[Federal Register Volume 83, Number 157 (Tuesday, August 14, 2018)]
[Proposed Rules]
[Pages 40183-40184]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17499]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3010

[Docket No. RM2016-6; Order No. 4751]


Motions Concerning Mail Preparation Changes

AGENCY: Postal Regulatory Commission.

ACTION: Proposed rulemaking.

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SUMMARY: The Commission is noticing the partial rescindment of a 
previously proposed rule. This notice informs the public of the 
docket's reinstatement, invites public comment, and takes other 
administrative steps.

DATES: Comments are due on or before September 13, 2018.

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:

Table of Contents

I. Introduction
II. Background
III. Description of the Proposed Rule
IV. Comments Requested

I. Introduction

    The Commission initiates this notice of proposed rulemaking (NPR) 
to partially rescind the rule concerning procedures for mail 
preparation changes in response to the recent decision in United States 
Postal Serv. v. Postal Reg. Comm'n, 886 F.3d 1253 (D.C. Cir. 2018).

II. Background

    In Docket No. R2013-10R, the Commission determined that a change to 
the Intelligent Mail Barcoding (IMb) requirements constituted a change 
in rates requiring compliance with the price cap under 39 U.S.C. 
3622.\1\ The Postal Service appealed the Commission's determination to 
the United States Court of Appeals for the District of Columbia (the 
Court). In United States Postal Serv. v. Postal Reg. Comm'n, 785 F.3d 
740, 751 (D.C. Cir. 2015), the Court found that ``changes in rates'' 
under 39 U.S.C. 3622 could include changes to mail preparation 
requirements and were not limited to ``only changes to the official 
posted prices of each product.'' Id. However, the Court remanded the 
matter to the Commission so that it could articulate an intelligible 
standard to determine when mail preparation requirement changes 
constitute changes in rates subject to the price cap. Id. at 744.
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    \1\ Docket No. R2013-10, Order on Price Adjustments for Market 
Dominant Products and Related Mail Classification Changes, November 
21, 2013, at 5-35 (Order No. 1890).
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    In response to the Court's remand, the Commission issued Order No. 
3047, which set forth a standard to determine when mail preparation 
changes require compliance with the Commission's price cap rules.\2\ 
Under Sec.  3010.23(d)(2), the Postal Service must make reasonable 
adjustments to its billing determinants to account for the effects of 
classification changes that result in the introduction, deletion, or 
redefinition of rate cells. The standard established by the Commission 
in Order No. 3047 provided that mail preparation changes could have 
rate effects when they resulted in the deletion or redefinition of rate 
cells as set forth by Sec.  3010.23(d)(2). Order No. 3047 at 59. In 
conjunction with Order No. 3047, the Commission initiated a separate 
rulemaking proceeding in this docket to develop a procedural rule that 
would ensure the Postal Service properly accounted for the rate effects 
of mail preparation changes ``in accordance with the Commission's 
standard articulated in Order No. 3047.'' \3\
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    \2\ Docket No. R2013-10R, Order Resolving Issues on Remand, 
January 22, 2016 (Order No. 3047).
    \3\ Notice of Proposed Rulemaking on Motions Concerning Mail 
Preparation Changes, January 22, 2016, at 1-2 (Order No. 3048). The 
Notice of Proposed Rulemaking on Motions Concerning Mail Preparation 
Changes was published in the Federal Register on February 1, 2016. 
See 81 FR 5085 (February 1, 2016).
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    While the rulemaking was pending, the Postal Service requested the 
Commission reconsider the standard set forth in Order No. 3047. In 
response, the Commission issued Order No. 3441 resolving the request 
for reconsideration and maintaining the standard articulated in Order 
No. 3047.\4\ The Postal Service petitioned the Court for review of the 
revised standard set forth in Order Nos. 3047 and 3441.\5\
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    \4\ Docket No. R2013-10R, Order Resolving Motion for 
Reconsideration of Commission Order No. 3047, July 20, 2016 (Order 
No. 3441).
    \5\ Petition for Review, United States Postal Serv. v. Postal 
Reg. Comm'n, 886 F.3d 1253 (D.C. Cir. 2018).
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    During the pendency of the appellate proceedings, the Commission 
issued Order No. 4393 in this docket, adopting a final procedural rule 
concerning mail preparation changes.\6\ The final rule institutes 
publication requirements for changes to mail preparation rules and 
requires the Postal Service to (1) affirmatively designate whether or 
not a change to a mail preparation

