`[Federal Register Volume 60, Number 43 (Monday, March 6, 1995)]
[Rules and Regulations]
[Pages 12116-12121]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-5115]



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POSTAL RATE COMMISSION
39 CFR Part 3001

[Docket No. RM95-1; Order No. 1042]


Rules of Practice and Procedure

AGENCY: Postal Rate Commission.

ACTION: Final rule.

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SUMMARY: In response to a petition filed by the United States Postal 
Service, the Postal Rate Commission initiated this rulemaking to 
consider re-enactment of special rules of practice and procedure 
applicable to Postal Service requests to change Express Mail rates in 
response to [[Page 12117]] market conditions. Interested persons were 
invited to comment. 59 FR 65985-65987 (December 22, 1994). After 
reviewing the comments submitted, the Commission has determined that 
the published rules should be re-enacted, subject to a five-year sunset 
provision.

EFFECTIVE DATE: These rules will become effective March 6, 1995 and 
ending March 6, 2000 if not re-enacted by the Commission after the 
provision of an opportunity for public comment.

ADDRESSES: Correspondence should be sent to Margaret P. Crenshaw, 
Secretary of the Commission, 1333 H Street NW, Washington, DC 20268-
0001.

FOR FURTHER INFORMATION CONTACT: Stephen Sharfman, Legal Advisor 
(telephone: (202) 789-6820).

SUPPLEMENTARY INFORMATION: On August 15, 1994, the United States Postal 
Service filed a petition for institution of a rulemaking to re-enact 
Commission rules that establish special procedures for considering 
Postal Service requests to change Express Mail rates in response to 
market conditions. These rules, codified at 39 CFR 3001.57 through 
3001.57c, were adopted as the culmination of the Commission's Docket 
No. RM88-2 in August, 1989; at that time, the Commission included a 
five-year sunset provision in 39 CFR 3001.57(b). Order No. 836, 54 FR 
33681 (August 16, 1989). Consequently, by their own terms the rules 
ceased to be effective in mid-August of 1994.
    The Commission granted the Postal Service's petition and began this 
rulemaking on December 14, 1994. Order No. 1038; Notice of Proposed 
Rulemaking, 59 FR 65985-87 (December 22, 1994). In its Notice of 
Proposed Rulemaking, the Commission published the pre-existing rules, 
stated its preliminary agreement with the Postal Service's position 
that the Express Mail market response rules should be retained, and 
established January 23, 1995, as the due date for comments by 
interested parties. Id. at 65985.
    Two sets of comments were submitted in response to the Notice of 
Proposed Rulemaking in this docket.1 United Parcel Service (UPS), 
a competitor of the Postal Service in the expedited delivery market, 
opposes re-enactment of the rules because: (1) Circumstances have 
changed since their initial adoption in a manner that allegedly negates 
any possible justification for their continued existence; (2) the rules 
are unnecessary because other available Commission rules provide 
adequate avenues for expedited consideration of specific Postal Service 
rate requests; and (3) the rules allegedly are contrary to the letter 
and spirit of the Postal Reorganization Act, the Administrative 
Procedure Act, and fundamental considerations of due process. The 
Commission's Office of the Consumer Advocate (OCA) opposes re-enactment 
on similar grounds: that there is less demonstrable need for, and 
opportunity to use, the rules than was anticipated when they were 
adopted in Docket No. RM88-2; and that it would be more efficient to 
devise comprehensive rules of procedure applicable to any class of 
mail, in the context of the Commission's Procedural Streamlining 
Inquiry, Docket No. RM95-2. Because these comments raise a variety of 
issues, the latter will be grouped by category for consideration.

    \1\Additionally, while no provision had been made for reply 
comments, Advertising Mail Marketing Association (AMMA) submitted 
reply comments on February 3, 1995, together with a motion for leave 
to file such comments. In order to avoid prejudice to other parties 
that may have been inclined to file replies, the Commission shall 
grant AMMA's motion only in part, and will consider its comments 
strictly as an expression of support for re-enactment of the pre-
existing rules.
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I. Alleged Legal Defects

