[Federal Register Volume 86, Number 129 (Friday, July 9, 2021)]
[Proposed Rules]
[Pages 36246-36248]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-14636]


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POSTAL REGULATORY COMMISSION

39 CFR Chapter III

[Docket No. PI2021-2; Order No. 5930]


Public Inquiry

AGENCY: Postal Regulatory Commission.

ACTION: Advanced notice of proposed rulemaking.

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SUMMARY: The Commission seeks further input from the public about what 
regulations promulgated by the Commission may be necessary to carry out 
the requirements of agency law. This document informs the public of 
this proceeding, invites public comment, and takes other administrative 
steps.

DATES: Comments are due: August 26, 2021.

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. Discussion
IV. Comments
V. Ordering Paragraphs

I. Introduction

    In this docket, the Commission seeks further input from the public 
about what regulations promulgated by the Commission may be necessary 
to carry out the requirements of 39 U.S.C. 601. Section 601 describes 
instances when letters may be carried out of the mail, or when the 
letter monopoly does not apply to a mailpiece. In particular, the 
Commission seeks to determine whether regulations promulgated by the 
Commission are needed to carry out those statutory exemptions.

II. Background

    The Postal Service has exclusive rights in the carriage and 
delivery of letters under certain circumstances. This letter monopoly 
is codified in the Private Express Statutes (PES), which are a group of 
civil and criminal statutes that make it unlawful for any entity other 
than the Postal Service to send or carry letters. See 18 U.S.C. 1693-
1699; 39 U.S.C. 601-606.\1\
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    \1\ Although these provisions of the U.S. Code are customarily 
referred to collectively as the ``Private Express Statutes,'' they 
do not all relate to private expresses or prohibit carriage of 
letters out of the mails.
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    Section 601 provides specific instances (exceptions) where letters 
may be carried out of the mail (i.e., not subject to the letter 
monopoly). Section 601(a) sets forth the conditions under which a 
letter may be carried out of the mail, which include requiring that the 
letter be enclosed in an envelope, that the proper amount of postage is 
affixed to the envelope, and that the postage is canceled. 39 U.S.C. 
601(a).
    Section 601(b) provides additional exceptions such that the letter 
monopoly does not apply to letters charged more than six times the 
current rate for the first ounce of a Single-Piece First Class Letter 
or to letters weighing more than 12.5 ounces. See 39 U.S.C. 601(b)(1), 
(b)(2). The ``grandfather clause'' in Section 601(b)(3) references 
exceptions from prior Postal Service regulations that permitted private 
carriage as in effect on July 1, 2005. 39 U.S.C. 601(b)(3); see also 39 
CFR 310.1 and 39 CFR 320.2-320.8 (2005).
    Section 601(c), which is the subject of this proceeding, directs 
the Commission (rather than the Postal Service) to promulgate any 
regulations necessary to carry out this section. 39 U.S.C. 601(c). This 
Public Inquiry seeks to answer how the Commission shall meet this 
statutory requirement.
    Prior to the Postal Accountability and Enhancement Act (PAEA) of 
2006, the Postal Service issued regulations that purported to suspend 
the PES.\2\ The PAEA included the term ``purport'' to describe the 
Postal Service's efforts to suspend the PES, reflecting some 
disagreement between the Postal Service and policymakers about the 
Postal Service's authority to promulgate such regulations prior to the 
PAEA.\3\ Post-PAEA, the law clearly cedes such authority to the 
Commission. These regulations defined the term ``letter'' as ``a 
message directed to a specific person or address and recorded in or on 
a tangible object,'' subject to several provisions. 39 CFR 310.1(a) 
(2005). The regulations also described several statutory exceptions to 
the letter monopoly, such as when the letter accompanies and relates to 
cargo or when a special messenger is used. See 39 CFR 310.3 (2005). In 
addition, the

