, Attachment 
F, at 1. The Postal Service offers these packaging supplies through its 
retail channels. See id. at 1 and 4.
    In Docket No. MC2008-1, the Commission reviewed the Postal 
Service's request to classify ReadyPost-a Postal Service-branded line 
of packaging supplies, as a postal service. Order No. 154 at 27. Based 
upon that review, the Commission found ReadyPost to be a postal 
service. Id. at 34. In this proceeding, however, the Postal Service 
combines ReadyPost with other packaging supplies to form Shipping and 
Mailing Supplies. Request, Attachment F, at 1.
    With its Request in this proceeding, the Postal Service proposes 
MCS language that contains descriptions and prices for Shipping and 
Mailing Supplies. The Postal Service also provides a Statement of 
Justification that includes confidential FY 2008 cost and revenue 
figures that were filed under seal for the proposed product.
    The Public Representative argues that the Request fails to include 
any financial information or spreadsheets to determine whether the new 
product complies with 39 U.S.C. 3633(a), 39 U.S.C. 3642(d)(1), or 39 
CFR 3015.7. Public Representative Comments at 10-11. The Commission 
concludes, upon review, that the financial information concerning 
Shipping and Mailing Supplies, provided under seal in Response to CHIR 
No. 1, Question 1, satisfies the applicable statutory and regulatory 
requirements.
    The Public Representative supports the addition of Shipping and 
Mailing Supplies to the Competitive Product List ``with appropriate 
constraints.'' Id. at 10. In this regard, the Public Representative 
asserts that the Postal Service's proposed MCS language appears to 
permit the sale of Shipping and Mailing Supplies at retail locations 
other than postal retail locations, such as department stores and mass 
merchandisers. Id. The sale of Shipping and Mailing Supplies at other 
retail locations ``does not foster the use of the mails and is not a 
`function ancillary' '' to the delivery of mailable matter. Id. at 10-
11. Accordingly, the Public Representative argues that availability of 
Shipping and Mailing Supplies should be limited to postal retail 
locations and the Postal Service's Web sites. Id. at 11.
    The Postal Service opposes this limitation, but suggests that this 
issue does not need to be decided in this docket. The Postal Service's 
``current plans with regard to the Shipping and Mailing Supplies 
product (as well as, incidentally, the Greeting Cards product), is to 
sell such materials through Postal Service retail channels.'' Postal 
Service Reply Comments at 4.
    The Commission approves the addition of Shipping and Mailing 
Supplies to the Competitive Product List. However, the proposed MCS 
language does not accurately describe what the Postal Service is 
selling as Shipping and Mailing Supplies or in what retail channels. In 
this regard, ``related material'' offered for sale as shipping supplies 
and the sales channels in which Shipping and Mailing Supplies may be 
offered must be clarified. Accordingly, in recognition of the positions 
of both the Public Representative and the Postal Service, the draft MCS 
language will be revised to limit the sale of Shipping and Mailing 
Supplies to postal retail locations and the Postal Service's Web site. 
The draft MCS language will also be revised to change ``related 
material'' to ``related packaging materials used to prepare items for 
entry into the mailstream'' to clarify the limited nature of the 
related materials.
    4. International Money Transfer Services
    In Docket No. MC2008-1, the Postal Service sought to have 
International Money Transfer Service (IMTS) classified as a postal 
service. In this proceeding, the Postal Service proposes to bifurcate 
IMTS into an outbound product (IMTS-Outbound) and an inbound product 
(IMTS-Inbound). Request at 6-10; Attachment A at 12; and Attachment G. 
The IMTS-Outbound product features prices of ``general applicability'' 
for postal money orders and the electronic transfer of money that can 
be cashed or accessed, respectively, in a number of foreign countries. 
The separate IMTS-Inbound product consists of 10 agreements with 
foreign postal administrations that govern Postal Service payment of 
foreign money orders presented to post offices in the United States. 
Request at 6. The Postal Service states that the agreements are 
``functionally equivalent'' having many similar cost and market 
characteristics. Id. at 9. As part of its Request, the Postal Service 
proposes MCS text consisting of descriptive information concerning the 
IMTS-Outbound and IMTS-Inbound products. Request, Attachment A, at 13-
15.
    The Public Representative raises two concerns with respect to the 
addition of IMTS-Outbound and IMTS-Inbound to the Competitive Product 
List. First, the Postal Service failed to provide any financial 
information in support of its Request, thereby precluding any 
determination as to whether IMTS-Outbound and IMTS-Inbound comply with 
various provisions of the PAEA. Public Representative Comments at 7. 
Second, the Public Representative reports the Commission's finding, in 
its FY 2008 Annual Compliance Determination (ACD) that IMTS-Outbound 
and IMTS-Inbound combined

