Federal Register / Vol. 83, No. 138 / Wednesday, July 18, 2018 / Notices 33965 

1As defined in section 1130 of the Mail 

Classification Schedule (MCS). 

2The full list of UPU member countries is 

available at http://www.upu.int/en/the-upu/ 

member-countries.html. 

3EMS mail is an express service for documents 

and merchandise, which member countries have 

the option of providing. MCS Section 2515.6.1. 

EMS prices are set through bilateral or multilateral 

negotiations. Id. Sections 2515.6.4., 2515.6.6. 

4UPU Convention, Article 17. UPU Letter Post 

mail also consists of literature for the blind 

weighing up to 7 kilograms and M-bags weighing 

up to 30 kilograms. Id. M-bags are special bags 

containing newspapers, periodicals, books, and 

similar matter mailed to a single address. Id. 

5See International Mailing Services: Proposed 

Product and Price Change—CPI, 82 FR 49160, 

49161 (October 24, 2017); Docket No. R2018–1, 

Notice of Market Dominant Price Adjustment, 

October 6, 2017, at 10. 

6Public Law 109–435, 120 Stat. 3198 (2006). 

7 39 U.S.C. 3621, 3631, 3642. The PAEA 

exempted experimental products from the 

requirement that they be classified as market 

dominant or competitive products. 39 U.S.C. 

3641(a)(2). 

8 39 U.S.C. 3642(b)(1). Examples of market 

dominant products include products in the FirstClass Mail, USPS Marketing Mail, and Periodicals 

classes. 

9 Id. Examples of competitive products include 

Priority Mail, Priority Mail Express, and First-Class 

Package Service. 

10 39 U.S.C. 3642. The implementing regulations 

for this section appear in 39 CFR part 3020. 

POSTAL REGULATORY COMMISSION 

[Docket Nos. PI2018–1; Order No. 4708] 

Classification of the Inbound Letter 

Post Product 

AGENCY: Postal Regulatory Commission. 

ACTION: Notice. 

SUMMARY: The Commission is 

establishing a public inquiry regarding 

Postal Service’s claim that the Inbound 

Letter Post product is subject to 

competition. This notice informs the 

public of this proceeding, invites public 

comment, and takes other 

administrative steps. 

ADDRESSES: Submit comments 

electronically via the Commission’s 

Filing Online system at http://

www.prc.gov. Those who cannot submit 

comments electronically should contact 

the person identified in the FOR FURTHER

INFORMATION CONTACT section by 

telephone for advice on filing 

alternatives. 

FOR FURTHER INFORMATION CONTACT: 

David A. Trissell, General Counsel, at 

202–789–6820. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

II. Background 

III. Claims of Competition and Commission 

Action 

IV. Ordering Paragraphs 

I. Introduction 

In recent proceedings, the Postal 

Service claimed that the Inbound Letter 

Post product 1 is subject to competition. 

The Commission establishes this docket 

to examine these and related claims. 

II. Background 

A. The Universal Postal Union 

The Universal Postal Union (UPU) is 

a United Nations specialized agency 

comprising 192 member countries, 

including the United States.2 Member 

countries negotiate international 

agreements governing the exchange of 

international mail, including applicable 

rates for the delivery of international 

mail. The UPU identifies three types of 

international mail: Letter Post, Parcel 

Post, and Express Mail Service (EMS).3

UPU Letter Post mailpieces consist of 

letters, postcards, printed papers, and 

small packets weighing up to 2 

kilograms.4 The UPU divides UPU 

Letter Post mail into three shapes: 

Letters and cards (format P); large letters 

or ‘‘flats’’ (format G); and bulky letters 

and small packets (format E). In January 

2018, the Universal Postal Convention 

(UPU Convention) began differentiating 

UPU Letter Post mail by content in 

addition to shape.5 The UPU 

Convention limits the contents of cards, 

letters, flats, and bulky letters to 

documents. UPU Convention, Article 

17.2. Small packets are UPU Letter Post 

mailpieces containing goods. Id. Article 

17.3. 

B. Statutory Framework 

In 2006, the Postal Accountability and 

Enhancement Act (PAEA) 6 was enacted. 

The PAEA separated postal products 

into two distinct classifications: Market 

dominant and competitive.7 Pursuant to 

39 U.S.C. 3642(b), market dominant 

products are those products over which 

‘‘the Postal Service exercises sufficient 

market power that it can effectively set 

the price of such product[s] 

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.’’ 8

Competitive products ‘‘consist of all 

other products.’’ 9

Section 3642 of title 39 governs the 

addition of products to, removal of 

products from, or transfer of products 

(or components of a product) between 

the market dominant and competitive 

product lists.10 The Commission may 

consider a change to a product’s market 

dominant or competitive classification 

upon request of the Postal Service, users 

of the mail, or upon its own initiative. 

