Document Headings

                    Document headings vary by document type but may contain                    the following:                  
                -                       the agency or agencies that issued and signed a document                    
                -                       the number of the CFR title and the number of each part                      the document amends, proposes to amend, or is directly                      related to                    
                -                       the agency docket number / agency internal file number                    
                -                       the RIN which identifies each regulatory action listed in                      the Unified Agenda of Federal Regulatory and Deregulatory                      Actions                    

                    See the                                          Document Drafting Handbook                                        for more details.                  

###### Postal Regulatory Commission

          - [Docket No. MC2010-24; Order No. 457]

# AGENCY:

 Postal Regulatory Commission.

# ACTION:

 Notice.

# SUMMARY:

 The Commission is establishing a docket to consider the Postal Service's proposed nonpostal services Mail Classification Schedule language. It solicits comments to assist in this task.

# DATES:

 Comments are due: June 4, 2010. Reply comments are due: June 18, 2010.

      ( print page 27376)    

# ADDRESSES:

                         Submit comments electronically via the Commission's Filing Online system at                         *http://www.prc.gov.*                         Commenters who cannot submit their views electronically should contact the person identified in the                         **For Further Information Contact**                         section by telephone for advice on alternatives to electronic filing.                    

# FOR FURTHER INFORMATION CONTACT:

                         Stephen L. Sharfman, General Counsel, 202-789-6820 or                         *stephen.sharfman@prc.gov.*

# SUPPLEMENTARY INFORMATION:

## Table of Contents

I. Introduction

II. Postal Service Filings

III. Notice of Filings

IV. Ordering Paragraphs

## I. Introduction

                    Pursuant to section 404(e) of title 39, the Commission in Order No. 154 authorized 14 activities of the Postal Service to continue as “nonpostal services.”1                     By this notice, the Commission initiates Docket No. MC2010-24 to consider the Postal Service's proposed Mail Classification Schedule (MCS) language for its authorized nonpostal services.                

## II. Postal Service Filings

                    While the proceedings resulting in Order No. 154 were ongoing, the Postal Service filed proposed MCS language for six activities which the Postal Service identified as nonpostal services.2                     Of the six activities, Order No. 154 provisionally accepted language for four nonpostal services for insertion into the MCS.3

                    Further, Order No. 154 required the Postal Service to file proposed MCS language for the 10 other nonpostal services that it authorized.                     *Id.*                     at 90.4                     In response to Order No. 154, the Postal Service filed a notice of proposed MCS language for those nonpostal services.5                     One service, the Warranty Repair Program, had been temporarily allowed subject to review in Phase II of that proceeding. At the conclusion of Phase II, the Warranty Repair Program was ordered terminated. Therefore, consideration of the proposed language for that product is moot.6                     The Postal Service's Notice proposes to realign and combine these authorized nonpostal services into eight products.                

The eight renamed nonpostal services are classified as follows: Market Dominant—Alliances with the Private Sector to Defray Cost of Key Postal Functions, and Philatelic Sales; Competitive—Rental, Leasing, Licensing or Other Non-Sale Disposition of Tangible Property; Advertising; Mail Services Promotion; Training Facilities and Related Services; Licensing of Intellectual Property Other than OLRP; and Equipment Repair Service.

                    For the two market dominant nonpostal products, the Postal Service does not propose to realign Philatelic Sales. The Postal Service proposes to align the other market dominant service, MoverSource, an alliance with a private sector company to provide change-of-address assistance, with another alliance, WhitePages. For each of these latter activities, costs are defrayed through advertising solicited by the private sector entity. The Postal Service proposes to entitle this product “Alliances with the Private Sector to Defray Cost of Key Postal Functions.”                     *Id.*                     at 7.                

                    With respect to Philatelic Sales, the Postal Service filed a notice of amendment to its proposed MCS language to incorporate into the nonpostal Philatelic Sales product its current shipping charges for philatelic order fulfillment.7                     The amendment reflects the Postal Service's proposed method for reflecting shipping fees in the MCS pursuant to Commission Order No. 391.8

                    Web-based linking agreements are divided into three separate categories. Agreements providing links to merchants' Web sites are styled “Advertising.”9                     Agreements to list a vendor on                     *usps.com*                     and to promote a vendor's mailing services or product are entitled “Mail Services Promotion.”                     *Id.*                     at 8. The third category of web-based alliances is the aforementioned market dominant MoverSource-WhitePages alignment.                

