51714 Federal Register / Vol. 73, No. 172 / Thursday, September 4, 2008 / Rules and Regulations 

1Notice of United States Postal Service of Filing 

of Functionally Equivalent Global Expedited 

Package Services 1 Negotiated Service Agreements, 

August 5, 2008, filed in Docket Nos. CP2008–11, 

CP2008–12, and CP2008–13 (Notices). 

2 Docket No. CP2008–5, Order Concerning Global 

Expedited Package Services Contracts, July 23, 2008 

(Order No. 86). 

3Order No. 86 at 7. 

4 Docket No. CP2008–5, United States Postal 

Service Notice of Filing Redacted Copy of 

Governors’ Decision No. 08–7, July 23, 2008. 

5PRC Order No. 95, Notice and Order Concerning 

Filing of Additional Global Expedited Package 

Services 1 Negotiated Service Agreements, August 

11, 2008 (Order No. 95). 

6 Docket No. CP2008–11, United States Postal 

Service Response to Notice and Order Concerning 

Global Expedited Package Services 1 Negotiated 

Service Agreements and Notice of Filing of 

Redacted Copy of Certifications, August 13, 2008; 

Docket No. CP2008–12, United States Postal Service 

Response to Notice and Order Concerning Global 

Expedited Package Services 1 Negotiated Service 

Agreements and Notice of Filing of Redacted Copy 

of Certifications, August 13, 2008; Docket No. 

CP2008–13, United States Postal Service Response 

to Notice and Order Concerning Global Expedited 

Package Services 1 Negotiated Service Agreements 

and Notice of Filing of Redacted Copy of 

Certifications, August 13, 2008. 

7Public Representative Comments in Response to 

United States Postal Service Notice of Global 

Expedited Package Services Contract, August 19, 

2008 (Comments of Public Representative). 

POSTAL REGULATORY COMMISSION 

39 CFR Part 3020 

[Docket Nos. CP2008–11, CP2008–12, 

CP2008–13; Order No. 103] 

Administrative Practice and 

Procedure; Postal Service 

AGENCY: Postal Regulatory Commission. 

ACTION: Final rule. 

SUMMARY: The Commission is adding 

several recently-negotiated Global 

Express Package Service contracts to the 

competitive product list. This action is 

consistent with changes in a recent law 

governing postal operations. Republication of the lists of market 

dominant and competitive products is 

also consistent with new requirements 

in the law. 

DATES: Effective September 4, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Stephen L. Sharfman, General Counsel, 

202–789–6820 or 

stephen.sharfman@prc.gov. 

SUPPLEMENTARY INFORMATION: 

Regulatory History 

73 FR 43344, July 24, 2008 

On August 5, 2008, the Postal Service 

filed three identical notices, which have 

been assigned to Docket Nos. CP2008– 

11, CP2008–12, and CP2008–13, 

announcing prices and classification 

changes for competitive products not of 

general applicability.1 These notices 

announce individual negotiated service 

agreements, namely, specific Global 

Express Package Service (GEPS) 

contracts the Postal Service has entered 

into with individual mailers. The Postal 

Service believes each is functionally 

equivalent to the Global Express 

Package Services 1 (GEPS 1) product 

established in Docket No. CP2008–5. 

These dockets have been filed pursuant 

to 39 U.S.C. 3633, 39 CFR 3015.5 and 

Order No. 86.2 In Order No. 86, the 

Commission found that additional 

contracts may be included as part of the 

GEPS 1 product if they meet the 

requirements of 39 U.S.C. 3633 and if 

they are substantially equivalent to the 

initial GEPS 1 contract.3

In support of each of these dockets, 

the Postal Service also filed the contract 

and supporting materials under seal. 

The Governor’s Decision supporting the 

GEPS 1 product was filed in 

consolidated Docket No. CP2008–5.4

The Notices also contain the Postal 

Service’s arguments that these 

agreements are substantially equivalent 

and that they exhibit similar cost and 

market characteristics to the GEPS 1 

product. Notices at 3–5. 

In Order No. 95, the Commission gave 

notice of the three dockets, requested 

the Postal Service to address certain 

issues, appointed a Public 

Representative, and provided the public 

with an opportunity to comment.5

I. Postal Service Supplemental Filing 

In response to Order No. 95, the 

Postal Service filed redacted versions of 

the certifications related to the contracts 

filed in Docket Nos. CP2008–11, 

CP2008–12, and CP2008–13.6 These 

versions redact the names of the 

contracting parties, the listed 

percentages, and commercial 

information relating to pricing factors 

that the Postal Service believes should 

not be publicly disclosed. Id. 

