Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Notices 6221 

Compliance With Relevant Law 

The Priority Mail large flat-rate box will 

represent a small percentage of total Priority 

Mail International (PMI) volume. It, 

therefore, can have only a limited effect on 

total contribution, but it is designed to 

increase contribution by having a price set 

approximately at the average for similarweight PMI pieces. It may also increase 

contribution by increasing total PMI usage. 

Any potential for contribution loss is 

partially offset by the imposition of a 20- 

pound limit. As shown above, the large flatrate box will easily cover its costs. Therefore, 

the Priority Mail International large flat-rate 

box will not raise an issue of subsidization 

of competitive products by market dominant 

products (39 U.S.C. § 3633(a)(1)); or 

undermine the ability of Priority Mail 

International to cover its attributable costs 

(39 U.S.C. § 3633(a)(2)); or undermine the 

ability of competitive products as a whole to 

comply with 39 U.S.C. § 3633(a)(3), which, as 

implemented by 39 CFR § 3015.7(c), requires 

competitive products to contribute a 

minimum of 5.5 percent to the Postal 

Service’s total institutional costs. 

Certification of Governors’ Vote in the 

Governors’ Decision No. 08–1 

I hereby certify that the following 

Governors voted by paper ballot on adopting 

Governors’ Decision No. 08–1: 

Mickey D. Barnett 

James H. Bilbray 

Carolyn Lewis Gallagher 

Louis J. Giuliano 

Alan C. Kessler 

Thurgood Marshall, Jr. 

James C. Miller III 

Katherine C. Tobin 

Ellen C. Williams 

The vote was 9–0 in favor. 

Wendy A. Hocking, 

Secretary of the Board of Governors. 

[FR Doc. E8–1778 Filed 1–31–08; 8:45 am] 

BILLING CODE 7710–12–P 

POSTAL SERVICE 

Change in Rates of General 

Applicability for a Competitive Product 

AGENCY: Postal Service. 

ACTION: Notice of a change in rates of 

general applicability for a competitive 

product. 

SUMMARY: This notice sets forth changes 

in rates of general applicability for a 

competitive product, specifically the 

establishment of a premium for 

guaranteed delivery of Express Mail 

pieces on a Sunday or holiday. 

EFFECTIVE DATE: March 3, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Daniel J. Foucheaux, Jr., 202–268–2989. 

SUPPLEMENTARY INFORMATION: On 

January 17, 2008, pursuant to their 

authority under 39 U.S.C. 3632, the 

Governors of the Postal Service 

established a premium for guaranteed 

Sunday or holiday delivery of Express 

Mail pieces. The Governors’ Decision 

and the record of proceedings in 

connection with such decision are 

reprinted below in accordance with 

§ 3632(b)(2). Implementing regulations 

are published elsewhere in this issue. 

Neva R. Watson, 

Attorney, Legislative. 

Decision of the Governors of the United 

States Postal Service on a Premium For 

Express Mail Pieces Guaranteed for Delivery 

on a Sunday or Holiday (Governors’

Decision No. 08–2) 

January 17, 2008 

Statement of Explanation and Justification 

Pursuant to our authority under section 

3632 of title 39, as amended by the Postal 

Accountability and Enhancement Act of 

2006, we establish a premium of $12.50 

above the current price for delivery of nonmanifest Express Mail pieces that are 

guaranteed for delivery on a Sunday or 

holiday. We have reviewed the attached 

analysis provided by management and have 

evaluated this change in accordance with 39 

U.S.C. 3632–3633 and 39 CFR 3015.2, which 

address changes in rates of general 

applicability for competitive services. 

As indicated in the attached analysis, 

Express Mail pieces guaranteed for delivery 

on a Sunday or holiday pay the same price 

as pieces guaranteed for Monday through 

Saturday delivery, even though the Postal 

Service incurs additional costs of $5.50 for 

such pieces. The Postal Service is the only 

carrier in the highly competitive express 

delivery market that offers delivery on 

Sundays, as well as many holidays. The 

Postal Service’s competitors charge at least 

$12.50 for items that are guaranteed for 

delivery on Saturday, a day on which they 

do not ordinarily provide delivery. The 

analysis of demand and contribution in the 

attachment indicates that it is likely a $12.50 

premium on non-manifest Express Mail 

pieces presented for Sunday or holiday 

delivery will result in a net gain in 

contribution for both Express Mail service 

and for competitive products as a whole. 

Based on this analysis, we find that this 

proposal complies with 39 U.S.C. 3633(a): 

The fee does not raise an issue of 

subsidization of competitive products by 

market dominant products (39 U.S.C. 

3633(a)(1)); approving it would have no 

negative effects on the ability of Express Mail 

to cover its attributable costs (39 U.S.C. 