[[Page 11459]]

did not cover its attributable costs.\36\ Id. at 8. The Public 
Representative suggests that until accurate cost and revenue data are 
provided, the Commission should defer action on these products or, 
alternatively, add them as experimental products. Id. at 9. If, 
however, the Commission decides to add IMTS-Outbound and IMTS-Inbound 
to the Competitive Product List, the Public Representative recommends 
that the Commission require a greater commitment from the Postal 
Service to produce reliable cost estimates with sufficient time to 
review any new methodologies. Id.
---------------------------------------------------------------------------

    \36\ In this regard, the Postal Service's FY 2008 Annual 
Compliance Report (ACR) stated that IMTS as a whole did not cover 
its attributable costs. In addition, the Postal Service was unable 
to report the financial results of IMTS-Outbound and IMTS-Inbound 
separately. FY 2008 International Cost and Revenue Analysis (ICRA) 
Report (Non-Public), A Pages (c), at page A-2, n.5.
---------------------------------------------------------------------------

    The Public Representative's concerns are well founded. At the time 
of its Request in this proceeding, the Postal Service stated ``it is 
not possible to say with confidence that either IMTS-Outbound or IMTS-
Inbound is or is not covering its attributable costs.'' Request, 
Attachment G, at 3. Moreover, the Postal Service further acknowledged 
it was without ``sufficiently reliable information upon which [to] draw 
conclusions concerning the corrections that would be required properly 
to address the shortfall in cost coverage.'' Id. at 2. Consequently, 
during FY 2009, the Postal Service proposed to further study the 
``basic information needed to analyze the cost coverage of both IMTS 
products and to report again to the Commission by July 15, 2009--.'' 
Id. at 3. The Postal Service's subsequent report detailed recent 
efforts and difficulties associated with obtaining data to estimate 
IMTS costs and stated that the Postal Service was returning to the 
``task of accumulating enough observations of IMTS transactions to 
determine more reliably the costs attributable to them.''\37\ However, 
the July 15, 2009 report does not indicate when the Postal Service 
intends to complete its ``further study.''
    The Postal Service's request to add IMTS-Outbound and IMTS-Inbound 
as separate products to the Competitive Product List is approved. 
However, it is imperative that the Postal Service continue its work to 
develop reliable cost estimates for both products.\38\
---------------------------------------------------------------------------

    \37\ Supplemental Response of the United States Postal Service 
to Order No. 154, July 15, 2009, Attachment A, Statement of 
Supporting Justification, at 6.
    \38\ In Docket No. RM2010-4, filed during the pendency of the 
instant proceeding, the Postal Service proposed to change the volume 
variability of window service costs for IMTS. This change only 
applies to the combined inbound and outbound services and does not 
address the development of separate costs for the IMTS-Inbound and 
IMTS-Outbound products requested by the Postal Service in this 
proceeding.
---------------------------------------------------------------------------