[[Page 36247]]

regulations purported to establish administrative suspensions of the 
PES (39 CFR 310.1(a)(7) n.1, 320 (2005)), including suspensions for 
certain data processing materials or for extremely urgent letters. See 
39 CFR 320.2, 320.6 (2005).
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    \2\ See Postal Accountability and Enhancement Act, Public Law 
109-435, 120 Stat. 3198 (2006); see also 39 CFR 310, 320 (2005).
    \3\ See H.R. Rep. No. 109-66, 109th Cong., 1st Sess., pt. 1, at 
58 (2005) (H.R. Rep. No. 109-66).
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    These regulations were originally promulgated by the Postal Service 
in 1974 and were amended several times prior to enactment of the 
PAEA.\4\ In 2003, the President's Commission on the United States 
Postal Service recommended that the scope of the letter monopoly should 
be clarified and periodically reviewed by a Postal Regulatory Board.\5\ 
In 2006, Congress passed the PAEA, which, inter alia, added new price 
and weight limits to the postal monopoly, repealed the Postal Service's 
purported authority to adopt administrative suspension of the monopoly, 
and repealed the Postal Service's authority to implement provisions of 
the criminal code defining the scope of the monopoly.\6\
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    \4\ See Comprehensive Standards for Permissible Private 
Carriage, 39 FR 33211 (Sept. 16, 1974).
    \5\ Report of the President's Commission on the United States 
Postal Service, Embracing the Future: Making the Tough Choices to 
Preserve Universal Mail Service, July 31, 2003, at 71 (President's 
Commission). The President's Commission recommended ``transforming 
the narrowly focused Postal Rate Commission [ ] into an independent 
Postal Regulatory Board.'' Id. at XIII.
    \6\ See H.R. Rep. No. 109-66 at 57. Congress stated that ``the 
bill clarifies the scope of the statutory monopoly that historically 
has been defined solely by the [Postal Service].'' Id. at 58.
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    In addition to adding price and weight limits as exceptions 
(Sections 601(b)(1), (b)(2)), Congress also added a ``grandfather 
clause'' in Section 601(b)(3) to authorize the continuation of private 
activities that the Postal Service had purportedly permitted by 
regulations to be carried out of the mail. The House Report on the PAEA 
explains that this paragraph protects mailers and private carriers who 
had relied upon the regulations adopted as of the date of the bill. See 
H.R. Rep. No. 109-66 at 58. Congress also eliminated the Postal 
Service's authority to adopt any regulations creating exceptions or 
defining the scope of the postal monopoly. See 39 U.S.C. 401(2), 
404(a)(1), 601. Congress instead gave the Commission the authority to 
promulgate ``[a]ny regulations necessary to carry out this section 
[601].'' \7\ To date, the Commission has not promulgated any 
regulations pursuant to Section 601(c).
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    \7\ 39 U.S.C. 601(c). See Docket Nos. MC2012-14 and R2012-8, 
Order Approving Addition of Valassis Direct Mail, Inc. Negotiated 
Service Agreement to the Market Dominant Product List, August 23, 
2012, at 6-7 (Order No. 1448) (citing Section 601(c) and stating 
that the Postal Service no longer has authority to issue regulations 
interpreting or defining the postal monopoly); see also Docket No. 
MC2012-13, Order Conditionally Granting Request to Transfer Parcel 
Post to the Competitive Product List, July 20, 2012, at 6-7 (Order 
No. 1411) (``As a result of the PAEA, the Postal Service no longer 
has authority to issue regulations interpreting or defining the 
postal monopoly. The Commission now has the authority to promulgate 
such regulations.''). Order No. 1411 at 7 n.13.
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    In Docket No. RM2020-4, the Commission issued an advance notice of 
proposed rulemaking to seek input from the public about what 
regulations promulgated by the Commission may be necessary to carry out 
the requirements of 39 U.S.C. 601.\8\ In particular, the Commission 
