Federal Register / Vol. 61, No. 95 / Wednesday, May 15, 1996 / Rules and Regulations 24447

1See Postal Ratemaking in a Time of Change: A

Report by the Joint Task Force on Postal

Ratemaking (June 1, 1992).

2The American Bankers Association, American

Business Press, Advertising Mail Marketing

Association, Direct Marketing Association, Inc.,

Dow Jones & Company, Inc., Federal Express

Corporation, McGraw-Hill Companies, Inc., Major

Mailers Association, Mail Order Association of

America, Magazine Publishers of America,

Newspaper Association of America, National

Newspaper Association, the Commission’s Office of

the Consumer Advocate, Parcel Shippers

Association, Time Warner, Inc., United Parcel

Service, and the United States Postal Service

submitted comments in response to the Notice.

Some of these comments were not timely filed,

primarily owing to extraordinarily adverse weather

conditions on the date they were due. In order to

avoid prejudice to any party who wished to

comment, the Commission has considered all

comments received.

Dated: May 8, 1996.

David A. Longanecker,

Assistant Secretary for Postsecondary

Education.

The Secretary amends Part 685 of

Title 34 of the Code of Federal

Regulations as follows:

PART 685—WILLIAM D. FORD

FEDERAL DIRECT LOAN PROGRAM

1. The authority citation for Part 685

continues to read as follows:

Authority: 20 U.S.C. 1087a et. seq, unless

otherwise noted.

§ 685.209 [Amended]

2. Section 685.209 is amended by

revising the OMB control number

following the section to read as follows:

‘‘(Approved by the Office of

Management and Budget under control

number 1840–0672).’’

[FR Doc. 96–11944 Filed 5–14–96; 8:45 am]

BILLING CODE 4000–01–P

POSTAL RATE COMMISSION

39 CFR Part 3001

[Docket No. RM95–4; Order No. 1110]

Rules of Practice and Procedure

AGENCY: Postal Rate Commission.

ACTION: Final rule.

SUMMARY: This final rule sets forth

amendments to the Commission’s rules

of practice and procedure that provide

for expedited consideration of requests

of the United States Postal Service to:

conduct market tests of new postal

services in order to develop information

necessary to support a permanent mail

classification change; adopt, on a

provisional basis, mail classification

and associated rate changes that

supplement, but do not alter, existing

rates and mail classifications; and adopt

permanent but narrowly focused mail

classification changes that supplement,

but do not alter, existing rates and mail

classifications. In addition to these

amendments, the final rule adopts

provisions that allow the Postal Service

to use a multi-year test period for the

purpose of demonstrating the financial

viability of potential new services that

are the subject of a concurrent Postal

Service request.

EFFECTIVE DATE: These rules are effective

May 15, 1996 through May 15, 2001.

FOR FURTHER INFORMATION CONTACT:

Stephen L. Sharfman, Legal Advisor,

Postal Rate Commission, 1333 H Street

NW., Suite 300, Washington DC 20268–

0001 (telephone: 202/789–6820).

SUPPLEMENTARY INFORMATION: On

October 27, 1995, the Commission

published a notice of proposed

amendments to its rules of practice and

procedure designed to facilitate

expedited consideration of Postal

Service requests to: (1) Conduct market

tests of new postal services in order to

develop information necessary to

support a permanent mail classification

change; (2) adopt, on a provisional

basis, mail classification and associated

rate changes that supplement, but do

not alter, existing rates and mail

classifications; and (3) adopt permanent

but narrowly focused mail classification

changes that supplement, but do not

alter, existing rates and mail

classifications. The proposed

amendments also include provisions

that would permit the Postal Service to

request the Commission’s use of a multiyear test period for the purpose of

demonstrating the financial viability of

potential new services that are the

subject of a concurrent Postal Service

request. 60 FR 54981–89 (October 27,

1995). The Commission’s proposed

rules pursue specific recommendations

of the Joint Task Force on Postal

Ratemaking,1 and are responsive to a

majority of the initiatives requested by

the Postal Service in a petition

submitted to the Commission on April

13, 1995. Id. at 54981.

The Commission received 17 sets of

comments in response to the Notice of

October 27.2 The commenters present

divergent views on both the substance

of the Commission’s proposed rules and

the propriety of adopting them in the

current proceeding. Additionally,

several commenters suggest that the

Commission pursue other initiatives in

this proceeding that were originally

recommended by the Joint Task Force

Report and proposed in the Postal

Service’s petition. In view of these

diverse statements of position, it is

appropriate to begin with a discussion

of the considerations bearing on the

Commission’s determination to adopt

new rules at this time in four areas, on

a five-year trial basis.

I. Considerations Bearing on Adoption

of Proposed Rules

In the Notice of Proposed Rulemaking

published on October 27, the

Commission announced its

determination to promulgate draft rules

which would implement a majority, but

not all, of the seven procedural

initiatives contained in the Postal

Service’s Petition of April 13, 1995. 60

FR 54981. The Commission found that

four of the initiatives offered the greatest

promise for procedural improvement in

the near term. Accordingly, the

Commission published draft rules of

procedure governing market tests,

limited-duration provisional service

changes, minor classifications changes,

and multi-year test periods for new

services. With regard to the remaining

three Postal Service initiatives—rules

for limited scope rate cases, rate bands

for competitive services, and Negotiated

Service Agreements—the Commission

concluded that their consideration

should be deferred for various reasons,

but stated that each of the areas merits

further study and deliberation in

subsequent proceedings. Id. at 54981,

54985.

The Deferred Postal Service Proposals

Several commenters ask the

Commission to take up one or more of

the three remaining initiatives, either in

this proceeding or by initiating another

rulemaking in the near future. Time

Warner urges the Commission to

reconsider the determination to defer

consideration of rules for establishing

rate bands for competitive services and

rules providing for contract rates; Parcel

Shippers Association comments that

adoption of procedures allowing rate

bands and negotiated service contracts

is crucial to the competitive posture of

the Postal Service. Advertising Mail

Marketing Association, Dow Jones &

Company, Magazine Publishers of

America, and Mail Order Association of

America comment in favor of initiating

a proceeding in the near future to

consider one or more of the three

deferred initiatives. The Postal Service

states that it would have preferred that

all its proposals be addressed in this

proceeding, but urges the Commission

to issue a further rulemaking on the

remaining initiatives now that Docket

No. MC95–1 has been concluded.

The Commission continues to believe

that limited scope rate cases, rate bands,

and Negotiated Service Agreements

present issues that are qualitatively
24448 Federal Register / Vol. 61, No. 95 / Wednesday, May 15, 1996 / Rules and Regulations

3By way of analogy, the Postal Service’s rules

applicable to International Customized Mail (ICM)

service impose two objective qualifications on

potential international contract ratepayers:

minimum-volume qualifying criteria, and a singlepoint-of-origin criterion. International Mail Manual

§ 292; see 58 FR 29782.

different from, and more difficult than,

those in the four areas for which rules

have been proposed. For this reason

they will not be considered in the

current proceeding. In addition to the

unresolved legal and other issues cited

in the Notice of October 27, see 60 FR

54985, consideration of rules in these

three areas would necessarily involve an

exploration of technical and other

substantive issues. For example,

development of a rule providing for rate

bands would require consideration of

the technical resources available to

support adoption of a range of rates for

competitive mail categories and to gauge

the impact of their adoption, and

appropriate filing requirements to

support such requests. With regard to

Negotiated Service Agreements,

adoption of rules applicable to such

special classifications would involve

consideration of the objective criteria

that would be required of a mailer to

qualify for reduced contract rates.3 The

Commission is prepared to take up the

issues raised by limited scope rate cases,

rate bands, and Negotiated Service

Agreements in a forthcoming

rulemaking proceeding.

The Commission’s Proposed Rules

One commenter—the Newspaper

Association of America (NAA)—

opposes adoption of most of the

Commission’s proposed amendments as

unsound from a regulatory perspective.

