[Federal Register Volume 70, Number 206 (Wednesday, October 26, 2005)]
[Notices]
[Pages 61848-61850]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-21401]


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POSTAL RATE COMMISSION

[Docket No. MC2006-1; Order No. 1447]


Permanent Parcel Return Service

AGENCY: Postal Rate Commission.

ACTION: Notice and order.

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SUMMARY: Parcel Return Service (PRS), which the Postal Service 
currently offers on an experimental basis for two parcel post rate 
categories, was scheduled to expire October 19, 2003. Shortly before 
the expiration date, the Service filed a request to establish one of 
these categories (Parcel Select) as a permanent offering and to allow 
users to purchase an optional ancillary service (Certificate of 
Mailing). Participants in the experiment were not eligible for this 
ancillary service during the experimental stage. The Service's request 
triggered an automatic extension of the October 19, 2005 expiration 
date for Parcel Select. Given no participation in the other 
experimental category (Bound Printed Matter), the Service does not seek 
to make it permanent, and it expired as scheduled. This document 
establishes a formal docket to address the requested change in status 
for the PRS Parcel Select category and identifies several initial 
steps, including authorization of settlement negotiations.

DATES: 1. November 10, 2005: deadline for intervention.
    2. November 17, 2005: deadline for responses to waiver motion; 
prehearing conference (10 a.m.).
    3. November 14-15, 2005: dates reserved for settlement conference.

ADDRESSES: Submit comments electronically via the Commission's Filing 
Online system at http://www.prc.gov.

[[Page 61849]]


FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, general counsel, 
at 202-789-6818.

SUPPLEMENTARY INFORMATION:

Regulatory History

    1. 68 FR 34678 (June 10, 2003).
    2. 68 FR 48963 (August 15, 2003).
    On October 17, 2005, the Postal Service filed a request seeking a 
recommended decision approving a change in the Domestic Mail 
Classification Schedule (DMCS) making Parcel Return Service (PRS) 
permanent.\1\ A current experiment has been testing distinct rates and 
fees for certain parcels that are returns from customers to merchants. 
The Request, which includes five attachments, was filed pursuant to 
chapter 36 of the Postal Reorganization Act, 39 U.S.C. 3601 et seq.\2\
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    \1\ Request of the United States Postal Service for a 
Recommended Decision on Parcel Return Service, October 17, 2005 
(Request).
    \2\ Attachment A contains the proposed classification schedule 
provisions; Attachment B sets forth the proposed rate and fee 
schedules; Attachment C is the certification required by Commission 
rules 64(h) and 54(p); Attachment D is an index of testimonies; and 
Attachment E is the statement addressing compliance with various 
filing requirements.
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    The Postal Service has been offering experimental PRS since October 
19, 2003, in accordance with the Commission's recommended decision 
approving the stipulation and agreement in Docket No. MC2003-2 and the 
Governor's Decision of September 8, 2003, approving the recommendation. 
The experiment was scheduled to expire on October 19, 2005, unless a 
request to make the service permanent was pending before the Commission 
prior to that date.
    In contemporaneous filings, the Postal Service requests 
establishment of settlement procedures \3\ and submits a conditional 
motion for waiver of the filing requirements.\4\ The Request, 
accompanying testimony of witnesses Daniel (USPS-T-1), Miller (USPS-T-
2), and Koroma (USPS-T-3), and other related material are available for 
inspection in the Commission's docket room during regular business 
hours. They also can be accessed electronically, via the Internet, on 
the Commission's Web site (http://www.prc.gov).
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    \3\ United States Postal Service Request for Establishment of 
Settlement Procedures, October 17, 2005 (Request for Establishment 
of Settlement Procedures).
    \4\ Statement of the United States Postal Service Concerning 
Compliance with Filing Requirements and Conditional Motion for 
Waiver, October 17, 2005 (Motion for Waiver).
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I. Proposed Parcel Return Service