sought comments on fourteen issues, such as whether the statutory 
requirements of Section 601 are clear and concise, whether any terms in 
the statute required further definition, and whether consumers and 
competitors can easily determine when a mailpiece is subject to 
monopoly protections. Order No. 5422 at 7-8.
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    \8\ See Docket No. RM2020-4, Advance Notice of Proposed 
Rulemaking to Consider Regulations to Carry Out the Statutory 
Requirements of 39 U.S.C. 601, February 7, 2020 (Order No. 5422).
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    Prior to the comment deadline, the Commission issued two Chairman's 
Information Requests, regarding certain Postal Service regulations.\9\ 
In its response, the Postal Service explained that it had not issued 
regulations or other administrative directives in connection with 
Sections 601(b)(1) and (2) since the effective date of amended Section 
601(b).\10\ The Postal Service also provided information regarding 
alternative payment agreements pursuant to 39 CFR 310.2(b).\11\ In 
addition, the Postal Service provided information regarding advisory 
opinions pursuant to 39 CFR 310.6. Docket No. RM2020-4, Response to 
CHIR No. 1, question 2.
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    \9\ Docket No. RM2020-4, Chairman's Information Request No. 1, 
March 4, 2020 (Docket No. RM2020-4, CHIR No. 1); Docket No. RM2020-
4, Chairman's Information Request No. 2, April 1, 2020 (Docket No. 
RM2020-4, CHIR No. 2).
    \10\ Docket No. RM2020-4, Responses of the United States Postal 
Service to Questions 1-3 of Chairman's Information Request No. 1, 
March 11, 2020, question 1 (Docket No. RM2020-4, Response to CHIR 
No. 1).
    \11\ Docket No. RM2020-4, Response to CHIR No. 1, question 3; 
see also Response of the United States Postal Service to Chairman's 
Information Request No. 2, April 3, 2020, question 1 (Docket No. 
RM2020-4, Response to CHIR No. 2).
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    Comments were received from The Berkshire Company; Taxpayers 
Protection Alliance; American Consumer Institute Center for Citizen 
Research; United Parcel Service, Inc.; FedEx Corporation; Netflix, 
Inc.; Small Business & Entrepreneurship Council; the National Postal 
Policy Council and the National Association of Presort Mailers; the 
Association for Postal Commerce; the Postal Service; and the Public 
Representative.\12\ Based on the comments received, the Commission 
found it necessary to gather more information from the public before 
promulgating regulations under Section 601 and therefore, that 
proceeding is held in abeyance until the conclusion of this 
inquiry.\13\
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    \12\ Docket No. RM2020-4, Comments of The Berkshire Company in 
Response to Order No. 5442, April 6, 2020; Docket No. RM2020-4, 
Comments of Taxpayers Protection Alliance, April 6, 2020; Docket No. 
RM2020-4, Comments of American Consumer Institute Center for Citizen 
Research Regarding Docket No. RM2020-4 Submitted to the United 
States Postal Regulatory Commission, April 6, 2020; Docket No. 
RM2020-4, Comments of United Parcel Service, Inc. on Advance Notice 
of Proposed Rulemaking to Consider Regulations to Carry Out the 
Statutory Requirements of 39 U.S.C. 601, April 7, 2020; Docket No. 
RM2020-4, Comments of FedEx Corporation, April 7, 2020; Docket No. 
RM2020-4, Comments of Netflix, Inc., April 7, 2020; Docket No. 
RM2020-4, Comments of Small Business & Entrepreneurship Council, 
April 7, 2020; Docket No. RM2020-4, Comments of the National Postal 
Policy Council and the National Association of Presort Mailers, 
April 7, 2020; Docket No. RM2020-4, Comments of the Association for 
Postal Commerce, April 7, 2020; Docket No. RM2020-4, Comments of the 
United States Postal Service in Response to Order No. 5422, April 7, 
2020; Docket No. RM2020-4, Public Representative Comments, April 7, 
2020.
    \13\ Docket No. RM2020-4, Order Holding Rulemaking in Abeyance, 
July 2, 2021 (Order No. 5929).
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III. Discussion