NAA urges the Commission to abandon

the proposed rules for market tests,

provisional services, and multi-year test

periods because their adoption would

violate the regulatory structure of the

Postal Reorganization Act, unjustifiably

advancing competitive considerations at

the ultimate expense of captive

monopoly ratepayers.

A particular problem raised by the

proposed rules, according to NAA, ‘‘is

who bears any potential losses from

market tests of new services, provisional

services, or from multi-year test

periods.’’ NAA Comments at 4–5. Were

the Postal Service a private regulated

utility, NAA observes, the Service’s

losses would be disallowed from its rate

base, or at least segregated from the

costs of monopoly services, and

ultimately absorbed by its shareholders.

In contrast, when the Service loses

money, that loss is cumulated in the

Prior Years’ Losses component of the

revenue requirement, and adds to the

institutional costs of the Postal Service.

As a result, NAA argues, any financial

losses stemming from ill-advised or

underpriced new services approved

under the proposed rules would

ultimately be shifted in large measure to

monopoly mailers, thereby creating a

cross-subsidy in contravention of the

intent of Congress. Unless and until

Congress makes fundamental changes in

the Reorganization Act that would grant

the Commission power to police the rate

effects of Postal Service forays into

competitive service—especially

enhanced authority over the revenue

requirement—NAA states that the

proposed rules should not be adopted.

NAA’s comments raise legitimate

concerns regarding the possible impact

of non-compensatory services upon

other postal ratepayers, particularly

monopoly mailers. The Commission

agrees that new services adopted to

meet competitive or other perceived

needs must be offered at compensatory

rates, and cannot be allowed to become

a revenue burden on other categories of

mail. However, the possibility that the

Commission’s proposed rules could

become a vehicle for producing such

results does not compel the conclusion

that they should not be adopted. Rather,

it is a reason for fashioning and

applying the rules in a manner that will

avoid this potential harm. Each of the

proposed rules for introducing new

services includes provisions that will

serve to limit the potential negative

financial impact of its application.

Market tests will be limited in duration

and typically will occur in only a few

areas. Provisional services also will be

limited in duration. Minor classification

changes will be recommended only if

their anticipated impact on overall

postal costs and revenues is minor.

Furthermore, in applying the rules the

Commission will be bound, as always,

by the requirement in § 3622(b)(3) to

recommend rates that recover estimated

costs and contribute to the institutional

costs of the Postal Service.

National Newspaper Association

(NNA) and other commenters raise a

different general concern regarding the

proposed rules: potential problems of

due process associated with the 90- to

120-day procedural schedules

established in the rules. NNA comments

that the speed made necessary by the

foreshortened decisional deadlines

equates to advantage for the Postal

Service as proponent, to exclusion of

potential parties, to expense borne by

parties who do participate, and to harm

of the Commission’s decisional process

by limiting the time in which to develop

an evidentiary record. NNA Comments

at 3–4. The Commission’s Office of the

Consumer Advocate also identifies due

process and evidentiary problems that

could result from the abbreviated

procedural schedules as its primary

concerns regarding the rules. OCA asks

the Commission to state explicitly that

any new rules adopted in this

proceeding will not be used to shift the

burden of proof from the Postal Service

or limit discovery. OCA Comments at 7–

10. Similar concerns regarding

particular proposed rules were voiced

by American Bankers Association,

McGraw-Hill, Newspaper Association of

America, and United Parcel Service.

Procedural schedules of 90 or 120

days admittedly may impose some

extraordinary demands on participants,

but they are by no means impossible to

meet, as the prompt litigation and

deliberations in Docket No. MC96–1

demonstrate. The Reorganization Act

directs the Commission to consider rate

and classification change requests

‘‘promptly,’’ and authorizes it to adopt

rules ‘‘[i]n order to conduct its

proceedings with utmost expedition

consistent with procedural fairness to

the parties.’’ 39 U.S.C. § 3624(a), (b).

The Commission has designed the rules

adopted in this proceeding with

features—such as registration and

expedited notice provisions—to

increase the feasibility of the prescribed

decisional schedules. However, the

Commission wishes to assure all parties

that it will not allow these rules to be

used to alter the normally applicable

standards of proof, curtail legitimate

discovery and hearing practice, or

otherwise deprive interested parties of

their procedural rights. It should also be

borne in mind that in any proceeding

conducted under the new rules, an

affected participant may lodge a motion

for extension of the procedural

schedule, which the Commission will

grant if it finds that an extension is

required to provide due process.

Additionally, in light of the various

concerns expressed by commenters

about the operation of the proposed

rules and their consequences, the

Commission is including a ‘‘sunset’’

provision in each of the four

components of the final rule, which will

cause them to be reviewed or terminated

within a five-year period.

II. Market Tests of Potential New

Services

Applicability of Rule

Several parties filed comments

suggesting changes which would

enlarge applicability of the

Commission’s proposed market test

rule. Both the Postal Service and Time

Warner express support for a rule that
Federal Register / Vol. 61, No. 95 / Wednesday, May 15, 1996 / Rules and Regulations 24449

4The Postal Service is, of course, free to request

expedited consideration under special rules of

practice in connection with any rate change request

it may wish to submit.

5Commenter McGraw-Hill suggests an alternative

mechanism which would provide for preliminary

Commission advice to the Postal Service to modify

unacceptable features of the proposed market test

prior to rendition of a decision. While this proposal

also has merit, the Commission anticipates that its

implementation could significantly extend the 90-

day schedule proposed by the Commission and

adopted in the final rule.

would go beyond the Joint Task Force’s

recommendations by encompassing

market tests of rate changes as well as

market tests of new services. Federal

Express Corporation comments that the

rule should extend to tests of new

international mail services, as well as

domestic services; the National

Newspaper Association suggests that

non-postal services contemplated by the

Postal Service should also be included.

Finally, American Bankers Association

suggests that a Postal Service request for

a permanent change in mail

classification should not be a prerequisite for procedures that would

authorize market tests of potential new

services.

The final rule adopted by the

Commission preserves the terms of

applicability recommended by the Joint

Task Force Report and incorporated in

the proposed market test rule. As the

Commission observed in the Notice of

October 27, tests of pure rate changes in

the usual selective form of market

testing would necessarily raise

questions of fairness and equity under

39 U.S.C. § 3622(b)(1) and of undue

discrimination or preference among

mail users under § 403(c). Comments

provided in response to the October 27

Notice do not provide persuasive

countervailing considerations that

would justify inclusion of rate tests in

the rule.4 Similarly, in the absence of

clear statutory bases for including

market tests of international postal

services and non-postal services to—

which types of service none of the

Commission’s current rules applies—the

Commission declines to extend the final

rule into these areas. The Commission

also declines to broaden the rule beyond

the context contemplated by the Joint

Task Force recommendation, namely, in

connection with the filing of a request

for a permanent change in mail

classification. In the Commission’s

view, a ‘‘free-standing’’ market test rule

would require a different set of

procedures, and possibly additional

forms of evidentiary support by the

Postal Service.

As the preamble states, the final rule

includes a new § 3001.161(b), which

establishes a five-year sunset provision

for the effectiveness of the market test

rule.

Evidentiary Requirements

Several parties commented on the

appropriateness of the evidentiary

requirements applicable to market test

proposals prescribed in proposed

§ 3001.162. The Postal Service

commented generally that the proposed

section requires the preparation and

provision of too much information, and

more particularly that the required

estimate of the number of customers

who will participate in the market test

could be difficult to produce. In

contrast, other commenters—including

American Bankers Association,

Newspaper Association of America, and

National Newspaper Association—

suggested that the Postal Service should

be required to produce additional

information to support proposed market

tests.