                    The Postal Service proposes to maintain the alignment of services described in Order No. 154 for Training Facility and Licensing of Intellectual Property Other Than OLRP.10*Id.*                     at 6. The Postal Service restyles “Training Facility” as “Training Facilities and Related Services.”                     *Id.*                     at Appendix A.                

                    The Postal Service proposes to rename some competitive nonpostal services to reflect more accurately the nature of the activities within each service.                     *Id.*                     at 3. The Postal Service asserts that to reduce potential confusion, some nonpostal activities are realigned to be independent of the names of current vendors or programs, or the location of the activity. This permits the Postal Service to enter into a similar agreement with others, or to accept advertising for other products in other venues.                     *Id.*                     at 4. Some similar services are grouped together such as certain web-based agreements within the broader category of Advertising.                     *Id.*                     at 4-5. Additionally, the Postal Service                           ( print page 27377)                        requests that web-based linking agreements providing links to merchant websites be treated as price categories rather than separate products pending review in a rulemaking on the form and content of rules for nonpostal services.                     *Id.*                     at 5. The Postal Service asserts that designating the linking agreements as price categories pending further review removes uncertainty as to whether a section 3642 proceeding to add new products to the MCS would be required for any new web-based linking agreements.                     *Id.*

                    The nonpostal service described in Order No. 154 as Non-Sale Lease Agreements (Non-Government) includes leasing of parking facilities, office space, antenna towers, advertising, storage, and retail lobby space. Order No. 154 at 66. Non-sale dispositions of real property are sometimes structured as a “license” of real property. Notice at 9-10. The FedEx Drop Boxes arrangement identified in Order No. 154 as a separate nonpostal service also involves the licensing or rental of real property.                     *Id.*                     at 10.                

                    The Postal Service notes that the Commission did not specifically address the rental of personal property in Order No. 154 and proposes to include the rental of equipment such as forklifts within this group. The Postal Service further notes that for years it has rented personal property such as exercise and audio visual equipment as part of its training facilities operations, but charges are accounted for as part of the training operations, and the Postal Service does not recommend including them in this description.                     *Id.*                     The Postal Service proposes to retitle this group of activities “Leasing, Licensing and Other Non-Sale Disposal of Tangible Property.”                     *Id.*

## III. Notice of Filings

The Commission establishes Docket No. MC2010-24 for consideration of the Postal Service's proposed language for nonpostal products attached to this order to be included in the MCS.

                    As noted above, the MCS language recognized by the Postal Service is attached to this order. Part 3020 of the Commission's rules provides for establishing product lists. Subpart A of the current MCS rules includes provisions for nonpostal products. 39 CFR 3020.13(a)(6) and (b)(5). Subpart B provides for changes to the product lists initiated by the Postal Service. The Commission will treat the Postal Service's filings as a unified request to modify the product lists.11

Under section 3020.34 of the rules, upon review of these Postal Service filings together with comments of interested parties, the Commission may approve the requests, institute further proceedings, permit the Postal Service an opportunity to modify its request, or take other appropriate action. Pursuant to 39 U.S.C. 404(e)(5) and 39 CFR 3020.33, the Commission provides interested persons an opportunity to express views and offer comments on the planned modifications and whether they are consistent with the policies of 39 U.S.C. 3642.

Comments on the proposed nonpostal services MCS language filed by the Postal Service are due no later than June 4, 2010. Reply comments, if any, are due June 18, 2010.

Pursuant to 39 U.S.C. 505, Emmett Rand Costich is appointed to serve as officer of the Commission (Public Representative) to represent the interests of the general public in the above-captioned docket.

## IV. Ordering Paragraphs

*It is ordered:*

1. Docket No. MC2010-24 is established to consider the Postal Service's proposed nonpostal product Mail Classification Schedule language filed with its notices of March 10, 2009 and April 26, 2010, together with the nonpostal service Mail Classification Schedule language for four nonpostal services filed November 7, 2008 referred to in the body of this order.

2. Docket No. MC2009-20 is closed.

3. Comments are due no later than June 4, 2010.

4. Reply comments are due no later than June 18, 2010.

5. The Commission appoints Emmett Rand Costich as Public Representative to represent the interests of the general public in this proceeding.