D. Miscellaneous Issues
    UPS states that the Commission should consider the impact of adding 
products to the Competitive Product List on the overall contribution of 
competitive products to the Postal Service's institutional costs. UPS 
Comments at 2. UPS does not oppose the addition of any product to the 
Competitive Product List, but urges the impact of adding new 
competitive products to the list be evaluated, particularly as regards 
their contribution to institutional costs.
    The Commission agrees with UPS that the cumulative impact of adding 
products to the Competitive Product List must be evaluated. The next 
opportunity for that evaluation will be in the 2010 ACD proceedings.
    In conclusion, the Commission approves the Postal Service's Request 
to add products to the Market Dominant Product List and Competitive 
Product List as discussed in this order.\39\ The revisions to the 
Market Dominant and Competitive Product Lists are shown below the 
signature on this order and are effective upon issuance of the order.
---------------------------------------------------------------------------

    \39\ Bracketed text in previous Product Lists, which has been 
used to reserve entries for class, product and group descriptions, 
is being eliminated to improve readability, foster consistency of 
presentation, conform the Lists more closely to long-term 
expectations about format, and to reduce costs associated with 
publication.
---------------------------------------------------------------------------

IV. Ordering Paragraphs

    It is ordered:
    1. The Postal Service's request to add postal products to the 
Market Dominant Product List and Competitive Product List is approved 
as set forth in the body of this order.
    2. Address Management Services and Customized Postage are added to 
the Market Dominant Product List as products under Special Services. 
Address List Services is replaced by Address Management Services.
    3. Address Management Services shall contain the following 
elements: Address Sequencing; Advance Notification and Tracking System; 
AEC II (Address Element Correction II) Service; AIS (Address 
Information Service) Viewer; Barcode Certification; CRIS (Carrier Route 
Information Service); CASS (Coding Accuracy Support System) 
Certification; Change-of-Address Information for Election Boards and 
Registration Commissions; City State; CDS (Computerized Delivery 
Sequence); Correction of Address Lists; Delivery Statistics; Delivery 
Type; DMM (Domestic Mail Manual) Labeling Lists; DPV (Domestic Point 
Validation) System; DSF2 (Delivery Sequence File-2\nd\ Generation) 
Service; eLOT (enhanced Line of Travel) Service; FASTforward MLOCR 
(Multi-line Optical Character Reader); Five-Digit ZIP; LACS\Link\ 
(Locatable Address Conversion Service); Mailpiece Quality Control 
Certification; MAC (Manifest Analysis and Certification) Batch System 
Certification; MAC Gold System Certification; MAC System Certification; 
MASS (Multiline Accuracy Support System) Certification; NCOA\LINK\ 
(National Change of Address) Service; NCOA\LINK\ (National Change of 
Address) Service-ANK\Link\ (Addressee Not Known) Service Option; 
Official National Zone Charts; PAGE (Presort Accuracy, Grading, and 
Evaluation) System Certification; PAVE (Presort Accuracy, Validation, 
and Evaluation) System Certification; RDI (Residential Delivery 
Indicator) Service; Z4CHANGE; Z4INFO; ZIP+4 Service; ZIPMove; and ZIP 
Code Sortation of Address Lists.
    4. The Postal Service shall within 30 days of the date of this 
order file appropriate draft product descriptions for the following: 
Address Management Services: Advance Notification and Tracking System; 
Mailpiece Quality Control Certification; MAC\TM\ Batch System 
Certification; MAC\TM\ Gold System Certification; MAC\TM\ System 
Certification; PAGE System Certification; PAVE\TM\ System 
Certification; and Z4INFO.
    5. The Postal Service shall file an appropriate request to add 
Stamp Fulfillment Services to the Mail Classification Schedule Market 
Dominant Product List within 60 days of the date of this order, as 
discussed in the body of this order.
    6. Address Enhancement Service is added to the Competitive Product 
List. Address Enhancement Service shall contain the following elements: 
AEC (Address Element Correction); AMS API (Address Matching System 
Application Program Interface); TIGER/ZIP + 4 (topological Integrated 
Geographic Encoding and Referencing).
    7. Greeting Cards and Stationery and Shipping and Mailing Supplies 
are added to the Competitive Product List.
    8. International Money Transfer Service is replaced by 
International Money Transfer Service-Outbound and International Money 
Transfer Service-Inbound as products on the Competitive Product List.
    9. The Secretary shall arrange for publication of this order in the 
Federal Register.