The Commission’s final rule

maintains the evidentiary requirements

of the proposed rule, with minor

alterations to accommodate the

concerns of commenters. The

Commission continues to believe that

the general standard declared in

proposed § 3001.162, namely, the

provision of ‘‘such information and data

. . . as are necessary and appropriate

fully to inform the Commission and the

parties of the nature, scope, significance

and impact of the proposed market

test,’’ establishes the appropriate

standard of evidentiary support. In

response to the Postal Service’s

comments, § 3001.162(g) of the final

rule requires the Service to provide an

estimate of the number of customers

who will participate in the test ‘‘to the

extent that such an estimate is

practicable.’’ Also, in order to

implement Federal Express

Corporation’s proposal of a mechanism

that would provide an alternative to

rendering a ‘‘yes or no’’ decision on

proposed market tests, § 3001.162(f) of

the final rule adds a requirement that

the Postal Service state the goals and

objectives of the market test, and

subsection (g) requires the Service to

identify ‘‘those features of the proposed

market test that, [in its opinion,] cannot

be modified without significantly

impairing the value of the test.’’

Rule for Decision

Proposed § 3001.164 provides for the

Commission’s issuance of a ‘‘yes or no’’

decision either in favor of or against the

Postal Service’s proposed market test.

Several commenters—Federal Express

Corporation, the Commission’s Office of

the Consumer Advocate, and United

Parcel Service—question the

consistency of this decisional standard

with the exercise of the Commission’s

best judgment in performing its

statutory responsibilities. As noted

above, Federal Express proposes an

alternative to a ‘‘yes or no’’ decisional

standard: allowing the Postal Service to

designate those elements of its proposed

market test which cannot be modified

without negating its value, and adopting

a decisional standard which would

preclude the Commission only from

modifying those designated elements.

The Commission would thereby retain

the option of making necessary

modifications in less essential elements

of a proposed market test.

Upon consideration, the Commission

believes that the mechanism proposed

by Federal Express is preferable to

restricting the Commission’s decision to

a blanket approval or rejection of a

proposed market test. As noted in the

Notice of October 27, the Commission’s

preference and practice has been to cure

any identified inconsistencies with

statutory policies or factors by

recommending modifications, if they are

feasible. 60 FR 54982. Yet, the

Commission also noted, a

recommendation to modify a market test

in a manner that would depart

significantly from postal management’s

plan ‘‘could jeopardize the timeliness of

the test and seriously impair its

usefulness.’’ Ibid. Because the

mechanism proposed by Federal

Express would better accommodate

these competing considerations,

§ 3001.164 of the final rule provides for

issuance of a decision in accordance

with the policies of the Reorganization

Act, but without ‘‘modification of any

feature of the proposed market test

which the Postal Service has identified

in accordance with § 3001.162(f)’’ as one

that cannot be modified without

significantly impairing the value of the

test.5

Data Collection and Reporting

Requirements

Several parties submitted comments

addressing the data collection and

reporting requirements specified in

proposed § 3001.165, and the exemption

from providing market test data afforded

by proposed § 3001.166(b). The Postal

Service comments that the provision

requiring it to submit all test data to the

Commission no later than 60 days

following the conclusion of the test

could prove to be an obstacle. McGrawHill suggests that the rule should be

modified to require the Postal Service to

report all test data collected. Similarly,

United Parcel Service states that the rule
24450 Federal Register / Vol. 61, No. 95 / Wednesday, May 15, 1996 / Rules and Regulations

should require periodic public reporting

of the test data without exception.

The Commission’s final market test

rule retains the data collection and

reporting provisions of the proposed

rule. The 60-day requirement in

§ 3001.165 is intended to establish a

benchmark for the Service’s production

of market test data in the proceeding to

consider recommendation of the

proposed service as a permanent mail

classification; if the Postal Service

encounters difficulty in meeting this

deadline in a particular case, the

Commission will entertain a motion for

a reasonable extension. The

Commission also continues to believe

that an inflexible rule requiring the

Postal Service to report all market test

data on a periodic basis, without

exception, would be insufficiently

flexible to accommodate the Service’s

legitimate needs, especially with regard

to services tested in a competitive field.

Accordingly, the final rule continues to

require production of all test data only

if the Postal Service elects to pursue

recommendation of the tested new

service as a permanent mail

classification.

Suspension, Continuation or

Termination of Proceeding

Section 3001.166 of the Commission’s

proposed rule provides for Postal

Service motions to suspend the

proceeding to consider its request for a

permanent mail classification change,

and states that the Commission shall

grant the motion ‘‘if, in the

Commission’s opinion, it would be

reasonable under the circumstances to

defer consideration of the request’’ until

data to be produced by the market test

becomes available. In its comments on

this provision, the Postal Service states

that the suspension of its request should

be automatic.

The Commission is concerned that the

Postal Service may have misunderstood

the intent of this provision. It is not

designed to compel the Service to

litigate its proposal while the market

test is being conducted. Rather, it is

designed to preserve the opportunity to

move forward in the consideration of

the requested permanent change in mail

classification if meaningful progress can

be made, for the sake of expedition.

Automatic suspension of the proceeding

would foreclose this option. If no

progress appears likely until

information produced in the market test

is available, the Commission will order

a suspension.

III. Requests for Provisional Service

Changes of Limited Duration

Applicability of Rule

Commenters raised two issues

regarding applicability of a rule for

provisional service changes: (1) whether

such a rule would serve any

independent purpose, given adoption of

a market test rule; and (2) what the

proper scope of a provisional service

change rule should be.

Several commenters—including

American Business Press, the

Newspaper Association of America, the

Commission’s Office of the Consumer

Advocate, and United Parcel Service—

take the position that a rule for

considering provisional service changes

would perform no separately

identifiable function, or that the concept

of a ‘‘provisional service change’’ is too

nebulous to warrant adoption of a rule.

Notwithstanding these comments, the

Commission continues to believe, as the

Joint Task Force concluded, that a

separate rule may be useful for

considering certain types of service

changes for which market testing would

not be appropriate or adequate. While it

would be impossible to foresee the full

spectrum of such changes, the

Commission anticipates that certain

types of systemwide, seasonal, or

special service changes would be more

appropriately considered as provisional

service changes, rather than as the

subjects of market tests. Therefore, the

final rule contains separate provisions

for the expeditious consideration of

provisional service changes.

However, the Commission declines to

expand the rule to include provisional

changes in rates or in the terms of

existing mail classifications, as the

Postal Service and Time Warner suggest

in their comments. The Joint Task Force

recommended that an expedited

procedure for introducing provisional

service changes ‘‘should be available,

under more restrictive terms, for use in

appropriate circumstances.’’ Report at

52. [Emphasis added.] The ‘‘restrictive

terms’’ include a limitation to

‘‘innovations * * * which supplement

existing rates and classifications

without altering any of them, so that

customers could either try the new

service or stick with the existing service

menu, or both.’’ Ibid. American

Business Press, Newspaper Association

of America, and McGraw-Hill express

concern in their comments that the

provisional service change rule could be

used to restructure existing services

under the guise of introducing a ‘‘new’’

service, or otherwise alter pre-existing

service options. In order to address

these concerns, and to implement the

concept envisioned by the Joint Task

Force, the Commission’s final rule

retains the proposed rule’s limitation of

applicability to proposed provisional

services that ‘‘will supplement, but will

not alter, existing mail classifications

and rates for a limited and fixed

duration.’’ § 3001.171(a).

As the preamble states, the final rule

includes a new § 3001.171(b), which

establishes a five-year sunset provision

for the effectiveness of the provisional

service change rule.

Evidentiary Requirements

The Postal Service comments that the

filing requirements contained in

proposed § 3001.172 would increase the

complexity of seeking a provisional

service change, and would be likely to

impair the expedition with which such

changes could be adopted. American

Bankers Association takes the position

that the rule should require the Service

to provide the maximum cost and

revenue information available, in order

to prevent shifting the cost burden of

providing the provisional service to

captive users of First-Class Mail.

