40708 Federal Register / Vol. 74, No. 154 / Wednesday, August 12, 2009 / Rules and Regulations 

1Request of the United States Postal Service to 

Add Express Mail & Priority Mail Contract 8 to 

Competitive Product List and Notice of 

Establishment of Rates and Class Not of General 

Applicability, July 2, 2009. 

2Errata to Request of the United States Postal 

Service to Add Express Mail & Priority Mail 

Contract 8 to Competitive Product List and Notice 

of Establishment of Rates and Class Not of General 

Applicability, July 6, 2009 (Request). 

3See Notice of the United States Postal Service 

of Filing Under Seal of Revised Financial Analysis 

Workbooks for Express Mail & Priority Mail 

Contract 8, July 8, 2009 (Revised Workbooks). 

4Attachment A to the Request. The analysis that 

accompanies the Governors’ Decision notes, among 

other things, that the contract is not risk free, but 

concludes that the risks are manageable. 

5Attachment B to the Request. 

6Attachment C to the Request. 

7Attachment D to the Request. 

8Attachment E to the Request. 

9PRC Order No. 241, Notice and Order 

Concerning Express Mail & Priority Mail Contract 

8 Negotiated Service Agreement, July 7, 2009 (Order 

No. 241). 

10Chairman’s Information Request No. 1 and 

Notice of Filing of Questions under Seal, July 14, 

2009 (CHIR No. 1). 

11See Notice of the United States Postal Service 

of Filing Response to Chairman’s Information 

Request No. 1 Under Seal, July 20, 2009 (Response 

to CHIR No. 1). 

12Public Representative Comments in Response 

to United States Postal Service Request to Add 

Express Mail & Priority Mail Contract 8 to 

Competitive Product List and Notice of 

Establishment of Rates and Class Not of General 

Applicability, July 15, 2009 (Public Representative 

Comments). 

POSTAL REGULATORY COMMISSION 

[Docket Nos. MC2009–33 and CP2009–44; 

Order No. 257] 

39 CFR Part 3020 

Express Mail & Priority Mail Contract 8 

AGENCY: Postal Regulatory Commission. 

ACTION: Final rule. 

SUMMARY: The Commission is adding 

Express Mail & Priority Mail Contract 8 

to the Competitive Product List. This 

action is consistent with changes in a 

recent law governing postal operations. 

Republication of the lists of market 

dominant and competitive products is 

also consistent with new requirements 

under the law. 

DATES: Effective August 12, 2009 and is 

applicable beginning July 27, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Stephen L. Sharfman, General Counsel, 

202–789–6820 or 

stephen.sharfman@prc.gov. 

SUPPLEMENTARY HISTORY: Regulatory 

history, 74 FR 34373, Jul. 15, 2009. 

I. Introduction 

II. Background 

III. Information Request 

IV. Comments 

V. Commission Analysis 

VI. Ordering Paragraphs 

I. Introduction 

The Postal Service seeks to add a new 

product identified as Express Mail & 

Priority Mail Contract 8 to the 

Competitive Product List. For the 

reasons discussed below, the 

Commission approves the Request. 

II. Background 

On July 2, 2009, the Postal Service 

filed a formal request pursuant to 39 

U.S.C. 3642 and 39 CFR 3020.30, et seq., 

to add Express Mail & Priority Mail 

Contract 8 to the Competitive Product 

List.1 On July 6, 2009, the Postal Service 

filed a revised version of its filing which 

includes attachments inadvertently 

omitted from the July 2, 2009 request.2

The Postal Service asserts that the 

Express Mail & Priority Mail Contract 8 

product is a competitive product ‘‘not of 

general applicability’’ within the 

meaning of 39 U.S.C. 3632(b)(3). Id. at 

1. The Request has been assigned 

Docket No. MC2009–33. 

The Postal Service 

contemporaneously filed a contract 

related to the proposed new product 

pursuant to 39 U.S.C. 3632(b)(3) and 39 

CFR 3015.5. Id. The contract has been 

assigned Docket No. CP2009–44. 