    Commenter United Parcel Service argues that certain features of 
rules 57 through 57c violate pertinent portions of the Postal 
Reorganization Act, the Administrative Procedure Act, and applicable 
due process requirements. For the most part, these comments replicate 
earlier arguments considered and rejected during the course of the 
RM88-2 proceeding, and the Commission finds them equally unpersuasive 
now.
    UPS suggests that by contemplating the recommendation of Express 
Mail rates near the level of estimated attributable costs, the market 
response rules could yield rates which fail to recover the portion of 
institutional costs ``reasonably assignable'' to Express Mail, in 
contravention of 39 U.S.C. 3622(b)(3). UPS Comments at 7-8. UPS also 
argues that the recommendation of such rates would produce an overall 
rate schedule that fails to satisfy the ``fair and equitable'' standard 
of Sec. 3622(b)(1). Id. at 8-9. However, these criticisms overlook the 
special rationale on which the market response rules are premised, and 
the particular restrictions on the rates which the Postal Service can 
propose under the rules. The appropriate level of ``reasonably 
assignable'' costs is determined by reference to the non-cost factors 
in Sec. 3622(b);2 the Postal Service could invoke rules 57 through 
57c only where one or more of the policies of the Act arguably applies 
with such force as to justify a minimal contribution to institutional 
costs.3 Additionally, the rules establish two different protective 
rate floors which the Postal Service must observe in its requests. 
Under section 57b(b), the Service is forbidden to propose rates less 
than the greater of average per piece attributable costs: (1) As 
determined in the most recent omnibus rate case, or (2) as estimated 
for the most recent fiscal year for which information is available. 
Section 57b(b)(2) also prohibits proposal of a rate ``for any rate cell 
which is lower than the estimated test period attributable cost of 
providing that rate cell with service.'' The Commission retained these 
restrictions in the final rules adopted in Docket No. RM88-2, over the 
objections of the Postal Service, in order ``to eliminate the risk that 
new Express Mail rates would be a burden on other classes of mail[,]'' 
and to ensure ``that the relationships among the classes of mail--in 
terms of contribution to institutional costs--are disturbed as little 
as possible.'' Order No. 836 at 15, 13. Thus, the Commission has 
already considered and accommodated the concerns raised by UPS, and 
there is no reasonable basis for concern that re-enactment of the rules 
would degrade the Commission's sound application of the Sec. 3622(b) 
(1) and (3) factors.

    \2\See National Association of Greeting Card Publishers v. U.S. 
Postal Service, 462 U.S. 810, 834 (1983): ``The Rate Commission is 
to assign remaining costs on the basis of the other eight factors 
set forth by Sec. 3622(b).''
    \3\Section 57a(c) requires that every formal request under 
Secs. 57 through 57c ``contain an explanation of why the change 
proposed by the Postal Service is a reasonable response to the 
change in the market for expedited delivery services to which it is 
intended to respond.''
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    The Commission also rejects the claims of UPS that the market 
response rules constitute ``a clear license to engage in unfair 
competition with private sector enterprises, in violation of Section 
3622(b)(4) [,]'' and that they ``violate the discrimination prohibition 
in Section 403(c) of the Act'' by establishing a preference for Express 
Mail users. UPS Comments at 9. During the course of the RM88-2 
proceeding the Commission received comments from several parties--
including the Bureau of Competition of the Federal Trade Commission--
regarding the Postal Service's participation in the expedited parcel 
delivery market. On the basis of that record, the Commission concluded 
that there was no justification for:

* * * any finding that the Postal Service is so restricting the 
ability of other firms to compete in the expedited delivery market 
through use of the Private Express Statutes that it should not be 
given even the potential [[Page 12118]] to change its rate more 
quickly in response to developments in the market.