The final rule maintains the filing

requirements of the proposed rule. The

Commission continues to believe that

requiring the Service to provide a

description of the salient features of a

proposed provisional service change,

together with an estimate of the effects

of implementing it and all other

available information responsive to the

requirements in current § 3001.64,

imposes a reasonable standard of

evidence. If the Postal Service

experiences difficulty in developing the

required information, it may file a

motion for waiver, or an explanation of

unavailability as provided in

§ 3001.172(b). On the other hand, if a

participant believes that critical

information has not been produced, it

may seek to compel its production

through discovery and motions practice.

As with the market test rule, in order

to implement Federal Express

Corporation’s proposal of a mechanism

that would provide an alternative to

rendering a ‘‘yes or no’’ decision on

proposed provisional service changes,

§ 3001.172(a)(2) of the final rule adds a

requirement that the Postal Service state

its goals and objectives in introducing

the provisional service, and subsection

(a)(3) requires the Service to identify

‘‘those features of the proposed

provisional service that, [in its opinion,]

cannot be modified without

significantly reducing the benefits of

introducing the proposed service.’’
Federal Register / Vol. 61, No. 95 / Wednesday, May 15, 1996 / Rules and Regulations 24451

6 McGraw-Hill once again proposes an alternative

providing for preliminary Commission advice to the

Postal Service to modify unacceptable features of

the proposal prior to a decision. The Commission

declines to adopt this mechanism on the same bases

cited with respect to the market test rule.

Rule for Decision

Proposed § 3001.174 provides for the

Commission’s issuance of a ‘‘yes or no’’

decision either in favor of or against the

Postal Service’s proposed provisional

service change. Several commenters—

Federal Express Corporation, the

Commission’s Office of the Consumer

Advocate, and United Parcel Service—

challenge this mode of decision, as they

did with respect to market tests. Once

again, Federal Express proposes an

alternative that would allow the Postal

Service to designate those elements of

its proposed provisional service change

which cannot be modified without

negating its value, together with a

decisional standard which would

preclude the Commission only from

modifying those designated elements.

Because the same decisional

considerations are mutually applicable

to market tests and provisional service

changes, the Commission has decided to

modify proposed § 3001.174 to provide

for issuance of a decision in accordance

with the policies of the Reorganization

Act, but without ‘‘modification of any

feature of the proposed service which

the Postal Service has identified in

accordance with § 3001.172(a)(2).’’6

Data Collection and Reporting

Requirements

Section 3001.175 of the proposed rule

directs the Postal Service to collect and

report data pertaining to a

recommended provisional service

during the period in which it is in

effect. The section would allow the

Service to satisfy these requirements

either through its regular data collection

and reporting systems, in combination

with the Service’s regularly filed

periodic reports under 39 CFR

§ 3001.102, or by conducting and

reporting the results of special studies

on a corresponding schedule ‘‘to the

extent reasonably practicable.’’

In its comments, the Postal Service

‘‘strongly objects’’ to the requirements

in proposed § 3001.175. Comments at

19. The Service asserts that it is ‘‘neither

necessary nor practical’’ to require it to

modify its regular data reporting

systems to include a provisional service,

and that it is ‘‘unreasonable’’ to expect

it to conduct special studies on a

quarterly basis. Ibid. In the Service’s

view, data pertaining to a provisional

service will not be germane until a

record is developed for the purpose of

determining whether to recommend the

service as a permanent mail

classification, and ‘‘[d]ata issues will

receive a full airing then.’’ Ibid.

The Postal Service’s resistance to

periodic data collection and reporting

for recommended provisional services

is, quite frankly, difficult to fathom.

Under § 3001.171(a) of the final rule, a

provisional service may be

recommended for a duration of up to

two years. The Postal Service collects

and publicly reports cost and revenue

data for all services it offers on at least

an annual basis; there is no apparent

justification for exempting a

recommended provisional service from

this practice. Proposed § 3001.175 does

not require the Service to perform

quarterly special studies for provisional

services; it only cites § 3001.102

reporting requirements as a standard,

and directs the Service to observe them

‘‘to the extent reasonably practicable.’’

The final rule retains this reasonable

standard of data collection and

reporting.

IV. Expedited Consideration of

Requests for Minor Mail Classification

Changes

Applicability of Rule

Proposed § 3001.69 states that a

requested mail classification change

may be considered to be ‘‘minor in

character,’’ and therefore eligible for

expedited consideration, if it would not

involve a change in any existing rate or

fee and: (a) involves only changes in

eligibility standards or requirements

applicable to mail classes or services; or

(b) would only affect categories of

service with low aggregate costs and

revenues. Several commenters suggested

that the section’s standard of

applicability should be clarified, or

replaced with an alternative definition

of ‘‘minor in character.’’

The Postal Service comments that the

proposed rule’s applicability criteria

require further explanation; Direct

Marketing Association regards the

Commission’s standards as an

improvement over those in the Service’s

proposed rule, but observes that

application in specific instances will

present difficulties. American Bankers

Association, Newspaper Association of

America, National Newspaper

Association, and McGraw-Hill challenge

the proposed rule’s definition of

eligibility changes as ‘‘minor,’’ drawing

on experience in recent dockets such as

MC95–1 to illustrate that putative

eligibility changes may produce major

impacts on users of the affected mail

classification. Other commenters

question the appropriateness of the

‘‘low costs and revenues’’ standard.

OCA comments that the standard is

ambiguous, and may be over-inclusive

in light of past mail classification

controversies that arguably involved

low costs and revenues but required

more extensive scrutiny. United Parcel

Service comments that imposition of the

‘‘low costs and revenues’’ standard

would tend to reduce scrutiny of

classification changes in almost all the

competitive subclasses. Advertising

Mail Marketing Association comments

that neither of the proposed rule’s

standards will serve to include minor

classification changes and exclude

major ones, and proposes an alternative

two-part test that would treat a

proposed change as ‘‘minor’’ if it:

(a) Does not materially alter the conditions

of eligibility for the entry of mail in a

particular subclass, or for a particular rate

element or work sharing discount; and (b)

does not materially increase or decrease the

estimated or projected institutional cost

contribution of the affected subclass.

AMMA Comments at 5–6.

Upon consideration of the parties’

comments, the Commission agrees that

the definition of ‘‘minor’’ classification

changes in proposed § 3001.69 should

be amended. Therefore, the Commission

has re-drafted the applicability

provisions to include only those

proposed mail classification changes

that are likely to be moderate in their

impact both on mailers and on the

postal system as a whole. The substitute

retains the introductory clause

precluding any change in existing rates

or fees, and models two additional

clauses on AMMA’s suggested language,

with one alteration: the clause

concerning changes in conditions of

eligibility has been modified to preclude

only requests for more restrictive

eligibility terms. Thus, proposals to

make existing mail classifications more

inclusive could be considered under the

minor classification change provisions.

As the preamble states, the final rule

includes a new § 3001.69(b), which

establishes a five-year sunset provision

for the effectiveness of the minor

classification change rule.

Expedition of Procedural Schedule—

Expedited Notice

Commenter McGraw-Hill suggests

that the expedited procedures specified

in proposed § 3001.69b should be

supplemented to include registration

and expedited notice provisions similar

to those contained in the proposed

market test rule [§ 3001.163(b)-(d)] and

proposed rule for provisional service

changes [§ 3001.173(b)-(d)]. McGrawHill comments that the inclusion of

such conforming provisions ‘‘are
24452 Federal Register / Vol. 61, No. 95 / Wednesday, May 15, 1996 / Rules and Regulations

justified by the short timeframes

contemplated for the proceedings in

question.’’ McGraw-Hill Comments at 5.