[[Page 11460]]

List of Subjects in 39 CFR Part 3020

    Administrative practice and procedure; Postal Service.

    By the Commission.
Shoshana M. Grove,
Secretary.

0
For the reasons discussed in the preamble, the Postal Regulatory 
Commission amends chapter III of title 39 of the Code of Federal 
Regulations as follows:

PART 3020--PRODUCT LISTS

0
1. The authority citation for part 3020 continues to read as follows:

    Authority: Authority: 39 U.S.C. 503; 3622; 3631; 3642; 3682.

0
2. Revise Appendix A to Subpart A of Part 3020-Mail Classification 
Schedule to read as follows:

Appendix A to Subpart A of Part 3020--Mail Classification Schedule

 
 
 
Part A--Market Dominant Products
1000 Market Dominant Product List
First-Class Mail
    Single-Piece Letters/Postcards
    Bulk Letters/Postcards
    Flats
    Parcels
    Outbound Single-Piece First-Class Mail International
    Inbound Single-Piece First-Class Mail International
Standard Mail (Regular and Nonprofit)
    High Density and Saturation Letters
    High Density and Saturation Flats/Parcels
    Carrier Route
    Letters
    Flats
    Not Flat-Machinables (NFMs)/Parcels
Periodicals
    Within County Periodicals
    Outside County Periodicals
Package Services
    Single-Piece Parcel Post
    Inbound Surface Parcel Post (at UPU rates)
    Bound Printed Matter Flats
    Bound Printed Matter Parcels
    Media Mail/Library Mail
Special Services
    Ancillary Services
    International Ancillary Services
    Address Management Services
    Caller Service
    Change-of-Address Credit Card Authentication
    Confirm
    Customized Postage
    International Reply Coupon Service
    International Business Reply Mail Service
    Money Orders
    Post Office Box Service
Negotiated Service Agreements
    HSBC North America Holdings Inc. Negotiated Service Agreement
    Bookspan Negotiated Service Agreement
    Bank of America Corporation Negotiated Service Agreement
    The Bradford Group Negotiated Service Agreement
    Inbound International
        Canada Post--United States Postal Service Contractual Bilateral
         Agreement for Inbound Market Dominant Services (MC2010-12 and
         R2010-2)
Market Dominant Product Descriptions
First-Class Mail
    Single-Piece Letters/Postcards
    Bulk Letters/Postcards
    Flats
    Parcels
    Outbound Single-Piece First-Class Mail International
    Inbound Single-Piece First-Class Mail International
Standard Mail (Regular and Nonprofit)
    High Density and Saturation Letters
    High Density and Saturation Flats/Parcels
    Carrier Route
    Letters
    Flats
    Not Flat-Machinables (NFMs)/Parcels
Periodicals
    Within County Periodicals
    Outside County Periodicals
Package Services
    Single-Piece Parcel Post
    Inbound Surface Parcel Post (at UPU rates)
    Bound Printed Matter Flats
    Bound Printed Matter Parcels
    Media Mail/Library Mail
Special Services
    Ancillary Services
    Address Correction Service
    Applications and Mailing Permits