Notice of Proposed Rule, 54 FR 11404-11405 (March 20, 1989). The 
Commission also stated its resolve to ``take into account the effect on 
the market'' when recommending rates under the expedited rules. Id. No 
commenter in this docket claims that the Postal Service has engaged in 
anti-competitive conduct in the expedited delivery market in the 
interim.
    As to the claim of preference in violation of Sec. 403(c), the 
Commission concluded in RM88-2 that adoption of expedited procedural 
rules would not constitute ``undue or unreasonable'' discrimination 
because ``Express Mail is the only class for which evidence supporting 
such rules has been given.'' Id. at 11399. Lacking evidence of a need 
to change rates for other classes expeditiously in response to 
competition, and of the likely impact such rate changes would have on 
postal finances, the Commission found it unreasonable to reject the 
proposed rules for Express Mail. The Commission also alluded to the 
possibility of extending the applicability of those rules, ``[i]f it 
later appears that similar procedures might be suitable for another 
class. * * *'' Id. The Commission is in much the same posture in this 
docket, but with the significant difference that Docket No. RM95-2 has 
been initiated to consider ``potential mechanisms for expediting its 
proceedings conducted under 39 U.S.C. 3624(a),'' which includes rate 
change proceedings. See 59 FR 65987 (December 22, 1994). Consequently, 
the Commission's prior conclusion that the rules for Express Mail pose 
no undue preference problem is now reinforced by its contemporaneous 
docket to consider similar mechanisms for other types of requests.
    The Commission also finds no merit in the arguments that the rules 
would operate in violation of the hearing requirements of the 
Administrative Procedure Act, or would trench upon the due process 
rights of intervenors. Contrary to those claims, the Postal Service 
would be required to sustain its burden as proponent under rules 57 
through 57c, beginning with the data filing requirements laid down in 
Sec. 3001.57a. If the Commission concludes that the Service's 
presentation poses one or more genuine issues of material fact, either 
at the suggestion of an intervenor or on its own motion, a formal 
hearing would be held. See Sec. 57b(e)(5). Only in the event that no 
such issue was identified--an extremely rare occurrence in the 
Commission's institutional experience--would a hearing not be held. In 
the absence of any genuine issue of material fact, the Commission would 
be under no obligation to conduct a hearing.4

    \4\See Costle v. Pacific Legal Foundation, 445 U.S. 198, 213-16 
(1980).
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    The discovery and hearing procedures established in rule 57b 
admittedly require prompt action by all parties involved, in 
furtherance of the declared purpose ``to allow for consideration of 
Express Mail Market Response Rate Requests within 90 days, consistent 
with the procedural due process rights of interested parties.'' 
Sec. 3001.57c. However, in fashioning these procedures in Docket No. 
RM88-2, the Commission devoted considerable effort to striking a 
workable balance between expedition and the due process rights of 
interested parties. In response to comments, the Commission rejected 
some of the expedited procedures proposed by the Postal Service and 
supplemented others. Notice of Proposed Rulemaking (Second Notice), 54 
FR 11401-11403 (March 20, 1989); Notice of Proposed Rulemaking (Third 
Notice), 54 FR 25137-25139 (June 13, 1989). Nor did the Commission 
overlook the need for flexibility in administering the expedited 
procedural schedule. It stated: ``If any particular date causes 
difficulty, the Presiding Officer can grant an extension of time * * *. 
When the Commission reviews its experience with these rules, we will be 
prepared to judge whether any of the scheduled dates should be changed 
in the rules.'' Third Notice of Proposed Rulemaking, 54 FR 25139. 
Consequently, at this time the Commission finds no basis for concern 
that re-enactment of these carefully considered rules would jeopardize 
the due process rights of participants in proceedings under rules 57 
through 57c.

II. Institutional Issues

    United Parcel Service also comments that re-enactment of the rules 
would be inappropriate because they allegedly pose a ``risk of 
seriously undermining Congress' carefully crafted division of authority 
between the Commission and the Postal Service.'' UPS Comments at 15. 
UPS suggests that the rules would improperly delegate the Commission's 
responsibility for determining attributable costs to the Postal 
Service; could be invoked to nullify the Commission's rate 
recommendations for Express Mail in omnibus rate decisions and 
introduce reduced rates that could be in effect for years; and would 
serve as ``a device for selectively deregulating postal ratemaking in 
the case of only one favored class of mail.'' Id. at 15-16. In the 
Commission's view, these comments mischaracterize the purpose and 
intended operation of the Express Mail market response rules.
    As the source and repository of the raw data from which cost 
estimates are derived, the Postal Service necessarily provides the 
principal input to the process of determining attributable cost levels. 
The Commission's functions thereafter are to provide a forum in which 
interested parties can probe and challenge the Service's estimates; and 
to decide whether the Service's proposals are supported by substantial 
evidence and consistent with the Postal Reorganization Act's policies 
and factors. Rules 57 through 57c provide expedited procedures, but 
also preserve these essential functions. They do not allow the 
Commission to recommend Express Mail rates that are unsupported by 
credible cost evidence or otherwise inconsistent with statutory 
factors. See the rule for decision in Sec. 3001.57c. They will not be 
allowed to become a substitute for scrutiny in omnibus rate cases, as 
the Commission clearly stated in Docket No. RM88-2. See Second Notice 
of Proposed Rulemaking, 54 FR 11403 (March 20, 1989). Therefore, in no 
meaningful sense can they be characterized as a vehicle for 
deregulating Express Mail rates.