The Commission agrees that inclusion

of such provisions in the minor

classification change rule is justified,

and would be beneficial. Expedited

notice of the Postal Service’s filing of a

request can be expected to enable

interested parties to intervene, and

initiate discovery if they so desire,

earlier in the proceeding. Consequently,

the final rule has been amended to add

three new subsections to proposed

§ 3001.69b. New subsection (b) provides

for registration with the Secretary of the

Commission by persons who are

interested in participating in minor

classification change proceedings. These

registrants will automatically become

parties to each such proceeding, but

they may withdraw at any time. New

subsection (c) requires service of the

Postal Service’s complete filing by hand

delivery to registrants with addresses

within the Washington metropolitan

area, and by Priority Mail to all other

registrants. New subsection (d) requires

the Postal Service to give notice by

First-Class Mail of the filing of its

request to all participants in the most

recent omnibus rate proceeding. Service

by Priority Mail and First-Class Mail

have been substituted for Express Mail,

which is required in the market test and

provisional service change rules, in

view of the potentially longer

procedural schedule available in minor

classification change proceedings, and

to reduce the resulting burden on the

Postal Service. Also, in order to enable

the Service to identify the last day for

parties’ intervention in the notice

required by new subsection (d),

§ 3001.69b(e) of the final rule has been

modified to provide that the

Commission’s notice of proceeding

‘‘shall afford all interested parties 26

days after filing of the Postal Service’s

request within which to intervene[.]’’

V. Multi-Year Test Periods for Proposed

New Services

Applicability of Rule.

Several commenters question the

terms under which proposed § 3001.181

would allow the Postal Service to use

multi-year test periods for proposed

new services. Newspaper Association of

America, United Parcel Service, and

McGraw-Hill take the position that the

rule should not extend to permit test

periods as long as five years, in light of

the Postal Service’s demonstrated

limitations in producing forecasts in

prior Commission proceedings. In

contrast, the Postal Service comments

that a five-year period may not be

sufficient for some proposed services,

and that the appropriate length of a test

period should be determined on a caseby-case basis.

The final rule retains the declaration

of a Commission policy in favor of test

periods of up to five fiscal years. The

Joint Task Force Report recommended

the adoption of ‘‘rules providing for a

multi-year break-even period of at least

four or five years[,]’’ Report at 51, and

the Commission accordingly has used

five years as a policy benchmark. The

Commission is well aware that Postal

Service projections have usually been

limited to two- or three-year horizons in

postal rate and classification

proceedings. However, the Commission

is prepared to provide the Service with

the opportunity to submit longer-range

forecasts, and to use those projections if

they prove to be credible. Furthermore,

the Postal Service is free in any given

proceeding to ask the Commission to

expand its policy declaration, if it can

furnish even longer-range projections

that it believes to be reliable.

The Postal Service, Advertising Mail

Marketing Association, and Direct

Marketing Association oppose another

portion of the Commission’s policy

declaration in proposed § 3001.181,

which refers to ‘‘convincing substantial

evidence in support of the test period

proposed.’’ These commenters challenge

the quoted language on the ground that

it would subject the Postal Service’s

evidence in support of a multi-year test

period to a higher standard of proof than

the ‘‘substantial evidence’’ standard of

evidentiary support commonly required

of administrative decisions. The Postal

Service suggests that this language ‘‘be

eliminated as unjustified and

unnecessary.’’ Postal Service Comments

at 25.

The proposed rule’s use of the phrase

‘‘convincing substantial evidence’’ in

the policy declaration was not intended

to establish an extraordinary evidentiary

standard for application to the Postal

Service’s test year projections; it was

only intended to declare a policy in

favor of departure from the normallyapplicable test year rule when the

Service’s evidence persuades the

Commission that such a departure is

justified. In order to remove any

ambiguity on this point, the final rule

deletes the word ‘‘convincing.’’

As the preamble states, the final rule

includes a new § 3001.181(b), which

establishes a five-year sunset provision

for the effectiveness of the multi-year

test period rule.

Filing of Evidence in Support of Formal

Request.

In its comments, the Postal Service

opposes the filing requirements in

proposed § 3001.182 (b)(2) and (b)(3) of

the proposed rule, which direct the

Service to produce Return on

Investment projections and all other

financial analyses prepared in

connection with determining the cost

and revenue impact of the proposed

new service, and any other analyses by

the Service that bear on the overall

effects of introducing the new service

during the requested test period. The

Service claims these requirements are

unnecessary, would introduce needless

complexity and confusion into the

proceeding, and call for material that is

‘‘likely to include pre-decisional

material and/or material of commercial

sensitivity that would not ordinarily be

disclosed in Commission proceedings.’’

Postal Service Comments at 26. Time

Warner also comments on the

‘‘excessive data and documentation

requirements’’ of the proposed rule,

Comments at 4, and urges the

Commission to ‘‘accommodate its

information and documentation

requirements to the inevitability that

new services will be supported by

scarcer, more attenuated data than

established ones. . . .’’ Time Warner

Comments at 5.

The Commission is well aware of the

problems of information deficiency that

can be associated with new services,

and does not intend to apply unrealistic

standards of proof to such services.

However, the Commission is also aware

from experience in prior proceedings

that financial analyses and other

information of the types responsive to

proposed § 3001.182(b) (2) and (3) are

likely to underlie the Postal Service’s

cost and revenue estimates for a

proposed new service, or will at least

bear significantly on the credibility and

accuracy of those estimates. The

relevance and probative value of these

analyses are likely to be intensified

when estimates are projected as much as

five years into the future. Consequently,

the final rule retains these filing

requirements, to put the Postal Service

on notice that all relevant supporting

analyses will be scrutinized in the

proceeding. If the Postal Service

believes that special considerations of

privilege and resulting harm should

exempt certain responsive information

in any given case, it may file a motion

for waiver explaining why the

requirement should not apply.
Federal Register / Vol. 61, No. 95 / Wednesday, May 15, 1996 / Rules and Regulations 24453

VI. 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 mail

classification change 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.

2. Sections 3001.69 through 3001.69c

are added to Subpart C to read as

follows:

§ 3001.69 Expedited minor classification

cases—applicability.

(a) This section and §§ 3001.69a

through 3001.69c apply in cases where

the Postal Service requests a

recommended decision pursuant to

section 3623 and seeks expedited

review on the ground that the requested

change in mail classification is minor in

character. The requirements and

procedures specified in these sections

apply exclusively to the Commission’s

consideration of requested mail

classification changes which the Postal

Service denominates as, and the

Commission finds to be, minor in

character. A requested classification

change may be considered to be minor

in character if it:

(1) Would not involve a change in any

existing rate or fee;

(2) Would not impose any restriction

in addition to pre-existing conditions of

eligibility for the entry of mail in an

existing subclass or category of service,

or for an existing rate element or work

sharing discount; and

(3) Would not significantly increase or

decrease the estimated institutional cost

contribution of the affected subclass or

category of service.

(b) This section and §§ 3001.69a

through 69c are effective May 15, 1996

through May 15, 2001.

§ 3001.69a Expedited minor classification

cases—filing of formal request and

prepared direct evidence.

(a) Whenever the Postal Service

determines to request that the

Commission submit a decision

recommending a mail classification

change, and to seek expedited review on

the ground that the requested change is

minor in character, it shall file a request

for a change in mail classification

pursuant to section 3623 that comports

with the requirements of this section

and of subpart C of this part. Each such

formal request shall include the

following particular information:

(1) A description of the proposed

classification change or changes,

including proposed changes in the text

of the Domestic Mail Classification

Schedule and any pertinent rate

schedules;

(2) A thorough explanation of the

grounds on which the Postal Service

submits that the requested change in

mail classification is minor in character;

and

(3) An estimate, prepared in the

greatest level of detail practicable, of the

overall impact of the requested change

in mail classification on postal costs and

revenues, mail users, and competitors of

the Postal Service.

(b) If the Postal Service believes that

data required to be filed under § 3001.64

are unavailable, it shall explain their

unavailability, as required by

§ 3001.64(a)(2) (i), (ii), and (iv). If the

Postal Service believes that any of the

data or other information required to be

filed under § 3001.64 should not be

required in light of the minor character

of the requested change in mail

classification, it shall move for a waiver

of that requirement, stating with

particularity the reasons why the

character of the request and its

circumstances justify a waiver of the

requirement. A satisfactory explanation

of the unavailability of information

required under § 3001.64, or of why it

should not be required to support a

particular request, will be grounds for

excluding from the proceeding a

contention that the absence of the

information should form a basis for

rejection of the request, unless the party

desiring to make such contention:

(1) Demonstrates that, having regard

to all the facts and circumstances of the

case, it was clearly unreasonable for the

Postal Service to propose the change in

question without having first secured

the information and submitted it in

accordance with § 3001.64; or

(2) Demonstrates other compelling

and exceptional circumstances requiring

that the absence of the information in

question be treated as bearing on the

merits of the proposal.