    The Postal Service proposes to make permanent a PRS applicable to 
merchandise returned as Parcel Post. This service allows commercial 
mailers or their third-party logistics providers to receive bulk 
delivery of returned parcels at a designated delivery unit or at a bulk 
mail center (BMC). The Postal Service offers PRS as a customer-friendly 
and more efficient means for consumers to return parcels to mail-order 
retailers. PRS is designed to be consistent with destination entry 
services provided at delivery units or BMCs, so that returned parcels 
can be picked up at the same facilities where outgoing packages are 
entered. This allows participants to benefit from the increased 
efficiency of dropping off and picking up parcels concurrently.
    The experiment recommended in Docket No. MC2003-2 included PRS for 
Bound Printed Matter (BPM) and Parcel Select rate categories. The BPM 
category did not garner any participation. Thus, a permanent 
classification is only requested for the Parcel Select rate categories. 
No permanent classification is being requested for BPM.
    The Postal Service also seeks classification changes to allow the 
certificate of mailing service to be available for purchase with PRS. 
This was not a part of the original experiment.
    PRS would add two new rate categories to the Parcel Post subclass, 
Parcel Select Return Delivery Unit (RDU), and Parcel Select Return Bulk 
Mail Center (RBMC). The proposed RDU rate for mail retrieved in bulk at 
delivery units is $2.11 per parcel for all parcels except oversized 
parcels. The proposed RDU rate for oversized parcels is $7.92. The 
proposed RBMC rates are identical to those proposed in the Postal 
Service's pending Docket No. R2005-1 request.\5\
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    \5\ Compare Request Attachment B with Docket No. R2005-1, 
Request of the United States Postal Service for a Recommended 
Decision on Changes in Rates of Postage and Fees for Postal 
Services, April 8, 2005, Attachment A at 43-49.
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    The proposed rates are based on workshare savings for returned 
parcels retrieved in bulk by shippers (or their agents) at designated 
delivery units or BMCs. The Postal Service indicates that the cost 
avoidance measures underlying its proposed rates are estimated using 
the same cost methodology and cost model presented in Docket No. 
MC2003-2 by witness Eggleston. The cost model has been modified to 
incorporate Docket No. R2005-1 data, as well as information obtained 
from field personnel. The Postal Service estimates that making this 
service permanent would add approximately $35 million to the Postal 
Service's revenue, around 2.8 percent of Parcel Post total revenue, and 
0.05 percent of total domestic mail revenue. It claims that PRS should 
not materially affect Parcel Post's contribution to institutional costs 
relative to other subclasses.

II. Conditional Request for Waiver of Certain Filing Requirements

    The Postal Service asserts that its filing complies with applicable 
Commission filing requirements through incorporation by reference but, 
as a precautionary alternative, seeks waiver of various filing 
requirements should the Commission conclude otherwise.\6\ In support of 
its Request, the Postal Service states that its Compliance Statement 
(Attachment E to the Request) addresses each filing requirement and 
indicates which parts of the filing satisfy each rule. It also notes 
that it has incorporated by reference pertinent materials from Docket 
No. R2005-1, the most recent omnibus rate case.\7\ It contends that 
incorporation satisfies the filing requirements pertaining to classes 
of mail and special services. In addition, the Postal Service contends 
that the PRS will not materially alter the rates, fees and 
classifications established in Docket No. R2005-1; rather, it would 
make permanent certain experimental classifications with the rates 
already proposed in that docket. Id. at 1. It concludes that its 
proposal will have only a limited impact on overall postal costs, 
volumes and revenues. Ibid. It also asserts that there is substantial 
overlap between information sought in the general filing requirements 
and the materials provided in Docket No. R2005-1. Id. at 2.
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    \6\ The Request seeks a waiver of rules 54 and 64. Motion for 
Waiver at 3.
    \7\ Motion for Waiver at 1 and 3.
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    Notwithstanding its principal position, the Postal Service 
recognizes that the Commission may find that it has failed to comply 
with the filing requirements. Accordingly, the Postal Service requests 
a waiver of certain filing requirements if the Commission concludes 
that the materials incorporated from the omnibus case are not 
sufficient to satisfy those requirements. Id. at 3.