39 U.S.C. 3642(a). The criteria for 

assigning a product to either the market 

dominant or competitive product list is 

described in 39 U.S.C. 3642(b). When 

transferring products between product 

lists, there is nothing to prevent transfer 

of only part of a product. 39 U.S.C. 

3642(c). 

The criteria for assigning a product to 

either the market dominant or 

competitive product list are based on a 

measure of the Postal Service’s market 

power; whether or not the product is 

covered by the postal monopoly; and 

the concerns of the private sector, users 

of the product, and small businesses. 39 

U.S.C. 3642(b). 

The market power criteria are 

specified in 39 U.S.C. 3642(b)(1) as 

follows: 

[The text of 39 U.S.C. 3642(b)(1) was 

removed to comply with the Federal 

Register Document Drafting Handbook, 

section 2.6. See 39 U.S.C. 3642(b)(1).]. 

The postal monopoly criteria are 

specified in 39 U.S.C. 3642(b)(2) as 

follows: 

[The text of 39 U.S.C. 3642(b)(2) was 

removed to comply with the Federal 

Register Document Drafting Handbook, 

section 2.6. See 39 U.S.C. 3642(b)(2).]. 

The private sector, users of the 

product, and small businesses criteria 

are specified in 39 U.S.C. 3642(b)(3) as 

follows: 

[The text of 39 U.S.C. 3642(b)(3) was 

removed to comply with the Federal 

Register Document Drafting Handbook, 

section 2.6. See 39 U.S.C. 3642(b)(3).]. 

When including products on the 

competitive product list, the product 

must also meet the financial 

requirements of 39 U.S.C. 3633(a), 

which: 

[The text of 39 U.S.C. 3633(a) was 

removed to comply with the Federal 

Register Document Drafting Handbook, 

section 2.6. See 39 U.S.C. 3633(a).]. 

C. Classification of Inbound Letter Post 

Sections 3621 and 3631 of title 39 

listed the products preliminarily 

classified as market dominant and 

competitive, respectively. The PAEA 

preliminarily classified single-piece 

international mail as market dominant 

and bulk international mail as 

competitive. 39 U.S.C. 3621(a)(10) and 

3631(a)(4). When the Commission 

requested comments related to the 

classification of inbound international 

mail in its initial rulemaking pursuant 

to the requirements of PAEA, the Postal 

Service argued that the Commission 

should not classify inbound 


amozie on DSK3GDR082PROD with NOTICES1
33966 Federal Register / Vol. 83, No. 138 / Wednesday, July 18, 2018 / Notices 

11 Docket No. RM2007–1, Initial Comments of the 

United States Postal Service in Response to Order 

No. 26, September 24, 2007, at 13–22. 

12 Docket No. RM2007–1, Order Establishing 

Ratemaking Regulations for Market Dominant and 

Competitive Products, October 29, 2007, at 78 

(Order No. 43). 

13See Docket No. ACR2017, United States Postal 

Service Motion for Reconsideration of Order No. 

4451, April 6, 2018, at 4 (Motion for 

Reconsideration) (‘‘Inbound Letter Post is subject to 

substantial competition.’’); id. at 8–9 (cited filings 

in other Commission proceedings that allege the 

private sector competes in the Inbound Letter Post 

market); id.at 10 (‘‘the vast majority of Inbound 

Letter Post mail faces substantial competition’’); id. 

at 12–13 (‘‘existing market research regarding 

inbound package volume, which is included in 

Nonpublic Attachment 1, illustrates the intense 

competition for Inbound Letter Post faced by the 

Postal Service and foreign postal operators.’’ 

(footnote omitted)); Docket No. ACR2017, Response 

of the United States Postal Service to Order No. 

4409, February 23, 2018, at 5 (small packets 

‘‘already face considerable competition today.’’ 

(footnote omitted)); id. at 6 (‘‘the Postal Service 

operates in a competitive market for inbound 

international shipping, which includes inbound 

small packets containing merchandise.’’ (footnote 

omitted)); id. at 6 n.13 (‘‘Not only are Inbound 

Letter Post packets subject to considerable 

competition, but bulk international letter and flat 

mail can be subject to competition as well.’’); 