§ 3001.69b Expedited minor classification

cases—expedition of procedural schedule.

(a) The purpose of this section is to

provide a schedule for expediting

proceedings in which the Postal Service

requests that the Commission

recommend a change in mail

classification and expedite

consideration of that request on the

ground that the change is minor in

character.

(b) Persons who are interested in

participating in proceedings to consider

Postal Service requests for minor

changes in mail classification 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 registrants. Persons whose

names appear on this list will

automatically become parties to each

proceeding in which the Postal Service

requests a minor mail classification

change pursuant to §§ 3001.69 through

3001.69c. Parties may withdraw from

the register or a particular case by filing

a notice with the Secretary of the

Commission.

(c) When the Postal Service files a

request under the provisions of

§§ 3001.69 through 3001.69c, it shall on

that same day effect service by hand

delivery of the complete filing to each

person registered pursuant to paragraph

(b) of this section who maintains an

address for service within the

Washington metropolitan area and serve

the complete filing by Priority Mail

service on all other registrants. Each

registrant is responsible for insuring that

his or her address remains current.

(d) When the Postal Service files a

request under the provisions of

§§ 3001.69 through 3001.69c, it shall on

that same day send by First-Class Mail

to all participants in the most recent

omnibus rate case a notice which briefly
24454 Federal Register / Vol. 61, No. 95 / Wednesday, May 15, 1996 / Rules and Regulations

describes its proposal. This notice shall

indicate on its first page that it is a

notice of a request for a minor change

in mail classification to be considered

under §§ 3001.69 through 3001.69c, and

identify the last day for filing a notice

of intervention with the Commission.

(e) Within 5 days after receipt of a

Postal Service request invoking the

operation of §§ 3001.69 through

3001.69c, the Commission shall issue a

notice of proceeding and provide for

intervention by interested parties

pursuant to § 3001.20. The notice of

proceeding shall state that the Postal

Service has denominated the mail

classification change it requests a minor

change, and has requested expedited

consideration pursuant to §§ 3001.69

through 3001.69c. The notice shall

further state the grounds on which the

Postal Service submits that the

requested change in mail classification

is minor in character, and shall afford

all interested parties 26 days after filing

of the Postal Service’s request within

which to intervene, submit responses to

the Postal Service’s request for

consideration of its proposed mail

classification change under the terms of

§§ 3001.69 through 3001.69c, and

request a hearing.

(f) Within 28 days after publication of

the notice of proceeding pursuant to

paragraph (e) of this section, the

Commission shall decide whether to

consider the request of the Postal

Service as a minor classification change

request under §§ 3001.69 through

3001.69c, and shall issue an order in the

proceeding incorporating that ruling.

The Commission shall order a request to

be considered under §§ 3001.69 through

3001.69c if it finds that:

(1) The requested classification

change is minor in character, and

(2) The effects of the requested change

are likely to be appropriately limited in

scope and overall impact.

(g) If the Commission determines that

the request of the Postal Service is not

appropriate for consideration as a minor

classification change request, no further

procedures under §§ 3001.69 through

3001.69c shall be ordered, and the

request will be considered in

accordance with other appropriate

provisions of Subpart C of this part.

(h) If the Commission determines that

the Postal Service request is appropriate

for consideration under §§ 3001.69

through 3001.69c, those respondents

who request a hearing shall be directed

to state with specificity within 14 days

after publication of the notice the issues

of material fact that require a hearing for

resolution. Respondents shall also

identify 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.

(i) The Commission will hold

hearings on a Postal Service request

which is considered under §§ 3001.69

through 3001.69c when it determines

that there are genuine issues of material

fact to be resolved, and that a hearing

is needed to resolve those issues.

Hearings on the Postal Service request

will commence within 21 days after

issuance of the Commission order

pursuant to paragraph (f) of this section.

Testimony responsive to the Postal

Service request will be due 14 days after

the conclusion of hearings on the Postal

Service request.

§ 3001.69c Expedited minor classification

cases—time limits.

The Commission will treat cases to

which §§ 3001.69 through 3001.69c

apply as subject to the maximum

expedition consistent with procedural

fairness. The schedule for adoption of a

recommended decision will therefore be

established, in each such case, to allow

for issuance of such decision not more

than 90 days after the filing of the

request of the Postal Service if no

hearing is held, and not more than 120

days after the filing of the request if a

hearing is scheduled.

3. Sections 3001.161 through

3001.166 are added as Subpart I to read

as follows:

Subpart I—Rules Applicable to Requests for

Market Tests of Proposed Mail

Classification Changes

Sec.

3001.161 Applicability.

3001.162 Filing of market test proposal and

supporting direct evidence.

3001.163 Procedures—expedition of public

notice and procedural schedule.

3001.164 Rule for decision.

3001.165 Data collection and reporting

requirements.

3001.166 Suspension, continuation or

termination of proceeding.

Subpart I—Rules Applicable to

Requests for Market Tests of Proposed

Classification Changes

§ 3001.161 Applicability.

(a) This section and §§ 3001.162

through 3001.166 apply in cases in

which the Postal Service requests a

recommended decision pursuant to

section 3623 preceded by testing in the

market in order to develop information

necessary to support a permanent

change. The requirements and

procedures specified in these sections

apply exclusively to the Commission’s

determination to recommend in favor of

or against a market test proposed by the

Postal Service, and do not supersede

any other rules applicable to the Postal

Service’s request for recommendation of

a permanent change in mail

classification. In administering this

subpart, it shall be the policy of the

Commission to recommend market tests

that are reasonably calculated to

produce information needed to support

a permanent change in mail

classification, and that are reasonably

limited in scope, scale, duration, and

potential adverse impact. Except in

extraordinary circumstances and for

good cause shown, the Commission

shall not recommend market tests of

more than one year in duration;

however, this limitation is not intended

to bar the Postal Service from

conducting more than one market test in

support of a potential permanent change

in mail classification in appropriate

circumstances.

(b) This section and §§ 3001.162

through 3001.166 are effective May 15,

1996 through May 15, 2001.

§ 3001.162 Filing of market test proposal

and supporting direct evidence.

Whenever the Postal Service

determines to request that the

Commission submit a recommended

decision on a change in mail

classification preceded by testing in the

market, the Postal Service shall file with

the Commission, in addition to its

request for a permanent change in mail

classification pursuant to section 3623,

a request for a recommended decision in

favor of its proposed market test of the

requested change in mail classification.

Each formal request filed under this

subpart shall include such information

and data and such statements of reasons

and bases as are necessary and

appropriate fully to inform the

Commission and the parties of the

nature, scope, significance and impact

of the proposed market test, and to show

that it is in the public interest and in

accordance with the policies of the Act

and the applicable criteria of the Act.

Each formal request shall also include

the following particular information:

(a) A description of the services to be

provided in the market test, and the

relationship between the services to be

provided and the permanent change or

changes in the mail classification

schedule requested by the Postal

Service;

(b) A statement of each rate or fee to

be charged for each service to be

provided during the market test,

together with all information relied

upon to establish consistency of those

rates and fees with the factors specified

in section 3622(b);
Federal Register / Vol. 61, No. 95 / Wednesday, May 15, 1996 / Rules and Regulations 24455

(c) A description of the number and

extent of the service areas in which the

market test will be conducted, including

the number and type of postal facilities

which will be used;

(d) A statement of the planned

duration of the market test;

(e) Proposed Domestic Mail

Classification Schedule provisions

which incorporate the information

required in paragraphs (a) through (d) of

this section;

(f) A statement of the goals and

objectives of the proposed market test,

supported by quantitative projections of

anticipated results to the extent

practicable.