III. The Postal Service Request for Settlement Procedures

    In support of its request for settlement procedures, the Postal 
Service asserts that the proposed classification change is 
straightforward, is of limited scope, and is the culmination of a 
successful two-year experiment established in Docket No. MC2003-2. 
Further, the Postal Service states that because the experimental 
service that the Request is

[[Page 61850]]

based upon resulted in settlement, it believes that the same level of 
widespread support exists for making the service permanent, and that it 
should have no significant adverse impact on other mailers or 
competitors. Accordingly, the Postal Service believes there is a 
distinct possibility for settlement.\8\ The Postal Service requests 
that a settlement conference be scheduled as soon as possible following 
the deadline for intervention. Id. at 2.
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    \8\ Request for Settlement Procedures at 1-2.
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IV. Commission Response

    Intervention. Those wishing to be heard in this matter are directed 
to file a notice of intervention on or before November 10, 2005. The 
notice of intervention shall be filed using the Internet (Filing 
Online) at the Commission's Web site (http://www.prc.gov), unless a 
waiver is obtained for hardcopy filing. 39 CFR 3001.9(a) and 10(a). No 
decision has been made at this point on whether a hearing will be held 
in this case. Notices should indicate whether participation will be on 
a full or limited basis. See 39 CFR 3001.20 and 3001.20a.
    Settlement. Given the Postal Service's representations that the 
proposal is widely supported and should not adversely affect 
competitors or other mailers, the Commission will authorize settlement 
negotiations in this proceeding. It appoints Postal Service counsel as 
settlement coordinator. In this capacity, Postal Service counsel shall 
file periodic reports on the status of settlement discussions. The 
Commission authorizes the settlement coordinator to hold a settlement 
conference on November 14-15, 2005. The Commission will make its 
hearing room available for this purpose upon request. Authorization of 
settlement discussions does not constitute a finding on the necessity 
of hearings in this case.
    Prehearing conference. A prehearing conference will be held 
November 17, 2005, at 10 a.m. in the Commission's hearing room. 
Participants shall be prepared to identify any issue(s) that would 
indicate a need to schedule a hearing, along with other matters 
referred to in this ruling.
    Conditional Motion for Waiver. Participants may comment on the 
Postal Service's conditional motion to waive certain filing 
requirements. Responses to the Postal Service's Motion for Waiver are 
due on or before November 17, 2005.
    Representation of the general public. In conformance with section 
3624(a) of title 39, the Commission designates Shelley S. Dreifuss, 
director of the Commission's Office of the Consumer Advocate (OCA), to 
represent the interests of the general public in this proceeding. 
Pursuant to this designation, Ms. Dreifuss will direct the activities 
of Commission personnel assigned to assist her and, upon request, will 
supply their names for the record. Neither Ms. Dreifuss nor any of the 
assigned personnel will participate in or provide advice on any 
Commission decision in this proceeding.

V. Ordering Paragraphs

    It is ordered:
    The Commission establishes Docket No. MC2006-1, Parcel Return 
Service, to consider the Postal Service Request referred to in the body 
of this order.
    1. The Commission will sit en banc in this proceeding.
    2. Postal Service counsel is appointed to serve as settlement 
coordinator in this proceeding. The Commission will make its hearing 
room available upon request for a settlement conference on November 14-
15, 2005, at such times as scheduled by the settlement coordinator.
    3. Shelley S. Dreifuss, director of the Commission's Office of the 
Consumer Advocate, is designated to represent the interests of the 
general public.
    4. The deadline for filing notices of intervention is November 10, 
2005.
    5. A prehearing conference will be held November 17, 2005, at 10 
a.m. in the Commission's hearing room.
    6. Responses to the Postal Service's Conditional Motion for Waiver 
of certain filing requirements are due on or before November 17, 2005.
    7. The Secretary shall arrange for publication of this notice and 
order in the Federal Register.

    By the Commission.

    Issued: October 21, 2005.
Garry J. Sikora,
Acting Secretary.
[FR Doc. 05-21401 Filed 10-25-05; 8:45am]
BILLING CODE 7710-FW-P