III. The Question of Need

    Both United Parcel Service and the Office of the Consumer Advocate 
take the position that, because of the Postal Service's failure to 
invoke rules 57 through 57c during their initial five-year period of 
effectiveness, and changed circumstances in the expedited delivery 
market in that time, there is no demonstrable need for re-enacting the 
rules. On the basis of available information, the Commission believes 
that this conclusion may be incorrect, and at the very least is 
premature. While the expedited delivery market doubtless has changed in 
five years, the Postal Service appears to be correct in its 
characterization that, ``[t]he most important feature that 
distinguishes competitors is price.'' Postal Service Petition at 4; see 
PRC Op. R94-1, November 30, 1994, para. 5402. In this fiercely 
competitive market, it is possible that expeditious adjustments in 
Express Mail rates may be useful to sustain the viability of that 
service to meet future competitive exigencies.5 
[[Page 12119]] Consequently, the Commission will re-enact rules 57 
through 57c for an additional five-year period.6

    \5\The Commission cannot agree with the contentions of UPS and 
OCA that the current modest contribution of Express Mail to the 
institutional costs of the Postal Service represents an 
``irreducible minimum'' (OCA Comments at 4), leaving no room for 
operation of the market response rules. In recommending a 119 
percent coverage for Express Mail in the recent omnibus rate case--a 
target ``slightly lower than that proposed by the Postal Service''--
the Commission neither stated nor suggested that this figure was an 
``irreducible minimum.'' See PRC Op. R94-1, para. 4052. On the 
contrary, the finding that 119 percent is an acceptable coverage 
factor for Express Mail at this time suggests (all other things 
being equal) that market response rates nearer average estimated 
attributable costs would be more acceptable than if a higher 
coverage factor had been recommended in the last omnibus rate case.
    \6\For the sake of clarity, section 57(b) of the re-enacted 
rules has been amended by deletion of the word ``initially'' from 
its first sentence.
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IV. Regulatory Evaluation

    It has been determined pursuant to 5 U.S.C. 605(b) that these rules 
will apply exclusively to the United States Postal Service in 
proceedings conducted by the Postal Rate Commission, and to parties who 
choose to participate in those proceedings. Therefore, it is certified 
that these rules will not have a significant impact on a substantial 
number of small entities under the terms of the Regulatory Flexibility 
Act, 5 U.S.C. 501 et seq. Because these rules will only apply to the 
Postal Service and other participants in Commission proceedings, it has 
also been determined that these rules do not have sufficient federalism 
implications to warrant the preparation of a Federalism Assessment 
pursuant to Executive Order 12612. Inasmuch as the rules impose 
information-gathering and reporting requirements exclusively upon the 
United States Postal Service for the purpose of conducting postal rate 
proceedings, they do not contain any information collection 
requirements as defined in the Paperwork Reduction Act [44 U.S.C. 
3502(4)], and consequently the review provisions of 44 U.S.C. 3507 and 
the implementing regulations in 5 CFR part 1320 do not apply.

List of Subjects in 39 CFR Part 3001

    Administrative practices and procedure, Postal Service.

    For the reasons set out in the preamble, 39 CFR part 3001 is 
amended as follows:

PART 3001--RULES OF PRACTICE AND PROCEDURE

    1. The authority citation for 39 CFR part 3001 continues to read as 
follows:

    Authority: 39 U.S.C. 404(b), 3603, 3622-24, 3661, 3662, 84 Stat. 
759-62, 764, 90 Stat. 1303; [5 U.S.C. 553], 80 Stat. 383.

    2. Sections 3001.57 through 3001.57c are added to subpart B to read 
as follows:


Sec. 3001.57  Market Response Rate Requests for Express Mail service--
purpose and duration of rules.