3633(a)(2)); and it would not negatively effect 

the ability of competitive products as a whole 

to comply with 39 U.S.C. 3633(a)(3), which, 

as implemented by 39 CFR 3015.7 (c), 

requires competitive products to contribute a 

minimum of 5.5 percent to the Postal 

Service’s total institutional costs. Indeed, the 

analysis indicates that this change should 

result in increased contribution for the 

Express Mail product, and for competitive 

products as a whole. 

Order 

Effective March 3, 2008, a premium of 

$12.50 shall be added to the price of each 

non-manifest Express Mail piece that is 

guaranteed for delivery on a Sunday or 

holiday. We direct the Secretary to have this 

decision published in the Federal Register in 

accordance with 39 U.S.C. 3632(b)(2). We 

also direct management to file with the Postal 

Regulatory Commission appropriate notice of 

this change. 

By the Governors: 

Analysis of the Express Mail Sunday/ 

Holiday Premium 

The U.S. Postal Service currently accepts 

approximately 433,000 Express Mail pieces 

per year for Sunday or holiday delivery. A 

Sunday delivery costs the Postal Service 

$5.50 more than a Monday–Saturday 

delivery. A premium for Express Mail pieces 

committed for delivery on Sunday or a 

holiday is sustainable in the marketplace, 

and would allow the Postal Service to 

capture additional value provided by a 

unique, premium service. A $12.50 premium 

will be accepted by customers, generate 

additional contribution for the Postal Service, 

and provide protection from risk. 

Price and Service Advantages in the 

Marketplace 

The Postal Service is the only carrier to 

offer Sunday delivery, as well as delivery on 

many holidays. Other carriers impose a 

surcharge for Saturday delivery. UPS and 

FedEx currently charge an additional $12.50 

for Saturday delivery; DHL charges $15.00. 

The Express Mail Sunday/Holiday premium 

would be equal to or less than what 

competitors charge for Saturday delivery. 

The $12.50 charge also represents less of a 

premium over Monday–Saturday average 

prices than the surcharge other carriers 

charge for Saturday delivery. A charge of 

$12.50 represents a 72 percent premium over 

the current average Express Mail price, while 

the same amount adds 81 percent to the 

average price of an overnight FedEx or UPS 

parcel. 

Rationale for the Premium Amount 

$12.50 is a price point at which we can 

capture substantial contribution without 

diverting customers away from postal 

services. Because the premium represents the 

value of delivering on a non-business day 

and is equal to or lower than what 

competitors charge for a similar service, 

customers will likely accept a charge at this 

level. 

There may be different demand for Sunday 

delivery than for other days of the week. 

Although overall Express Mail volume has 

decreased approximately 12 percent since the 

May 2007 rate change, volume for Sunday 

has actually risen more than 10 percent. 

Given the small volume delivered on 

Sunday, firm conclusions about elasticity 

cannot be drawn, yet the increase does 

suggest that Sunday Express Mail pieces are 

less price sensitive than the rest of Express 

Mail. 


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6222 Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Notices 

A $12.50 premium also provides protection 

in the event that Sunday delivery costs do 

not decrease quickly in response to a change 

in volume. Although there is currently a 

$5.50 cost difference between a Sunday 

delivery and a Monday–Saturday delivery, a 

reduction in Sunday deliveries may not 

result in short-term cost reductions, as 

staffing plans cannot be changed 

immediately, and because minimum staffing 

will need to be maintained. A premium of 

$12.50 provides additional margin to cover 

those costs. 

Using data from the FY 2007 Cost and 

Revenue Analysis, and elasticities from the 

Docket No. R2006–1 omnibus rate case, a 

premium of $12.50 on non-manifest Express 

Mail pieces guaranteed for Sunday or holiday 

delivery will likely yield a pro-forma 

contribution increase between $3.1 million 

and $3.8 million. This increase results from 

additional revenue generated by the premium 

plus net cost savings from pieces that move 

out of Sunday delivery. Manifest pieces are 

exempt from the premium because the small 

number of these pieces does not justify 

changing the manifest system at this time. 

Analysis of Sunday Delivery Demand and 

Contribution 

Applying the system-wide Express Mail 

own-price elasticity implies a volume loss of 

slightly less than 250,000 Express Mail 

pieces; rather than disappear, however, the 

vast majority of these pieces will move into 

Express Mail guaranteed for Monday (or day 

after holiday) delivery or into Priority Mail. 

Express Mail pieces that move to Monday 

still increase contribution despite the lack of 

a premium, because of the extra cost of 

Sunday delivery. Contribution from pieces 

that migrate into Priority Mail will decrease 

only about 78 cents per piece, on average. 

There is some risk to these projections. 