On July 8, 2009, the Postal Service 

filed under seal revised versions of the 

financial analysis workbooks originally 

filed under seal on July 2, 2009.3

In support of its Request, the Postal 

Service filed the following materials: (1) 

A redacted version of the Governors’ 

Decision authorizing the new product 

which also includes an analysis of 

Express Mail & Priority Mail Contract 8 

and certification of the Governors’ 

vote; 4 (2) a redacted version of the 

contract which, among other things, 

provides that the contract will expire 3 

years from the effective date, which is 

proposed to be 1 day after the 

Commission issues all regulatory 

approvals; 5 (3) requested changes in the 

Mail classification Schedule product 

list; 6 (4) a Statement of Supporting 

Justification as required by 39 CFR 

3020.32; 7 and (5) certification of 

compliance with 39 U.S.C. 3633(a).8

In the Statement of Supporting 

Justification, Mary Prince Anderson, 

Manager, Sales and Communications, 

Expedited Shipping, asserts that the 

service to be provided under the 

contract will cover its attributable costs, 

make a positive contribution to 

institutional costs, and increase 

contribution toward the requisite 5.5 

percent of the Postal Service’s total 

institutional costs. Id., Attachment D. 

Thus, Ms. Anderson contends there will 

be no issue of subsidization of 

competitive products by market 

dominant products as a result of this 

contract. Id. W. Ashley Lyons, Manager, 

Regulatory Reporting and Cost Analysis, 

Finance Department, certifies that the 

contract complies with 39 U.S.C. 

3633(a). See id., Attachment E. 

The Postal Service filed much of the 

supporting materials, including the 

unredacted Governors’ Decision and the 

unredacted contract, under seal. In its 

Request, the Postal Service maintains 

that the contract and related financial 

information, including the customer’s 

name and the accompanying analyses 

that provide prices, terms, conditions, 

and financial projections, should remain 

confidential. Id. at 2–3. 

In Order No. 241, the Commission 

gave notice of the two dockets, 

appointed a public representative, and 

provided the public with an opportunity 

to comment.9

III. Information Request 

On July 14, 2009, the Chairman issued 

an information request seeking 

responses to six questions.10 The 

information request was filed under 

seal. Id. On July 20, 2009, the Postal 

Service filed its responses to CHIR No. 

1.11

IV. Comments 

Comments were filed by the Public 

Representative.12 No filings were 

submitted by other interested parties. 

The Public Representative states that the 

Postal Service’s filing complies with 

applicable Commission rules of practice 

and concludes that the Express Mail & 

Priority Mail Contract 8 agreements 

comports with the requirements of title 

39. Id. at 3. He further states that the 

agreement appears beneficial to the 

general public. Id. at 1. 

The Public Representative notes that 

the Postal Service has provided 

adequate justification for maintaining 

confidentiality in this case. Id. at 2–3. 

He also points out several contractual 

provisions that he believes are mutually 

beneficial to the parties and general 

public. Id. at 3. 

V. Commission Analysis 

The Commission has reviewed the 

Request, the contract, the financial 

analysis provided under seal, the 

Revised Workbooks, the Response to 

CHIR No. 1, and the comments filed by 

the Public Representative. 

Statutory requirements. The 

Commission’s statutory responsibilities 

in this instance entail assigning Express 

Mail & Priority Mail Contract 8 to either 


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Federal Register / Vol. 74, No. 154 / Wednesday, August 12, 2009 / Rules and Regulations 40709 

the Market Dominant Product List or to 

the Competitive Product List. 39 U.S.C. 

3642. As part of this responsibility, the 

Commission also reviews the proposal 

for compliance with the Postal 

Accountability and Enhancement Act 

(PAEA) requirements. This includes, for 

proposed competitive products, a 

review of the provisions applicable to 

rates for competitive products. 39 U.S.C. 

3633. 