Docket No. ACR2017, United States Postal Service 

Notice of Filing Nonpublic Folder USPS–FY17– 

NP40 and Application for Nonpublic Treatment, 

February 14, 2018, Attachment at 2 (CHIR No. 15 

Application for Non-Public Treatment) (‘‘Not only 

are Inbound Letter Post packets (E Format) subject 

to considerable competition, but bulk international 

letter and flat mail (P and G Format) can be subject 

to competition as well.’’); id. at 3 (‘‘The Postal 

Service is just one of the participants operating in 

the competitive market for inbound international 

shipping, which includes inbound small packets 

containing merchandise.’’); Docket No. R2018–1, 

United States Postal Service Answer in Opposition 

to U.S. Chamber of Commerce Motion to Unseal 

Library Reference and Motion to Request Issuance 

of Information Request, October 23, 2017, at 4 

(‘‘ ‘inbound letter post . . . face[s] significant 

competition from private sector competitors and 

Extraterritorial Offices of Exchange[.]’ The 

competitive nature of the international market, 

particularly with respect to . . . inbound letter post 

packets weighing 4.4 pounds or less, is well 

established.’’ (footnote omitted)). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

international mail as market dominant 

or competitive.11

The Commission found the Postal 

Service’s arguments for exceptional 

treatment of inbound international mail 

as neither market dominant nor 

competitive unpersuasive and 

inconsistent with section 3642.12 The 

Commission concluded, ‘‘[h]ad 

Congress intended to exempt inbound 

international mail from the requirement 

that all products be categorized as either 

market dominant or competitive, it 

would have done so explicitly, as it did 

by specifically exempting experimental 

products from the requirements of 

section 3642.’’ Order No. 43 at 78 

(footnote omitted). The Commission 

found that the PAEA unambiguously 

requires the Commission to classify 

inbound international mail products as 

either market dominant or competitive. 

Id. Consistent with section 3621, the 

Commission classified Inbound Letter 

Post as a market dominant product. Id. 

at 85. 

III. Claims of Competition and 

Commission Action 

In Docket Nos. R2018–1 and Docket 

ACR2017, the Postal Service repeatedly 

claimed that Inbound Letter Post is 

subject to ‘‘considerable,’’ ‘‘substantial,’’ 

and ‘‘intense’’ competition, especially 

Inbound Letter Post small packets.13

However, the Postal Service filed 

documents in support of its claims of 

competition for the first time when it 

filed its Motion for Reconsideration. 

Motion for Reconsideration, 

Attachments 1–4. Despite these claims 

of competition, the Postal Service 

acknowledged that the Inbound Letter 

Post product is on the market dominant 

product list and that it has not requested 

to transfer all or part of the Inbound 

Letter Post product to the competitive 

product list. Motion for Reconsideration 

at 6. 

In its Motion for Reconsideration, the 

Postal Service stated that it explored the 

potential transfer of Inbound Letter Post 

small packets from the market dominant 

to the competitive products list. Id. 

However, the Postal Service stated that 

one obstacle to transferring all or part of 

the Inbound Letter Post product from 

the market dominant product list to the 

competitive product list relates to the 

‘‘inability to separate Inbound Letter 

Post that is subject to the Private 

Express Statutes [(PES)] from Inbound 

Letter Post that is not subject to the 

PES.’’ Id. 

These claims raised the question of 

whether Inbound Letter Post should be 

wholly or partially transferred from the 

market dominant product list to the 

competitive product list. Rather than 

attempt to address these issues in 

Docket No. ACR2017, the Commission 

concluded that the best course of action 

is to initiate a separate proceeding to 

evaluate these issues, including the nonpublic attachments the Postal Service 

provided with its Motion for 

Reconsideration. 

Accordingly, the Commission 

establishes the instant proceeding to 

examine the classification of the 

Inbound Letter Post product. The 

Commission is issuing a Commission 

Information Request (CIR) concurrently 

with this Order. Once a sufficient record 

has been developed, the Commission 

will issue a procedural schedule 

inviting comment. 

Pursuant to 39 U.S.C. 505, James 

Waclawski is designated as an officer of 

the Commission (Public Representative) 

to represent the interests of the general 

public in this proceeding. 

Additional information may be 

accessed via the Commission’s website 

at http://www.prc.gov. 

IV. Ordering Paragraphs 

It is ordered: 

1. The Commission hereby establishes 

Docket No. PI2018–1 to review issues 

related to the classification of the 

Inbound Letter Post product and parts 

thereof. 

2. Pursuant to 39 U.S.C. 505, James 

Waclawski is designated as an officer of 

the Commission (Public Representative) 

to represent the interests of the general 

public in this proceeding. 

3. The Secretary shall arrange for 

publication of this order in the Federal 

Register. 

By the Commission. 

Stacy L. Ruble, 

Secretary. 

[FR Doc. 2018–15284 Filed 7–17–18; 8:45 am] 

BILLING CODE 7710–FW–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83623; File No. SR– 

NASDAQ–2018–051] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend The 

Nasdaq Options Market LLC (‘‘NOM’’) 

Rules and Adopt a Zero Bid Options 

Rule 

July 12, 2018. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on June 29, 

2018, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I and 

II below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend The 

Nasdaq Options Market LLC (‘‘NOM’’) 

Rules at Chapter V, Section 3, entitled 

‘‘Trading Halts’’ and Chapter VI, Section 


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