    (a) This section and Secs. 3001.57a through 3001.57c only apply in 
cases in which the Postal Service requests an expedited recommended 
decision pursuant to section 3622 of the Postal Reorganization Act on 
changes in rates and fees for Express Mail service, where the proposed 
changes are intended to respond to a change in the market for expedited 
delivery services for the purpose of minimizing the loss of Express 
Mail contribution to institutional costs recommended in the most recent 
omnibus rate case. These rules set forth the requirements for filing 
data in support of such rate proposals and for providing notice of such 
requests, and establish an expedited procedural schedule for evaluating 
Market Response Rate Requests. These rules may not be used when the 
Postal Service is requesting changes in Express Mail rates as part of 
an omnibus rate case. Further explanation concerning these rules can be 
found at 54 FR 11394-11413 (March 20, 1989), 54 FR 25132-42 (June 13, 
1989) and PRC Order No. 836.
    (b) This section and Secs. 3001.57a through 57c are to be effective 
for the limited period of five years from the date of their adoption by 
the Commission. During that period the Commission will continue to 
analyze the need for these rules to enable the Postal Service to 
respond to changes in the market for expedited delivery services, and 
the impact of these procedures on Postal Service proposals. These rules 
will cease to be effective at the end of this period unless they have 
been reissued by the Commission following a Notice of Proposed 
Rulemaking published in the Federal Register which provides an 
appropriate opportunity for public comments.


Sec. 3001.57a  Market Response Rate Requests--data filing requirements.

    (a) Each formal request made under the provisions of Secs. 3001.57 
through 3001.57c shall be accompanied by such information and data as 
are necessary to inform the Commission and the parties of the nature 
and expected impact of the change in rates proposed. Except for good 
cause shown, the information specified in paragraphs (c) through (i) of 
this section shall also be provided with each request.
    (b) Except as otherwise expressly provided in this section, the 
information required by Sec. 3001.54 (b) through (r) must be filed only 
for those subclasses and services for which the Postal Service requests 
a change in rates or fees. Test period volume, cost, and revenue 
estimates presented in satisfaction of rule 57a shall be for four 
postal quarters beginning after the filing date of the request. The 
cost roll-forward may be developed by extending the cost forecasting 
model used in the last omnibus rate case (utilizing available actual 
data). Volume and revenue estimates required by these rules shall 
utilize, to the extend practicable, the factors identified in rule 
54(j)(6), and must be fully explained, with all available supporting 
documentation supplied, but they need not be econometrically derived.
    (c) Every formal request made under the provisions of Secs. 3001.57 
through 3001.57c shall contain an explanation of why the change 
proposed by the Postal Service is a reasonable response to the change 
in the market for expedited delivery services to which it is intended 
to respond.
    (d) Every formal request made under the provisions of Secs. 3001.57 
through 3001.57c shall be accompanied by the then effective Domestic 
Mail Classification Schedule sections which would have to be altered in 
order to implement the changes proposed by the Postal Service, and, 
arranged in a legislative format, the text of the replacement Domestic 
Mail Classification Schedule sections the Postal Service proposes.
    (e) In addition to the required test period cost estimates, every 
formal request made under the provisions of Secs. 3001.57 through 
3001.57c shall be accompanied by a statement of the attributable costs 
by segment and component for Express Mail service determined in 
accordance with the attributable cost methodology adopted by the 
Commission in the most recent omnibus rate case, for the base year used 
in that case, and for each fiscal year thereafter for which cost data 
is available. If the Postal Service believes that an adjustment to that 
methodology is warranted it may also provide costs using alternative 
methodologies as long as a full rationale for the proposed changes is 
provided.
    (f) Each formal request made under the provisions of Secs. 3001.57 
through 3001.57c shall include a description of all operational 
changes, occurring since the most recent omnibus rate case, having an 
important impact on the attributable cost of Express Mail. The Postal 
Service shall include an analysis and estimate of the cost impact of 
each such operational change.
    (g) Every formal request made under the provisions of Secs. 3001.57 
through 3001.57c shall be accompanied by a statement of the actual 
Express Mail [[Page 12120]] revenues of the Postal Service from the 
then effective Express Mail rates and fees for the most recent four 
quarters for which information is available.
    (h) Each formal request made under the provisions of Secs. 3001.57 
through 3001.57c shall be accompanied by a complete description of the 
change in the market for expedited delivery services to which the 
Postal Service proposal is in response, a statement of when that change 
took place, the Postal Service's analysis of the anticipated impact of 
that change on the market, and a description of characteristics and 
needs of customers and market segments affected by this change which 
the proposed Express Mail rates are designed to satisfy.
    (i) Each formal request made under the provisions of Secs. 3001.57 
through 3001.57c shall include estimates, on a quarterly basis, of test 
period volumes, revenues, and attributable costs determined in 
accordance with the attributable cost methodology adopted by the 
Commission in the most recent omnibus rate case for each Express Mail 
service for which rate changes are proposed assuming:
    (1) rates remain at their existing levels, and
    (2) rates are changed after 90 days to the levels suggested in the 
request.
    (j)(1) Each formal request made under the provisions of 
Secs. 3001.57 through 3001.57c shall be accompanied by the following 
information, for each quarter following the base year in the most 
recent omnibus rate case:
    (i) Estimated volume by rate cell, for each Express Mail service;
    (ii) Total postage pounds of Express Mail rated at:
    (A) up to \1/2\ pound,
    (B) \1/2\ pound up to 2 pounds,
    (C) 2 pounds up to 5 pounds; and
    (iii) Total pounds of Express Mail and of each other subclass of 
mail carried on hub contracts.
    (2) In each instance when rates change based on a proceeding under 
the provisions of Secs. 3001.57 through 3001.57c the Postal Service 
shall provide, one year after the conclusion of the test period, the 
data described in Sec. 3001.57a(j)(1)(i)-(iii), for each of the four 
quarters of the test period.
    (k) Each formal request made under the provisions of Secs. 3001.57 
through 3001.57c shall include analyses to demonstrate:
    (1) that the proposed rates are consistent with the factors listed 
in 39 U.S.C. 3622(b),
    (2) that the proposed rate changes are in the public interest and 
in accordance with the policies and applicable criteria of the Act, and
    (3) that the proposed rates will preserve, or minimize erosion of, 
the Express Mail contribution to institutional costs recommended in the 
most recent omnibus rate case.
    (l) Each formal request made under the provisions of Secs. 3001.57 
through 3001.57c shall be accompanied by a certificate that service of 
the filing in accordance with Sec. 3001.57b(c) has been made.