    In this proceeding, the Commission seeks to focus its inquiry on 
the statutory exemptions in Sections 601(a) and (b), and what 
regulations under Section 601(c), if any, are needed to carry out those 
exemptions. In particular, the Commission limits this inquiry to two 
issues: (1) Whether Postal Service regulations administering current 
Sections 601(a), 601(b)(1), and 601(b)(2) should be adopted by the 
Commission; and (2) what private carrier services are within the scope 
of Section 601(b)(3).
    First, the Commission is interested in identifying Postal Service 
regulations that administer Sections 601(a), 601(b)(1), and 601(b)(2) 
and if the Commission should adopt them. Section 601(a) provides for 
the private carriage of letters when, among other things, the letter is 
in an envelope that is properly addressed, the proper amount of postage 
is affixed to the envelope, and the postage is canceled in ink by the 
sender. 39 U.S.C. 601(a). Sections 601(b)(1) and (b)(2) further provide 
that a letter must meet price and weight requirements in order to be 
carried out of the mail. 39 U.S.C. 601(b)(1), 601(b)(2).
    Prior to the PAEA, the Postal Service issued regulations concerning 
the restrictions on the private carriage of

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letters. Several of these regulations were modified and superseded by 
the adoption of the PAEA. For example, the PAEA supersedes a Postal 
Service regulation that allows private carriage if the amount paid is 
``at least three dollars or twice the applicable U.S. postage for 
First-Class Mail (including priority mail) whichever is greater.'' 39 
CFR 320.6(c). In addition, a Postal Service regulation closely tracks 
the language in Section 601(a) but also allows for alternative payment 
agreements in written agreements between customers and the Postal 
Service. 39 CFR 310.2(b). The Commission is specifically interested in 
whether certain Postal Service regulations implement the current 
statutory exemptions found in Sections 601(a), 601(b)(1), and 
601(b)(2), and whether the Commission should adopt or revise these and 
other regulations to clarify the statutory exemptions.
    Second, the Commission is interested in identifying what private 
carrier services are within the scope of Section 601(b)(3). See 39 
U.S.C. 601(b)(3). The ``grandfather clause'' in Section 601(b)(3) 
authorized the continuation of private activities that the Postal 
Service had purportedly permitted by regulations to be carried out of 
the mail. Specifically, it allows private carriage that is within the 
scope of specific purported suspensions to the letter monopoly. 39 CFR 
310.1 (2005) included twelve putative exceptions to the definition of 
``letter'' and/or purported suspensions of the letter monopoly. 39 CFR 
320.2-8 (2005) provided seven additional purported suspensions of the 
PES, including for certain data processing materials, for certain 
letters of college and university organizations, and for certain 
international-ocean carrier-related documents. The Commission seeks 
comments on what services were ``described by regulations of the United 
States Postal Service . . . that purport to permit private carriage by 
suspension of the operation of this section'' as of July 1, 2005. See 
39 U.S.C. 601(b)(3). Additionally, the Commission seeks suggestions 
regarding what regulations may be needed to enumerate in clear terms 
all instances where private carrier services are within the scope of 
Section 601(b)(3).
    For both issues, the goal of the Commission is to determine whether 
it is necessary to clarify the statutory exemptions regarding the 
letter monopoly. The Commission seeks information as to how best to 
resolve any ambiguities in the application of the exceptions. The 
Commission also inquires whether consolidating regulations and 
definitions under one section, rescinding redundant and/or conflicting 
sections, or standardizing the terminology used in the regulations 
would be helpful.

IV. Comments

    The Commission invites interested persons to identify whether there 
are any Postal Service regulations that the Commission should adopt to 
carry out the requirements of Section 601 and if so, whether the 
Commission should revise those regulations. In addition, the Commission 
seeks comments that identify what private carrier services are within 
the scope of Section 601(b)(3) and whether regulations are needed to 
clearly enumerate those services. Commenters are encouraged to provide 
specific suggestions on revisions or recommend new regulations.
    The Commission recognizes that comments on these issues have been 
provided in Docket No. RM2020-4. However, given the length of time 
since those comments were received and the breadth of different topics 
covered by the previous advance notice of proposed rulemaking, the 
Commission finds it prudent to solicit updated comments to assist in 
focusing this proceeding on a few particular issues. Commenters who 
previously submitted comments in Docket No. RM2020-4 may provide 
updated comments in this proceeding. The Commission envisions that the 
comments provided in this proceeding will help inform any proposed 
rules that may be issued in Docket No. RM2020-4.
    Comments are due August 26, 2021. Material filed in this docket 
will be available for review on the Commission's website, http://www.prc.gov.
    Pursuant to 39 U.S.C. 505, Kenneth E. Richardson will serve as the 
officer of the Commission (Public Representative) to represent the 
interests of the general public in this docket.

V. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket No. PI2021-2 for the purpose 
of considering potential regulations under 39 U.S.C. 601.
    2. Interested persons may submit written comments on potential 
regulations no later than August 26, 2021.
    3. Pursuant to 39 U.S.C. 505, Kenneth E. Richardson will serve as 
the officer of the Commission (Public Representative) to represent the 
interests of the general public in this proceeding.
    4. The Secretary shall arrange for publication of this Notice in 
the Federal Register.

    By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2021-14636 Filed 7-8-21; 8:45 am]
BILLING CODE 7710-FW-P