II. Comments 

Comments were filed by the Public 

Representative.7 The Public 

Representative’s comments focus on 

four areas: (1) Cost coverage; (2) 

appropriate classification; (3) increased 

access to U.S. goods by consumers; and 

(4) transparency and disclosure. The 

Public Representative asserts that the 

three contracts at issue in this 

proceeding satisfy the requirements of 

Commission rule 3015.5 and 39 U.S.C. 

3633 regarding cost coverage, the lack of 

cross-subsidization, and contribution to 

institutional costs. Comments of Public 

Representative at 3. The Public 

Representative also believes that the 

contracts are substantially similar and 

any differences between them and the 

original GEPS 1 contract are immaterial. 

Id. at 4. Accordingly, the Public 

Representative contends that these 

contracts should be included as part of 

the GEPS 1 product category. 

The remainder of the Public 

Representative’s comments focus on the 

benefits of the contracts to U.S. 

consumers and the progress being made 

toward ensuring that only appropriately 

confidential information is submitted to 

the Commission under seal. Id. at 5–8. 

III. Commission Analysis 

The Postal Service proposes to add 

additional contracts under the GEPS 1 

product that was created by Docket No. 

CP2008–5. In Order No. 86, the 

Commission noted that: 

If the Postal Service determines that it has 

entered into an agreement substantially 

equivalent to GEPS 1 with another mailer, it 

may file such a contract under rule 3015.5. 

In each case, the individual contract must be 

filed with the Commission, and each contract 

must meet the requirements of 39 U.S.C. 

3633. The Postal Service shall identify all 

significant differences between the new 

contract and the pre-existing product group, 

GEPS 1. Such differences would include 

terms and conditions that impose new 

obligations or new requirements on any party 

to the contract. The Commission will verify 

whether or not any subsequent contract is in 

fact substantially equivalent. Contracts not 

having substantially the same terms and 

conditions as the GEPS 1 contract must be 

filed under 39 CFR part 3020, subpart B. 

Order No. 86 at 7. First, the Commission 

reviews the contracts to ensure that they 

are substantially equivalent to the preexisting contract classified as part of the 

GEPS 1 product and thus belong as part 

of that product category. Second, the 

Commission must ensure that the 

contracts at issue in this proceeding 

independently satisfy the requirements 

of rule 3015.5 and 39 U.S.C. 3633. 

Here, the Postal Service has filed 

three additional contracts (Docket Nos. 

CP2008–11, CP2008–12, and CP2008– 

13) that it believes are substantially 

similar to the one submitted in Docket 

No. CP2008–5, and accordingly should 

be grouped under the GEPS 1 product. 

Notices at 3–5. It argues these contracts 

share the same cost and market 

characteristics as the previously 

classified GEPS 1 contract, in particular, 

those of small or medium-sized 

businesses that mail their products 

directly to foreign destinations using 

either Express Mail International, 

Priority Mail International, or both. Id. 

at 4. 

The Postal Service also identifies 

differences between proposed new 

contracts and the pre-existing product 

group, GEPS 1. Id. at 4–5. In particular, 


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Federal Register / Vol. 73, No. 172 / Thursday, September 4, 2008 / Rules and Regulations 51715 

8The differences between the contracts and the 

originally classified GEPS 1 contract do not appear 

to be substantial. However, this finding does not 

preclude the Commission from revisiting this issue 

at a future date if circumstances warrant. 

it notes the following differences: (1) 

Price differences depending on volume 

or postage commitments; (2) price 

differences due to updated costing 

information; (3) a link between the 

regulatory review process and the 

expiration date of the agreement; and (4) 

liquidated damages provisions based on 

individual negotiations and needs. 

The Commission has reviewed the 

contracts in Dockets No. CP2008–11, 

CP2008–12, and CP2008–13 and finds 

those agreements to be substantially 

equivalent in all pertinent respects to 

the GEPS 1 product.8

Additionally, the Commission 

reviews the filings to ensure that they 

meet the requirements of rule 3015.5 

and 39 U.S.C. 3633. The Commission 

has reviewed the financial analysis 

provided under seal that accompanies 

the agreements in all three dockets as 

well as the comments filed by interested 

persons. Based on the information 

provided, the Commission finds that all 

three proposed contracts submitted 

should cover their attributable costs (39 

U.S.C. 3633(a)(2)), should not lead to 

the subsidization of competitive 

products by market dominant products 

(39 U.S.C. 3633(a)(1)), and should have 

a positive effect on competitive 

products’ contribution to institutional 

costs (39 U.S.C. 3633(a)(3)). Thus, a 

preliminary review of the proposed 

contracts indicates that they comport 

with the provisions applicable to rates 

for competitive products. 