Sec. 3001.57b  Market Response Rate Requests--expedition of public 
notice and procedural schedule.

    (a) The purpose of this section is to provide a schedule for 
expediting proceedings when a trial-type hearing is required in a 
proceeding in which the Postal Service proposes to adjust rates for 
Express Mail service in order to respond to a change in the market for 
expedited delivery services.
    (b) The Postal Service shall not propose for consideration under 
the provisions of Secs. 3001.57 through 3001.57c rates lower than:
    (1) the average per piece attributable cost for Express Mail 
service determined in the most recent omnibus rate case, or
    (2) the average per piece attributable cost for Express Mail 
service as determined by the Postal Service in accordance with 
Sec. 3001.57a(e) for the most recent fiscal year for which information 
is available, whichever is higher. Neither shall the Postal Service 
propose a rate for any rate cell which is lower than the estimated test 
period attributable cost of providing that rate cell with service.
    (c)(1) Persons who are interested in participating in Express Mail 
Market Response Rate Request cases may register at any time with the 
Secretary of the Postal Rate Commission, who shall maintain a publicly 
available list of the names and business addresses of all such Express 
Mail Market Response Registrants. Persons whose names appear on this 
list will automatically become parties to each Express Mail Market 
Response rate proceeding. Other interested persons may intervene 
pursuant to Sec. 3001.20 within 28 days of the filing of a formal 
request made under the provisions of Secs. 3001.57 through 3001.57c. 
Parties may withdraw from the register or a case by filing a notice 
with the Commission.
    (2) When the Postal Service files a request under the provisions of 
Secs. 3001.57 through 3001.57c it shall on that same day effect service 
by hand delivery of the complete filing to each Express Mail Market 
Response Registrant who maintains an address for service within the 
Washington metropolitan area and serve the complete filing by Express 
Mail service on all other Registrants. Each Registrant is responsible 
for insuring that his or her address remains current.
    (3) When the Postal Service files a request under the provisions of 
Secs. 3001.57 through 3001.57c, it shall on that same day send by 
Express Mail service to all participants in the most recent omnibus 
rate case a notice which briefly describes its proposal. Such notice 
shall indicate on its first page that it is a notice of an Express Mail 
Market Response Rate Request to be considered under Secs. 3001.57 
through 3001.57c, and identify the last day for filing a notice of 
intervention with the Commission.
    (d) In the absence of a compelling showing of good cause, the 
Postal Service and parties shall calculate Express Mail costs in 
accordance with the methodologies used by the Commission in the most 
recent omnibus rate case. In the analysis of customers' reactions to 
the change in the market for expedited delivery services which prompts 
the request, the Postal Service and parties may estimate the demand for 
segments of the expedited delivery market and for types of customers 
which were not separately considered when estimating volumes in the 
most recent omnibus rate case.
    (e) (1) In the event that a party wishes to dispute as an issue of 
fact whether the Postal Service properly has calculated Express Mail 
costs or volumes (either before or after its proposed changes), or 
wishes to dispute whether the change in the market for expedited 
delivery services cited by the Postal Service has actually occurred, or 
wishes to dispute whether the rates proposed by the Postal Service are 
a reasonable response to the change in the market for expedited 
delivery services or are consistent with the policies of the Postal 
Reorganization Act, that party shall file with the Commission a request 
for a hearing within 28 days of the date that the Postal Service files 
its request. The request for hearing shall state with specificity the 
fact or facts set forth in the Postal Service's filing that the party 