(g) A statement of those features of the

proposed market test that, in the

opinion of the Postal Service, cannot be

modified without significantly

impairing the value of the test;

(h) An estimate of the number of

customers who will participate in the

market test to the extent that such an

estimate is practicable, together with a

description of the means by which the

Postal Service plans to provide equal

access to all potential users in the test

market service areas; and

(i) A plan for testing the proposed

change or changes in the market,

including a plan for gathering the data

needed to support a permanent change

in mail classification and for reporting

the test data to the Commission. If

periodic reporting of the test data would

be harmful to the purposes of the test,

such as by revealing information that

might encourage competitors or mailers

to take actions that would affect the test

results, the plan may provide for

presentation of the test data as part of

the subsequent filing of data supporting

a permanent mail classification change.

§ 3001.163 Procedures—expedition of

public notice and procedural schedule.

(a) The purpose of this section is to

provide a schedule for expediting

proceedings in which the Postal Service

proposes to conduct a market test of a

requested change in mail classification

it has submitted to the Commission

pursuant to section 3623.

(b) Persons who are interested in

participating in proceedings to consider

Postal Service requests to conduct a

market test 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

registrants. Persons whose names

appear on this list will automatically

become parties to each proceeding in

which the Postal Service requests to

conduct a market test pursuant to this

subpart. Other interested persons may

intervene pursuant to § 3001.20 within

28 days after the filing of a formal

request made under the provisions of

this subpart. Parties may withdraw from

the register or a particular case by filing

a notice with the Secretary of the

Commission.

(c) When the Postal Service files a

request under the provisions of this

subpart, it shall on that same day effect

service by hand delivery of the complete

filing to each person registered pursuant

to paragraph (b) 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.

(d) When the Postal Service files a

request under the provisions of this

subpart, it shall on that same day send

by Express Mail to all participants in the

most recent omnibus rate case a notice

which briefly describes its proposal.

This notice shall indicate on its first

page that it is a notice of a Market Test

Request to be considered under

§§ 3001.161 through 3001.166, and

identify the last day for filing a notice

of intervention with the Commission.

(e) Within 5 days after receipt of a

Postal Service request under the

provisions of this subpart, the

Commission shall issue a notice of

proceeding and provide for intervention

by interested parties pursuant to

§ 3001.20. In the event that a party

wishes to dispute a genuine issue of

material fact to be resolved in the

consideration of the Postal Service’s

request, that party shall file with the

Commission a request for a hearing

within the time allowed in the notice of

proceeding. The request for a 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. The Commission will hold

hearings on a Postal Service request

made pursuant to this subpart when it

determines that there is a genuine issue

of material fact to be resolved, and that

a hearing is needed to resolve that issue.

§ 3001.164 Rule for decision.

The Commission will issue a decision

on the Postal Service’s proposed market

test in accordance with the policies of

the Postal Reorganization Act, but will

not recommend modification of any

feature of the proposed market test

which the Postal Service has identified

in accordance with § 3001.162(g). The

purpose of this subpart is to allow for

consideration of proposed market tests

within 90 days, consistent with the

procedural due process rights of

interested persons.

§ 3001.165 Data collection and reporting

requirements.

In any case in which the Commission

has issued a recommended decision in

favor of a market test requested by the

Postal Service, and the Board of

Governors has put the market test

recommended by the Commission into

effect, the Postal Service shall gather

test data and report them to the

Commission in accordance with the

plan submitted pursuant to §

3001.162(h). If the Postal Service’s plan

for reporting test data does not provide

for periodic reporting during the

conduct of the test, the Postal Service

shall submit all test data to the

Commission no later than 60 days

following the conclusion of the test.

§ 3001.166 Suspension, continuation or

termination of proceeding.

(a) In any case in which the

Commission has issued a recommended

decision in favor of a market test

requested by the Postal Service, and the

Board of Governors has put the market

test recommended by the Commission

into effect, the Postal Service may move

for suspension of the proceeding in

which its request for a permanent

change in mail classification is to be

considered. The Commission shall grant

the Postal Service’s motion for

suspension if, in the Commission’s

opinion, it would be reasonable under

the circumstances to defer consideration

of the request until the information to be

produced in connection with the market

test becomes available.

(b) At any time during the pendency

of a market test recommended by the

Commission pursuant to this subpart, or

following the completion of such a

market test, the Postal Service may

move to revise or withdraw its request

for a permanent change in mail

classification. If the Postal Service

moves to revise its request, it shall file

with the Commission all data necessary

to support its amended request. If the

Postal Service moves to withdraw its

request, it shall explain the

circumstances leading to its motion, but

need not produce the test data that

would otherwise be submitted pursuant

to § 3001.165.

4. Sections 3001.171 through

3001.176 are added as Subpart J, to read

as follows:
24456 Federal Register / Vol. 61, No. 95 / Wednesday, May 15, 1996 / Rules and Regulations

Subpart J—Rules Applicable to Requests

for Provisional Service Changes of Limited

Duration

Sec.

3001.171 Applicability.

3001.172 Filing of formal request and

prepared direct evidence.

3001.173 Procedures-expedition of public

notice and procedural schedule.

3001.174 Rule for decision.

3001.175 Data collection and reporting

requirements.

3001.176 Continuation or termination of

provisional service.

Subpart J—Rules Applicable to

Requests for Provisional Service

Changes of Limited Duration

§ 3001.171 Applicability.

(a) This section and §§ 3001.172

through 3001.176 apply in cases in

which the Postal Service requests that

the Commission recommend the

establishment of a provisional service

which will supplement, but will not

alter, existing mail classifications and

rates for a limited and fixed duration.

The requirements and procedures

specified in these sections apply

exclusively to the Commission’s

determination to recommend in favor of

or against a provisional service

proposed by the Postal Service, and do

not supersede the rules applicable to

requests for permanent changes in rates,

fees, mail classifications, and in the

nature of postal services. In

administering this subpart, it shall be

the policy of the Commission to

recommend the introduction of

provisional services that enhance the

range of postal services available to the

public, without producing a material

adverse effect overall on postal revenues

or costs, and without causing

unnecessary or unreasonable harm to

competitors of the Postal Service.

Except in extraordinary circumstances

and for good cause shown, the

Commission shall not recommend

provisional services of more than two

years in duration; however, the

Commission may grant a request to

extend a provisional service for an

additional year if a Postal Service

request to establish the provisional

service as a permanent mail

classification is pending before the

Commission.

(b) This section and §§ 3001.172

through 3001.176 are effective May 15,

1996 through May 15, 2001.

§ 3001.172 Filing of formal request and

prepared direct evidence.

(a) Whenever the Postal Service

determines to request that the

Commission submit a decision

recommending the establishment of a

provisional service of limited and fixed

duration, it shall file a request for a

change in mail classification pursuant to

section 3623 that comports with the

requirements of this subpart and of

subpart C of this part. Each formal

request shall include the following

particular information:

(1) A description of the proposed

classification, including proposed

Domestic Mail Classification Schedule

language and rate schedules;

(2) A statement of the goals and

objectives of introducing the proposed

provisional service, supported by

quantitative projections of anticipated

results to the extent practicable.

(3) A statement of those features of the

proposed provisional service that, in the

opinion of the Postal Service, cannot be

modified without significantly reducing

the benefits of introducing the proposed

service;

(4) An explanation and complete

documentation of the development of

the rates proposed for the provisional

service;

(5) A termination date on which the

proposed provisional service will be

discontinued;

(6) An estimate of the effect of

implementing the proposed provisional

service on overall Postal Service costs

and revenues during the period in

which it is in effect; and

(7) A plan for meeting the data

collection and reporting requirements

specified in § 3001.175.