The revisions to the competitive 

product list are shown below the 

signature of this Order, and shall 

become effective upon publication in 

the Federal Register. 

IV. Ordering Paragraphs 

It is Ordered: 

1. The contracts filed in Dockets Nos. 

CP2008–11, CP2008–12, and CP2008–13 

are added to the product category Global 

Express Package Services 1 (CP2008–5). 

2. The Secretary shall arrange for 

publication of this Order in the Federal 

Register. 

List of Subjects in 39 CFR Part 3020 

Administrative practice and 

procedure, Postal Service. 

By the Commission. 

Judith M. Grady, 

Acting Secretary. 

■ For the reasons stated in the preamble, 

under the authority at 39 U.S.C. 503, the 

Postal Regulatory Commission amends 

39 CFR part 3020 as follows: 

PART 3020—PRODUCT LISTS 

■ 1. The authority citation for part 3020 

continues to read as follows: 

Authority: 39 U.S.C. 503; 3622; 3631; 3642; 

3682. 

■ 2. Revise Parts A and B of Appendix 

A to Subpart A of Part 3020—Mail 

Classification Schedule to read as 

follows: 

Appendix A to Subpart A of Part 

3020—Mail Classification Schedule 

PART A—MARKET DOMINANT

PRODUCTS

1000 Market Dominant Product List 

First-Class Mail 

Single-Piece Letters/Postcards. 

Bulk Letters/Postcards. 

Flats. 

Parcels. 

Outbound Single-Piece First-Class Mail International. 

Inbound Single-Piece First-Class Mail International. 

Standard Mail (Regular and Nonprofit) 

High Density and Saturation Letters. 

High Density and Saturation Flats/Parcels. 

Carrier Route. 

Letters. 

Flats. 

Not Flat-Machinables (NFMs)/Parcels. 

Periodicals 

Within County Periodicals. 

Outside County Periodicals. 

Package Services 

Single-Piece Parcel Post. 

Inbound Surface Parcel Post (at UPU rates). 

Bound Printed Matter Flats. 

Bound Printed Matter Parcels. 

Media Mail/Library Mail. 

Special Services 

Ancillary Services. 

International Ancillary Services. 

Address List Services. 

Caller Service. 

Change-of-Address Credit Card Authentication. 

Confirm. 

International Reply Coupon Service. 

International Business Reply Mail Service. 

PART A—MARKET DOMINANT

PRODUCTS—Continued 

1000 Market Dominant Product List 

Money Orders. 

Post Office Box Service. 

Negotiated Service Agreements 

HSBC North America Holdings Inc. Negotiated Service Agreement. 

Bookspan Negotiated Service Agreement. 

Bank of America Corporation Negotiated 

Service Agreement. 

The Bradford Group Negotiated Service 

Agreement. 

1001 Market Dominant Product Descriptions. 

PART B—COMPETITIVE PRODUCTS

2000 Competitive Product List 

Express Mail 

Express Mail. 

Outbound International Expedited Services. 

Inbound International Expedited Services 

Inbound International Expedited Services 

1 (CP2008–7). 

Priority Mail 

Priority Mail. 

Outbound Priority Mail International. 

Inbound Air Parcel Post. 

Parcel Select 

Parcel Return Service 

International 

International Priority Airlift (IPA). 

International Surface Airlift (ISAL). 

International Direct Sacks—M-Bags. 

Global Customized Shipping Services. 

Inbound Surface Parcel Post (at non-UPU 

rates). 

International Money Transfer Service. 

International Ancillary Services. 

Special Services 

Premium Forwarding Service. 

Negotiated Service Agreements 

Domestic 

Express Mail Contract 1 (MC2008–5). 

Outbound International 

Global Expedited Package Services 

(GEPS) Contracts 

GEPS 1 (CP2008–5, CP2008–11, 

CP2008–12, and CP2008–13). 

Global Plus Contracts 

Global Plus 1 (CP2008–9 and 

CP2008–10). 

* * * * * 

[FR Doc. E8–20442 Filed 9–3–08; 8:45 am] 

BILLING CODE 7710–FW–P 


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