    Business Reply Mail
    Bulk Parcel Return Service
    Certified Mail
    Certificate of Mailing
    Collect on Delivery
    Delivery Confirmation
    Insurance
    Merchandise Return Service
    Parcel Airlift (PAL)
    Registered Mail
    Return Receipt
    Return Receipt for Merchandise
    Restricted Delivery
    Shipper-Paid Forward
    Signature Confirmation
    Special Handling
    Stamped Envelopes
    Stamped Cards
    Premium Stamped Stationery
    Premium Stamped Cards
    International Ancillary Services
    International Certificate of Mailing
    International Registered Mail
    International Return Receipt
    International Restricted Delivery
    Address List Services
    Caller Service
    Change-of-Address Credit Card Authentication
    Confirm
    International Reply Coupon Service
    International Business Reply Mail Service
    Money Orders
    Post Office Box Service
Negotiated Service Agreements
    HSBC North America Holdings Inc. Negotiated Service Agreement
    Bookspan Negotiated Service Agreement
    Bank of America Corporation Negotiated Service Agreement
    The Bradford Group Negotiated Service Agreement
Part B--Competitive Products
2000 Competitive Product List
Express Mail
    Express Mail
    Outbound International Expedited Services
    Inbound International Expedited Services
        Inbound International Expedited Services 1 (CP2008-7)
        Inbound International Expedited Services 2 (MC2009-10 and CP2009-
         12)
        Inbound International Expedited Services 3 (MC2010-13 and CP2010-
         12)
Priority Mail
    Priority Mail
    Outbound Priority Mail International
    Inbound Air Parcel Post (at non-UPU rates)
        Royal Mail Group Inbound Air Parcel Post Agreement
    Inbound Air Parcel Post (at UPU rates)
Parcel Select
Parcel Return Service
International
    International Priority Airlift (IPA)
    International Surface Airlift (ISAL)
    International Direct Sacks--M--Bags
    Global Customized Shipping Services
    Inbound Surface Parcel Post (at non-UPU rates)
        Canada Post--United States Postal Service Contractual Bilateral
         Agreement for Inbound Competitive Services (MC2010-14 and
         CP2010-13--Inbound Surface Parcel post at Non-UPU Rates and
         Xpresspost-USA)
    International Money Transfer Service--Outbound
    International Money Transfer Service--Inbound
    International Ancillary Services
Special Services
    Address Enhancement Service
    Greeting Cards and Stationery
    Premium Forwarding Service
    Shipping and Mailing Services
Negotiated Service Agreements
    Domestic
        Express Mail Contract 1 (MC2008-5)
        Express Mail Contract 2 (MC2009-3 and CP2009-4)
        Express Mail Contract 3 (MC2009-15 and CP2009-21)
        Express Mail Contract 4 (MC2009-34 and CP2009-45)
        Express Mail Contract 5 (MC2010-5 and CP2010-5)
        Express Mail Contract 6 (MC2010--6 and CP2010-6)
        Express Mail Contract 7 (MC2010--7 and CP2010-7)