                    6. The Secretary shall arrange for publication of this order in the                     **Federal Register**                    .                

By the Commission.

Shoshana M. Grove,

Secretary.

# Footnotes

1.                             Docket No. MC2008-1, Review of Nonpostal Services Under the Postal Accountability and Enhancement Act, December 19, 2008 (Order No. 154);                         *see**also*                         Errata Notice, January 9, 2009 (Errata), petition denied,                         *United States Postal Service v. Postal Regulatory Commission,*                         2010 WL 1189617 No. 09-1032 (CADC, March 30, 2010).                    
        Back to Citation      

2.                             The proposed language included the following six activities: Officially Licensed Retail Products (OLRP), Passport Photo Service, Photocopying Service, Electronic Postmark (EPM), Notary Public Services, and Stored Value Cards. Docket No. MC2008-1, United States Postal Service Notice of Filing of Proposed Mail Classification Schedule Language for Six Nonpostal Services Pursuant to Order No. 120, November 7, 2008. For the convenience of interested persons, the Mail Classification Schedule language proposed by the Postal Service in this filing and two other filings, dated March 10, 2009 and April 26, 2010 and discussed further below, is attached to this order for illustrative purposes and will not be published in the                         *Federal**Register*. The language is available on the Commission's Web site (                        *http://www.prc.gov*).                    
        Back to Citation      

3.                             Notary Public Services and Stored Value Cards were not authorized as nonpostal services. Order No. 154 at 40, 89.                    
        Back to Citation      

4.                             Of the 10 authorized nonpostal services, Philatelic Sales and MoverSource were classified as market dominant. The remaining eight authorized nonpostal services classified as competitive were Affiliates for Website, Affiliates—Other (Linking Only), FedEx Drop Boxes, Licensing Programs Other Than Officially Licensed Retail Products, Meter Manufacturers Marketing Program, Non-Sale Lease Agreements (Non-Government), Training Facilities, and Warranty Repair Program (in part, subject to review in Phase II).                         *See*                         Errata at Appendix I, Part B.                    
        Back to Citation      

5.                             United States Postal Service Notice of Filing of Proposed Mail Classification Schedule Language for Nonpostal Activities in Response to Order No. 154, March 10, 2009 (Notice).                    
        Back to Citation      

6.                             The Warranty Repair Program failed to meet the grandfather requirement for a nonpostal service under section 404(e) of title 39 insofar as it relates to the provision of service to others. Docket No. MC2008-1(Phase II), Phase II Review of Nonpostal Services Under the Postal Accountability and Enhancement Act, January 14, 2010, at 31, 39 (Order No. 392); appeals docketed,                         *Le Page's 2000 Inc. and Le Page's Products, Inc. v. Postal Regulatory Commission,*                         No. 10-1031 (CADC, February 12, 2010) consolidated with                         *United States Postal Service v. Postal Regulatory Commission,*                         No. 10-1033 (CADC, February 12, 2010). The decision in Phase II regarding the Warranty Repair Program was not appealed and is final.                    
        Back to Citation      

7.                             Notice of the United States Postal Service of Amendment to Mail Classification Schedule Language for Nonpostal Activities Required to be Filed by Order No. 154, April 26, 2010.                    
        Back to Citation      

8.                             Docket No. MC2009-19, Order Approving Addition of Postal Service to the Mail Classification Schedule Product Lists, January 13, 2010, at 12-15 (Order No. 391).                    
        Back to Citation      

9.                             The Postal Service cites as current agreements Maponics, Label Universe, and Mail Service Provider agreements.                         *Id.*                         at 8.                    
        Back to Citation      

10.                             In Order No. 392, the Commission limited the scope of its licensing authorization by denying authorization for Postal Service branding of mailing and shipping products related to Postal Service operations for general retail distribution. Order No. 392 at 39; appeals docketed,                         *see*                         note 6,                         *infra.*                         The Postal Service has not filed to amend its proposed language for “Licensing of Intellectual Property Other Than OLRP” to conform to Order No. 392.                    
        Back to Citation      

11.                             Because the Postal Service's filings are pursuant to Commission orders, the filing requirements of subpart B shall, to the extent necessary, be waived.                    
        Back to Citation      

[FR Doc. 2010-11512 Filed 5-13-10; 8:45 am]

BILLING CODE 7710-FW-S