disputes, and when possible, what the party believes to be the true 
fact or facts and the evidence it intends to provide in support of its 
position.
    (2) The Commission will not hold hearings on a request made 
pursuant to Secs. 3001.57 through 3001.57c unless it determines that 
there is a genuine issue of material fact to be resolved, and that a 
hearing is needed to resolve this issue.
    (3) Whether or not a hearing is held, the Commission may request 
briefs and/or argument on an expedited schedule, but in any 
circumstance it will issue its [[Page 12121]] recommended decision as 
promptly as is consistent with its statutory responsibilities.
    (4) In order to assist in the rapid development of an adequate 
evidentiary record, all participants may file appropriate discovery 
requests on other participants as soon as an Express Mail Market 
Response Rate Request is filed. Answers to such discovery requests will 
be due within 10 days. Objections to such discovery requests must be 
made within 10 days in the form of a Motion to Excuse from Answering, 
with service on the questioning participant made by hand, facsimile, or 
expedited delivery. Responses to Motions to Excuse from Answering must 
be submitted within seven days, and should such a motion be denied, the 
answers to the discovery in question are due within seven days of the 
denial thereof. It is the Commission's intention that parties resolve 
discovery disputes informally between themselves whenever possible. The 
Commission, therefore, encourages the party receiving discovery 
requests considered to be unclear or objectionable to contact counsel 
for the party filing the discovery requests whenever further 
explanation is needed, or a potential discovery dispute might be 
resolved by means of such communication.
    (5) If, either on its own motion, or after having received a 
request for a hearing, the Commission concludes that there exist one or 
more genuine issues of material fact and that a hearing is needed, the 
Commission shall expedite the conduct of such record evidentiary 
hearings to meet both the need to respond promptly to changed 
circumstances in the market and the standards of 5 U.S.C. 556 and 557. 
The procedural schedule, subject to change as described in paragraph 
(e)(6) of this section, is as follows: Hearings on the Postal Service 
case will begin 35 days after the filing of an Express Mail Market 
Response Rate Request; parties may file evidence either in support of 
or in opposition to the Postal Service proposal 49 days after the 
filing; hearings on the parties' evidence will begin 56 days after the 
filing; briefs will be due 70 days after the filing; and reply briefs 
will be due 77 days after the filing.
    (6) The Presiding Officer may adjust any of the schedule dates 
prescribed in (e)(5) of this section in the interests of fairness, or 
to assist in the development of an adequate evidentiary record. 
Requests for the opportunity to present evidence to rebut a submission 
by a participant other than the Postal Service should be filed within 
three working days of the receipt of that material into the evidentiary 
record, and should include a description of the evidence to be offered 
and the amount of time needed to prepare and present it. Requests for 
additional time will be reviewed with consideration as to whether the 
requesting participant has exercised due diligence, and whether the 
requesting participant has been unreasonably delayed from fully 
understanding the proposal.


Sec. 3001.57c  Express Mail Market Response--rule for decision.

    The Commission will issue a recommended decision in accordance with 
the policies of 39 U.S.C., and which it determines would be a 
reasonable response to the change in the market for expedited delivery 
services. The purpose of Secs. 3001.57 through 3001.57c is to allow for 
consideration of Express Mail Market Response Rate Requests within 90 
days, consistent with the procedural due process rights of interested 
persons.

    Issued by the Commission on February 17, 1995.
Margaret P. Crenshaw,
Secretary.
[FR Doc. 95-5115 Filed 3-3-95; 8:45 am]
BILLING CODE 7710-FW-P`