Assuming that 90 percent of the volume lost 

from Express Mail on Sunday will migrate to 

Monday delivery (about two-thirds) or 

Priority Mail (about 23 percent), and 

therefore stay within the Postal system. It 

will provide at least some contribution. It is 

possible, however, that these pieces might 

either switch to another carrier or disappear 

altogether (for instance, through electronic 

diversion of bill payments). To the extent 

that this possibility is underestimated, the 

net contribution increase resulting from the 

premium would be overestimated. If no lost 

volume migrates to Monday delivery, 

contribution gain will nonetheless be about 

half of the estimate, assuming that this 

Express Mail volume has an own-price 

elasticity of demand equal to or lower than 

that of Express Mail as a whole. If that 

assumption is not valid, contribution gain 

from the premium will be lower, though the 

price response would have to be more than 

twice that of the product as a whole before 

we would be at risk of a net loss of 

contribution. 

These factors support the conclusion that 

a $12.50 premium on non-manifest Express 

Mail presented for Sunday or holiday 

delivery will result in a net gain in 

contribution for both Express Mail and for 

competitive products as a whole. 

Compliance With Relevant Law 

Because the premium will likely increase 

contribution for both Express Mail and for 

competitive products as a whole, this new 

premium will not raise an issue of 

subsidization of competitive products by 

market dominant products, (39 U.S.C. 

3633(a)(1)), or have a negative effect on the 

ability of Express Mail to cover its 

attributable costs (39 U.S.C. 3633(a)(2)), or for 

competitive products as a whole to comply 

with 39 U.S.C. 3633(a)(3), which, as 

implemented by 39 CFR 3015.7 (c), requires 

competitive products to cover a minimum of 

5.5 percent to the Postal Service’s total 

institutional costs. 

Certification of Governors’ Vote in the 

Governors’ Decision No. 08–2 

I hereby certify that the following 

Governors voted by paper ballot on adopting 

Governors’ Decision No. 08–2: 

Mickey D. Barnett 

James H. Bilbray 

Carolyn Lewis Gallagher 

Louis J. Giuliano 

Alan C. Kessler 

Thurgood Marshall, Jr. 

James C. Miller III 

Katherine C. Tobin 

Ellen C. Williams 

The vote was 9–0 in favor. 

Dated: January 17, 2008. 

Wendy A. Hocking, 

Secretary of the Board of Governors. 

[FR Doc. E8–1781 Filed 1–31–08; 8:45 am] 

BILLING CODE 7710–12–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Submission for OMB Review; 

Comment Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Investor 

Education and Advocacy, 

Washington, DC 20549–0213. 

Extension: 

Rule 206(4)–4; SEC File No. 270–304; 

OMB Control No. 3235–0345. 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget a 

request for extension of the previously 

approved collections of information 

discussed below. 

The title for the collection of 

information is ‘‘Rule 206(4)–4’’ (17 CFR 

275.206(4)–4) under the Investment 

Advisers Act of 1940 (15 U.S.C. 80b–1 

et seq.). Rule 206(4)–4 requires advisers 

to disclose certain financial and 

disciplinary information to clients. The 

disclosure requirements in rule 206(4)–

4 are designed so that a client will have 

information about an adviser’s financial 

condition and disciplinary events that 

may be material to an evaluation of the 

adviser’s integrity or ability to meet 

contractual commitments to clients. 

Respondents are registered investment 

advisers with certain disciplinary 

history or a financial condition that is 

reasonably likely to affect contractual 

commitments. We estimate that 

approximately 1,839 advisers are subject 

to this rule. The rule requires 

approximately 7.5 burden hours per 

year per adviser and amounts to 

approximately 13,793 total burden 

hours (7.5 × 1,839) for all advisers. 

The disclosure requirements of rule 

206(4)–4 do not require recordkeeping 

or record retention. The collection of 

information requirements under the rule 

are mandatory. Information subject to 

the disclosure requirements of rule 

206(4)–4 is not submitted to the 

Commission. Accordingly, the 

disclosures pursuant to the rules are not 

kept confidential. An agency may not 

conduct or sponsor, and a person is not 

required to respond to, a collection of 

information unless it displays a 

currently valid control number. 

Please direct general comments 

regarding the above information to the 

following persons: (i) Desk Officer for 

the Securities and Exchange 

Commission, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503 

or e-mail to: 

Alexander_T._Hunt@omb.eop.gov; and 

(ii) R. Corey Booth, Director/Chief 

Information Officer, Securities and 

Exchange Commission, C/O Shirley 

Martinson, 6432 General Green Way, 

Alexandria, VA 22312; or send an email to: PRA_Mailbox@sec.gov. 

Comments must be submitted to OMB 

within 30 days of this notice. 

Dated: January 28, 2008. 

Nancy M. Morris, 

Secretary. 

[FR Doc. E8–1840 Filed 1–31–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Submission for OMB Review; 

Comment Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Investor 

Education and Advocacy, 

Washington, DC 20549–0213. 

Extension: 

Rule 17e–1; SEC File No. 270–224; OMB 

Control No. 3235–0217. 

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