Product list assignment. In 

determining whether to assign Express 

Mail & Priority Mail Contract 8 as a 

product to the Market Dominant 

Product List or the Competitive Product 

List, the Commission must consider 

whether 

the Postal Service exercises sufficient market 

power that it can effectively set the price of 

such product substantially above costs, raise 

prices significantly, decrease quality, or 

decrease output, without risk of losing a 

significant level of business to other firms 

offering similar products. 

39 U.S.C. 3642(b)(1). If so, the product 

will be categorized as market dominant. 

The competitive category of products 

shall consist of all other products. 

The Commission is further required to 

consider the availability and nature of 

enterprises in the private sector engaged 

in the delivery of the product, the views 

of those who use the product and the 

likely impact on small business 

concerns. 39 U.S.C. 3642(b)(3). 

The Postal Service asserts that its 

bargaining position is constrained by 

the existence of other shippers who can 

provide similar services, thus 

precluding it from taking unilateral 

action to increase prices without the 

risk of losing volume to private 

companies. Request, Attachment D, at 

¶ (d). The Postal Service also contends 

that it may not decrease quality or 

output without risking the loss of 

business to competitors that offer 

similar expedited delivery services. Id. 

It further states that the contract partner 

supports the addition of the contract to 

the Competitive Product List to 

effectuate the negotiated contractual 

terms. Id. at ¶ (g). Finally, the Postal 

Service states that the market for 

expedited delivery services is highly 

competitive and requires a substantial 

infrastructure to support a national 

network. It indicates that large carriers 

serve this market. Accordingly, the 

Postal Service states that it is unaware 

of any small business concerns that 

could offer comparable service for this 

customer. Id. at ¶ (h). 

No commenter opposes the proposed 

classification of Express Mail & Priority 

Mail Contract 8 as competitive. Having 

considered the statutory requirements 

and the support offered by the Postal 

Service, the Commission finds that 

Express Mail & Priority Mail Contract 8 

is appropriately classified as a 

competitive product and should be 

added to the Competitive Product List. 

Cost considerations. The Postal 

Service presents a financial analysis 

showing that Express Mail & Priority 

Mail Contract 8 results in cost savings 

while ensuring that the contract covers 

its attributable costs, does not result in 

subsidization of competitive products 

by market dominant products, and 

increases contribution from competitive 

products. 

Based on the data submitted, the 

Commission finds that Express Mail & 

Priority Mail Contract 8 should cover its 

attributable costs (39 U.S.C. 3633(a)(2)), 

should not lead to the subsidization of 

competitive products by market 

dominant products (39 U.S.C. 

3633(a)(1)), and should have a positive 

effect on competitive products’ 

contribution to institutional costs (39 

U.S.C. 3633(a)(3)). Thus, an initial 

review of proposed Express Mail & 

Priority Mail Contract 8 indicates that it 

comports with the provisions applicable 

to rates for competitive products. 

Other considerations. The Postal 

Service shall promptly notify the 

Commission of the scheduled 

termination date of the agreement. If the 

agreement terminates earlier than 

anticipated, the Postal Service shall 

inform the Commission prior to the new 

termination date. The Commission will 

then remove the product from the Mail 

Classification Schedule at the earliest 

possible opportunity. 

In conclusion, the Commission 

approves Express Mail & Priority Mail 

Contract 8 as a new product. The 

revision to the Competitive Product List 

is shown below the signature of this 

Order and is effective upon issuance of 

this Order. 

VI. Ordering Paragraphs 

It is ordered: 

1. Express Mail & Priority Mail 

Contract 8 (MC2009–33 and CP2009–44) 

is added to the Competitive Product List 

as a new product under Negotiated 

Service Agreements, Domestic. 

2. The Postal Service shall notify the 

Commission of the scheduled 

termination date and update the 

Commission if termination occurs prior 

to that date, as discussed in this Order. 

3. The Secretary shall arrange for the 

publication of this Order in the Federal 

Register. 

Issued: July 27, 2009. 

By the Commission. 