[[Page 11461]]

 
        Express Mail Contract 8 (MC2010--16 and CP2010-16)
        Express Mail & Priority Mail Contract 1 (MC2009-6 and CP2009-7)
        Express Mail & Priority Mail Contract 2 (MC2009-12 and CP2009-
         14)
        Express Mail & Priority Mail Contract 3 (MC2009-13 and CP2009-
         17)
        Express Mail & Priority Mail Contract 4 (MC2009-17 and CP2009-
         24)
        Express Mail & Priority Mail Contract 5 (MC2009-18 and CP2009-
         25)
        Express Mail & Priority Mail Contract 6 (MC2009-31 and CP2009-
         42)
        Express Mail & Priority Mail Contract 7 (MC2009-32 and CP2009-
         43)
        Express Mail & Priority Mail Contract 8 (MC2009-33 and CP2009-
         44)
        Parcel Select & Parcel Return Service Contract 1 (MC2009-11 and
         CP2009-13)
        Parcel Select & Parcel Return Service Contract 2 (MC2009-40 and
         CP2009-61)
        Parcel Return Service Contract 1 (MC2009-1 and CP2009-2)
        Priority Mail Contract 1 (MC2008-8 and CP2008-26)
        Priority Mail Contract 2 (MC2009-2 and CP2009-3)
        Priority Mail Contract 3 (MC2009-4 and CP2009-5)
        Priority Mail Contract 4 (MC2009-5 and CP2009-6)
        Priority Mail Contract 5 (MC2009-21 and CP2009-26)
        Priority Mail Contract 6 (MC2009-25 and CP2009-30)
        Priority Mail Contract 7 (MC2009-25 and CP2009-31)
        Priority Mail Contract 8 (MC2009-25 and CP2009-32)
        Priority Mail Contract 9 (MC2009-25 and CP2009-33)
        Priority Mail Contract 10 (MC2009-25 and CP2009-34)
        Priority Mail Contract 11 (MC2009-27 and CP2009-37)
        Priority Mail Contract 12 (MC2009-28 and CP2009-38)
        Priority Mail Contract 13 (MC2009-29 and CP2009-39)
        Priority Mail Contract 14 (MC2009-30 and CP2009-40)
        Priority Mail Contract 15 (MC2009-35 and CP2009-54)
        Priority Mail Contract 16 (MC2009-36 and CP2009-55)
        Priority Mail Contract 17 (MC2009-37 and CP2009-56)
        Priority Mail Contract 18 (MC2009-42 and CP2009-63)
        Priority Mail Contract 19 (MC2010-1 and CP2010-1)
        Priority Mail Contract 20 (MC2010-2 and CP2010-2)
        Priority Mail Contract 21 (MC2010-3 and CP2010-3)
        Priority Mail Contract 22 (MC2010-4 and CP2010-4)
        Priority Mail Contract 23 (MC2010-9 and CP2010-9)
        Priority Mail Contract 24 (MC2010-15 and CP2010-15)
    Outbound International
        Direct Entry Parcels Contracts
            Direct Entry Parcels 1 (MC2009-26 and CP2009-36)
        Global Direct Contracts (MC2009-9, CP2009-10, and CP2009-11)
        Global Direct Contracts 1 (MC2010-17 and CP2010-18)
        Global Expedited Package Services (GEPS) Contracts
            GEPS 1 (CP2008-5, CP2008-11, CP2008-12, CP2008-13, CP2008-
             18, CP2008-19, CP2008-20, CP2008-21, CP2008-22, CP2008-23,
             and CP2008-24)
            Global Expedited Package Services 2 (CP2009-50)
        Global Plus Contracts
            Global Plus 1 (CP2008-8, CP2008-46 and CP2009-47)
            Global Plus 2 (MC2008-7, CP2008-48 and CP2008-49)
    Inbound International
        Inbound Direct Entry Contracts with Foreign Postal
         Administrations
            Inbound Direct Entry Contracts with Foreign Postal
             Administrations (MC2008-6, CP2008-14 and MC2008-15)
            Inbound Direct Entry Contracts with Foreign Postal
             Administrations 1 (MC2008-6 and CP2009-62)
        International Business Reply Service Competitive Contract 1
         (MC2009-14 and CP2009-20)
    Competitive Product Descriptions
        Express Mail
        Express Mail
        Outbound International Expedited Services
        Inbound International Expedited Services
        Priority
        Priority Mail
        Outbound Priority Mail International
        Inbound Air Parcel Post
        Parcel Select
        Parcel Return Service
        International
        International Priority Airlift (IPA)
        International Surface Airlift (ISAL)
        International Direct Sacks--M-Bags
        Global Customized Shipping Services
        International Money Transfer Service
        Inbound Surface Parcel Post (at non-UPU rates)
        International Ancillary Services
        International Certificate of Mailing
        International Registered Mail
        International Return Receipt
        International Restricted Delivery
        International Insurance
        Negotiated Service Agreements
        Domestic
        Outbound International
Part C--Glossary of Terms and Conditions [Reserved]
Part D--Country Price Lists for International Mail [Reserved]
 

[FR Doc. 2010-5212 Filed 3-10-10; 8:45 am]
BILLING CODE 7710-FW-S


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