(b) If the Postal Service believes that

data required to be filed under § 3001.64

are unavailable, it shall explain their

unavailability, as required by § 3001.64

(a)(2)(i), (ii), and (iv). In particular, if the

provisional character of the request

bears on the unavailability of the data in

question, the Postal Service shall

explain in detail the nexus between

these circumstances. A satisfactory

explanation of the unavailability of data

will be grounds for excluding from the

proceeding a contention that the

absence of the data should form a basis

for rejection of the request, unless the

party desiring to make such contention:

(1) Demonstrates that, having regard

to all the facts and circumstances of the

case, it was clearly unreasonable for the

Postal Service to propose the change in

question without having first secured

the data which are unavailable, or

(2) Demonstrates other compelling

circumstances requiring that the

absence of the data in question be

treated as bearing on the merits of the

proposal.

§ 3001.173 Procedures—expedition of

public notice and procedural schedule.

(a) The purpose of this section is to

provide a schedule for expediting

proceedings in which the Postal Service

requests that the Commission

recommend the establishment of a

provisional service which will

supplement, but will not alter, existing

mail classifications and rates for a

limited and fixed duration.

(b) Persons who are interested in

participating in proceedings to consider

Postal Service requests to establish a

provisional service 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

registrants. Persons whose names

appear on this list will automatically

become parties to each proceeding in

which the Postal Service requests

establishment of a provisional service

pursuant to this subpart. Other

interested persons may intervene

pursuant to § 3001.20 within 28 days

after the filing of a formal request made

under the provisions of this subpart.

Parties may withdraw from the register

or a particular case by filing a notice

with the Secretary of the Commission.

(c) When the Postal Service files a

request under the provisions of this

subpart, it shall on that same day effect

service by hand delivery of the complete

filing to each person registered pursuant

to paragraph (b) of this section 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.

(d) When the Postal Service files a

request under the provisions of this

subpart, 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 a Request for Establishment of

a Provisional Service to be considered

under §§ 3001.171 through 3001.176,

and identify the last day for filing a

notice of intervention with the

Commission.

(e) Within 5 days after receipt of a

Postal Service request under the

provisions of this subpart, the

Commission shall issue a notice of

proceeding and provide for intervention

by interested parties pursuant to

§ 3001.20. In the event that a party

wishes to dispute a genuine issue of

material fact to be resolved in the

consideration of the Postal Service’s
Federal Register / Vol. 61, No. 95 / Wednesday, May 15, 1996 / Rules and Regulations 24457

request, that party shall file with the

Commission a request for a hearing

within the time allowed in the notice of

proceeding. The request for a 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. The Commission will hold

hearings on a Postal Service request

made pursuant to this subpart when it

determines that there is a genuine issue

of material fact to be resolved, and that

a hearing is needed to resolve that issue.

§ 3001.174 Rule for decision.

The Commission will issue a decision

on the Postal Service’s proposed

provisional service in accordance with

the policies of the Postal Reorganization

Act, but will not recommend

modification of any feature of the

proposed service which the Postal

Service has identified in accordance

with § 3001.172(a)(3). The purpose of

this subpart is to allow for consideration

of proposed provisional services within

90 days, consistent with the procedural

due process rights of interested persons.

§ 3001.175 Data collection and reporting

requirements.

In any case in which the Commission

has issued a recommended decision in

favor of a provisional service of limited

duration requested by the Postal

Service, and the Board of Governors has

put the provisional service

recommended by the Commission into

effect, the Postal Service shall collect

and report data pertaining to the

provisional service during the period in

which it is in effect in accordance with

the periodic reporting requirements

specified in § 3001.102. If the Postal

Service’s regular data reporting systems

are not revised to include the

provisional service during the period of

its effectiveness, the Postal Service shall

perform, and provide to the Commission

on a schedule corresponding to

§ 3001.102 reports, special studies to

provide equivalent information to the

extent reasonably practicable.

§ 3001.176 Continuation or termination of

provisional service.

At any time during the period in

which a provisional service

recommended by the Commission and

implemented by the Board of Governors

is in effect, the Postal Service may

submit a formal request that the

provisional service be terminated, or

that it be established, either as originally

recommended by the Commission or in

modified form, as a permanent mail

classification. Following the conclusion

of the period in which the provisional

service was effective, the Postal Service

may submit a request to establish the

service as a mail classification under

any applicable subpart of the

Commission’s rules.

5. Sections 3001.181 and 3001.182 are

added as Subpart K, to read as follows:

Subpart K—Rules for Use of Multi-Year Test

Periods

Sec.

3001.181 Use of multi-year test period for

proposed new services.

3001.182 Filing of formal request and

prepared direct evidence.

Subpart K—Rules for Use of Multi-Year

Test Periods

§ 3001.181 Use of multi-year test period for

proposed new services.

(a) The rules in §§ 3001.181 and

3001.182 apply to Postal Service

requests pursuant to section 3623 for the

establishment of a new postal service,

with attendant rates, which in the

estimation of the Postal Service cannot

generate sufficient volumes and

revenues to recover all costs associated

with the new service in the first full

fiscal year of its operation. In

administering these rules, it shall be the

Commission’s policy to adopt test

periods of up to 5 fiscal years for the

purpose of determining breakeven for

newly introduced postal services where

the Postal Service has presented

substantial evidence in support of the

test period proposed.

(b) This section and § 3001.182 are

effective May 15, 1996 through May 15,

2001.

§ 3001.182 Filing of formal request and

prepared direct evidence.

In filing a request for establishment of

a new postal service pursuant to section

3623, the Postal Service may request

that its proposal be considered for a test

period of longer duration than the test

period prescribed in § 3001.54(f)(2).

Each such request shall be supported by

the following information:

(a) The testimony of a witness on

behalf of the Postal Service, who shall

provide:

(1) A complete definition of the multiyear test period requested for the

proposed new service;

(2) A detailed explanation of the

Postal Service’s preference of a multiyear test period, including the bases of

the Service’s determination that the test

period prescribed in § 3001.54(f)(2)

would be inappropriate; and

(3) A complete description of the

Postal Service’s plan for achieving an

appropriate contribution to institutional

costs from the new service by the end

of the requested test period.

(b) Complete documentary support

for, and detail underlying, the test

period requested by the Postal Service,

including:

(1) Estimated costs, revenues, and

volumes of the proposed new service for

the entire requested test period;

(2) Return on Investment projections

and all other financial analyses

prepared in connection with

determining the cost and revenue

impact of the proposed new service; and

(3) Any other analyses prepared by

the Postal Service that bear on the

overall effects of introducing the

proposed new service during the

requested test period.

Issued by the Commission on May 7, 1996.

Margaret P. Crenshaw,

Secretary.

[FR Doc. 96–12130 Filed 5–14–96; 8:45 am]

BILLING CODE 7710–FW–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[OH16–3–7264a; FRL–5439–4]

Approval and Promulgation of

Implementation Plans; Ohio

AGENCY: Environmental Protection

Agency.

ACTION: Direct final rule.

SUMMARY: On August 23, 1994, the

United States Environmental Protection

Agency (USEPA) granted conditional

approval of revisions to the emission

limitations, compliance methodologies,

and compliance time schedules in

Ohio’s State Implementation Plan (SIP)

for sulfur dioxide (SO2) as it applies to

Hamilton County. The outstanding

condition has been addressed, and

USEPA is now fully approving the

Hamilton County, Ohio, SO2 SIP.

Submitted by Ohio in response to

modeling analyses which predicted

violations of the SO2 National Ambient

Air Quality Standards (NAAQS) due to

Hamilton County sources, this SIP has

been demonstrated to provide for

attainment and maintenance of the SO2

NAAQS in Hamilton County.

DATES: This action will be effective on

July 15, 1996 unless adverse or critical

comments not previously addressed by

the State or USEPA are received by June

14, 1996. If the effective date is delayed,

timely notice will be published in the

Federal Register.

ADDRESSES: Written comments should

be addressed to: J. Elmer Bortzer, Chief,