Ann C. Fisher, 

Acting Secretary. 

List of Subjects in 39 CFR Part 3020 

Administrative practice and 

procedure, Postal Service. 

■ For the reasons stated in the preamble, 

under the authority at 39 U.S.C. 503, the 

Postal Regulatory Commission amends 

39 CFR part 3020 as follows: 

PART 3020—PRODUCT LISTS 

■ 1. The authority citation for part 3020 

continues to read as follows: 

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

3642, 3682. 

■ 2. Revise Appendix A to Subpart A of 

Part 3020—Mail Classification Schedule 

to read as follows: 

Appendix 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 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 

Inbound International 


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40710 Federal Register / Vol. 74, No. 154 / Wednesday, August 12, 2009 / Rules and Regulations 

Canada Post—United States Postal Service 

Contractual Bilateral Agreement for 

Inbound Market Dominant Services 

Market Dominant Product Descriptions 

First-Class Mail 

[Reserved for Class Description] 

Single-Piece Letters/Postcards 

[Reserved for Product Description] 

Bulk Letters/Postcards 

[Reserved for Product Description] 

Flats 

[Reserved for Product Description] 

Parcels 

[Reserved for Product Description] 

Outbound Single-Piece First-Class Mail 

International 

[Reserved for Product Description] 

Inbound Single-Piece First-Class Mail 

International 

[Reserved for Product Description] 

Standard Mail (Regular and Nonprofit) 

[Reserved for Class Description] 

High Density and Saturation Letters 

[Reserved for Product Description] 

High Density and Saturation Flats/Parcels 

[Reserved for Product Description] 

Carrier Route 

[Reserved for Product Description] 

Letters 

[Reserved for Product Description] 

Flats 

[Reserved for Product Description] 

Not Flat-Machinables (NFMs)/Parcels 

[Reserved for Product Description] 

Periodicals 

[Reserved for Class Description] 

Within County Periodicals 

[Reserved for Product Description] 

Outside County Periodicals 

[Reserved for Product Description] 

Package Services 

[Reserved for Class Description] 

Single-Piece Parcel Post 

[Reserved for Product Description] 

Inbound Surface Parcel Post (at UPU rates) 

[Reserved for Product Description] 

Bound Printed Matter Flats 

[Reserved for Product Description] 

Bound Printed Matter Parcels 

[Reserved for Product Description] 

Media Mail/Library Mail 

[Reserved for Product Description] 

Special Services 

[Reserved for Class Description] 

Ancillary Services 

[Reserved for Product Description] 

Address Correction Service 

[Reserved for Product Description] 

Applications and Mailing Permits 

[Reserved for Product Description] 

Business Reply Mail 

[Reserved for Product Description] 

Bulk Parcel Return Service 

[Reserved for Product Description] 

Certified Mail 

[Reserved for Product Description] 

Certificate of Mailing 

[Reserved for Product Description] 

Collect on Delivery 

[Reserved for Product Description] 

Delivery Confirmation 

[Reserved for Product Description] 

Insurance 

[Reserved for Product Description] 

Merchandise Return Service 

[Reserved for Product Description] 

Parcel Airlift (PAL) 

[Reserved for Product Description] 

Registered Mail 

[Reserved for Product Description] 

Return Receipt 

[Reserved for Product Description] 

Return Receipt for Merchandise 

[Reserved for Product Description] 

Restricted Delivery 

[Reserved for Product Description] 

Shipper-Paid Forwarding 

[Reserved for Product Description] 

Signature Confirmation 

[Reserved for Product Description] 

Special Handling 

[Reserved for Product Description] 

Stamped Envelopes 

[Reserved for Product Description] 

Stamped Cards 

[Reserved for Product Description] 

Premium Stamped Stationery 

[Reserved for Product Description] 

Premium Stamped Cards 

[Reserved for Product Description] 

International Ancillary Services 

[Reserved for Product Description] 

International Certificate of Mailing 

[Reserved for Product Description] 