[[Page 40184]]

requirement implicates the price cap; and (2) show by a preponderance 
of the evidence, if the designation is challenged, that the price cap 
does not apply to the change. The Postal Service also petitioned the 
Court for review of this final rule.\7\
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    \6\ Order Adopting Final Procedural Rule for Mail Preparation 
Changes, January 25, 2018, at 22-23 (Order No. 4393). The Order 
Adopting Final Procedural Rule for Mail Preparation Changes was 
published in the Federal Register on March 5, 2018. See 83 FR 4585 
(March 5, 2018). See also Revised Notice of Proposed Rulemaking, 
March 27, 2017 (Order No. 3827). The Revised Notice of Proposed 
Rulemaking was published in the Federal Register on March 31, 2017. 
See 82 FR 16015 (March 31, 2017).
    \7\ See Petition for Review, United States Postal Serv. v. 
Postal Reg. Comm'n, No. 18-1059 (D.C. Cir. February 26, 2018).
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    Shortly after the Commission adopted the final rule in this docket, 
the Court issued its decision in United States Postal Serv. v. Postal 
Reg. Comm'n, 886 F.3d 1253 (D.C. Cir. 2018), vacating the Commission's 
standard in Order No. 3047. As a result of this decision, the 
Commission and the Postal Service filed a joint motion to remand the 
appeal of the final rule back to the Commission for further 
proceedings.\8\ The Commission institutes this NPR in response to the 
Court's order granting the motion for remand.\9\
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    \8\ See Unopposed Motion to Remand Case, United States Postal 
Serv. v. Postal Reg. Comm'n, No. 18-1059 (D.C. Cir. May 10, 2018).
    \9\ See Order, United States Postal Serv. v. Postal Reg. Comm'n, 
No. 18-1059 (D.C. Cir. May 30, 2018).
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    As indicated in Order No. 4393, in addition to the reporting 
requirement, the procedural rule set forth requirements designed to 
ensure compliance with the price cap based on the Commission's standard 
articulated in Order No. 3047. Because the substantive standard 
established in Order No. 3047 was vacated by the Court, the Commission 
proposes to rescind part of the final rule that relies upon the 
standard. The Commission intends to develop an appropriate standard and 
propose other appropriate rules implementing that standard in due 
course.

III. Description of the Proposed Rule

    The proposed rule revises Sec.  3010.23(d)(5). As described above, 
Sec.  3010.23(d)(5) institutes a reporting requirement whereby the 
Postal Service must provide published notice of all mail preparation 
changes in a single source. The Postal Service began complying with the 
reporting requirement on March 22, 2018.\10\ The rule also requires the 
Postal Service to (1) affirmatively designate whether or not an 
individual mail preparation change requires compliance with Sec.  
3010.23(d)(2) in accordance with the standard set forth in Order No. 
3047; and (2) demonstrate by a preponderance of the evidence, in 
response to a challenge, that a mail preparation change does not 
require compliance with Sec.  3010.23(d)(2). Both the designation and 
evidentiary burden parts of the rule require a substantive standard. 
Because that standard was vacated and a new standard has yet to be 
developed, the proposed rule revises paragraph (d)(5) and removes the 
affirmative designation requirement and evidentiary burden. The 
reporting requirement will remain in the rule and exists independent of 
any standard as it is necessary to provide standardized, transparent 
reporting of mail preparation changes.\11\
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    \10\ See Updated Notice Under Rule 3010.23(d)(5), March 22, 
2018.
    \11\ See Order No. 4393 at 8-10 (justification for the reporting 
requirement).
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    Although the Commission is instituting a new proceeding to seek 
comment on an appropriate standard to determine when mail preparation 
changes are ``changes in rates'' under 39 U.S.C. 3622, the absence of 
an immediate standard necessitates partial rescission of the rule.

IV. Comments Requested

    Interested persons are invited to provide written comments 
concerning the proposed rule. As the Commission is instituting a 
separate proceeding for comments on a new standard, the comments should 
be limited to the revised procedural rule.
    Comments are due no later than 30 days after the date of 
publication of this notice in the Federal Register. All comments and 
suggestions received will be available for review on the Commission's 
website, http://www.prc.gov.
    It is ordered:
    1. Interested persons may submit comments no later than 30 days 
from the date of the publication of this notice in the Federal 
Register.
    2. Kenneth E. Richardson will continue to serve 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.

List of Subjects in 39 CFR Part 3010

    Administrative practice and procedure, Postal Service.

    For the reasons discussed in the preamble, the Commission proposes 
to amend chapter III of title 39 of the Code of Federal Regulations as 
follows:

PART 3010--REGULATION OF RATES FOR MARKET DOMINANT PRODUCTS

0
1. The authority citation of part 3010 continues to read as follows:

    Authority: 39 U.S.C. 503; 3662.

0
2. Amend Sec.  3010.23 by revising paragraph (d)(5) to read as follows:


Sec.  3010.23  Calculation of percentage change in rates.

* * * * *
    (d) * * *
    (5) Procedures for mail preparation changes. The Postal Service 
shall provide published notice of all mail preparation changes in a 
single, publicly available source. The Postal Service shall file notice 
with the Commission of the single source it will use to provide 
published notice of all mail preparation changes.
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[FR Doc. 2018-17499 Filed 8-13-18; 8:45 am]
BILLING CODE 7710-FW-P