International Registered Mail 

[Reserved for Product Description] 

International Return Receipt 

[Reserved for Product Description] 

International Restricted Delivery 

[Reserved for Product Description] 

Address List Services 

[Reserved for Product Description] 

Caller Service 

[Reserved for Product Description] 

Change-of-Address Credit Card 

Authentication 

[Reserved for Product Description] 

Confirm 

[Reserved for Product Description] 

International Reply Coupon Service 

[Reserved for Product Description] 

International Business Reply Mail Service 

[Reserved for Product Description] 

Money Orders 

[Reserved for Product Description] 

Post Office Box Service 

[Reserved for Product Description] 

Negotiated Service Agreements 

[Reserved for Class Description] 

HSBC North America Holdings Inc. 

Negotiated Service Agreement 

[Reserved for Product Description] 

Bookspan Negotiated Service Agreement 

[Reserved for Product Description] 

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) 

Priority Mail 

Priority Mail 

Outbound Priority Mail International 

Inbound Air Parcel Post 

Royal Mail Group Inbound Air Parcel Post 

Agreement 

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 (MC2009– 

8 and CP2009–9) 

International Money Transfer Service 

International Ancillary Services 

Special Services 

Premium Forwarding Service 

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 & 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 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) 

Outbound International 

Global Direct Contracts (MC2009–9, 

CP2009–10, and CP2009–11) 

Global Expedited Package Services (GEPS) 

Contracts 


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GEPS 1 (CP2008–5, CP2008–11, CP2008– 

12, and CP2008–13, CP2008–18, 

CP2008–19, CP2008–20, CP2008–21, 

CP2008–22, CP2008–23, and CP2008–24) 

Global Plus Contracts 

Global Plus 1 (CP2008–9 and CP2008–10) 

Global Plus 2 (MC2008–7, CP2008–16 and 

CP2008–17) 

Inbound International 

Inbound Direct Entry Contracts with 

Foreign Postal Administrations 

(MC2008–6, CP2008–14 and CP2008–15) 

International Business Reply Service 

Competitive Contract 1 (MC2009–14 and 

CP2009–20) 

Competitive Product Descriptions 

Express Mail 

[Reserved for Group Description] 

Express Mail 

[Reserved for Product Description] 

Outbound International Expedited Services 

[Reserved for Product Description] 

Inbound International Expedited Services 

[Reserved for Product Description] 

Priority 

[Reserved for Product Description] 

Priority Mail 

[Reserved for Product Description] 

Outbound Priority Mail International 

[Reserved for Product Description] 

Inbound Air Parcel Post 

[Reserved for Product Description] 

Parcel Select 

[Reserved for Group Description] 

Parcel Return Service 

[Reserved for Group Description] 

International 

[Reserved for Group Description] 

International Priority Airlift (IPA) 

[Reserved for Product Description] 

International Surface Airlift (ISAL) 

[Reserved for Product Description] 

International Direct Sacks—M-Bags 

[Reserved for Product Description] 

Global Customized Shipping Services 

[Reserved for Product Description] 

International Money Transfer Service 

[Reserved for Product Description] 

Inbound Surface Parcel Post (at non-UPU 

rates) 

[Reserved for Product Description] 

International Ancillary Services 

[Reserved for Product Description] 

International Certificate of Mailing 

[Reserved for Product Description] 

International Registered Mail 

[Reserved for Product Description] 

International Return Receipt 

[Reserved for Product Description] 

International Restricted Delivery 

[Reserved for Product Description] 

International Insurance 

[Reserved for Product Description] 

Negotiated Service Agreements 

[Reserved for Group Description] 

Domestic 

[Reserved for Product Description] 

Outbound International 

[Reserved for Group Description] 

Part C—Glossary of Terms and Conditions 

[Reserved] 

Part D—Country Price Lists for International 

Mail [Reserved] 

[FR Doc. E9–19256 Filed 8–11–09; 8:45 am] 

BILLING CODE 7710–FW–P 


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