53324 Federal Register / Vol. 73, No. 179 / Monday, September 15, 2008 / Proposed Rules 

POSTAL REGULATORY COMMISSION 

39 CFR Parts 3001 and 3050 

[Docket No. RM2008–4; Order No. 104] 

Periodic Reporting Rules 

AGENCY: Postal Regulatory Commission. 

ACTION: Proposed rule. 

SUMMARY: The Commission is proposing 

a set of rules to address a continuing 

and expanded need, under a new law, 

for periodic reports from the Postal 

Service. The proposal describes the 

scope of reporting and the level of detail 

the Commission believes is needed to 

provide accountability and transparency 

with respect to Postal Service 

operations. Comments will assist the 

Commission in developing a final set of 

reporting rules. 

DATES: Initial comments due October 16, 

2008. Reply comments due November 

14, 2008. 

ADDRESSES: Submit comments 

electronically via the Commission’s 

Filing Online system at http:// 

www.prc.gov. 

FOR FURTHER INFORMATION CONTACT: 

Stephen L. Sharfman, General Counsel, 

202–789–6820 and 

stephen.sharfman@prc.gov. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

The Postal Accountability and 

Enhancement Act (PAEA), Public Law 

109–435, 120 Stat. 3198 (2006), calls for 

a fundamental shift of responsibilities 

between the Postal Service and the 

Postal Regulatory Commission 

(Commission) from those established in 

the Postal Reorganization Act (PRA). 

Under the PAEA, the Postal Service has 

acquired considerable autonomy and 

flexibility in determining what specific 

rates and discounts will be charged for 

mail products. Concurrently, the 

Commission’s information gathering 

and reporting responsibilities have been 

greatly enhanced. This is consistent 

with a dominant theme in the PAEA 

that increasing the transparency of the 

Postal Service’s pricing, classification, 

and service policies will reduce the 

need to actively regulate the Postal 

Service in these areas. 

II. Statutory Duties That Shape the 

Proposed Periodic Reporting 

Requirements 

Perhaps the most important tools 

provided by the PAEA for achieving the 

transparency on which the new 

statutory scheme relies are the annual 

report that 39 U.S.C. 3652 requires the 

Postal Service to provide to the 

Commission (which this Notice will 

refer to as the ‘‘Annual Report’’); the 

annual evaluation of the regulatory 

system that 39 U.S.C. 3651 requires the 

Commission to provide to Congress and 

the President; and the requirement of 39 

U.S.C. 3653 that the Commission 

determine whether the Postal Service 

has met the rate setting, service, and 

other goals of the PAEA during the 

preceding fiscal year (which this Notice 

will refer to as the ‘‘Annual Compliance 

Determination’’). In addition, the PAEA 

requires the Commission to prepare 

longer-term reports and assessments 

such as those required by sections 701 

and 702 of the PAEA, to elicit various 

managerial reports such as those 

required by 39 U.S.C. 2803 and 2804, 

and to oversee specialized financial 

reporting such as that required by 39 

U.S.C. 3654. The periodic reporting 

rules proposed in this Notice are 

designed to implement all of the PAEA’s 

provisions that make the Postal 

Service’s operations and finances 

transparent and accountable. 

Accordingly, the general terms 

‘‘periodic reports’’ and ‘‘annual reports’’ 

are used in this Notice unless the 

information elicited serves only the 

purposes of the Annual Compliance 

Determination that the Commission 

must make under 39 U.S.C. 3653. 

A. Statutory Standards Guiding the 

Annual Review Cycle 

The annual compliance report that 39 

U.S.C. 3652 requires the Postal Service 

to provide to the Commission is 

intended to contain the source material 

for the Commission’s annual 

compliance determination of the degree 

to which postal rates and service 

comply with he requirements, 

objectives, and factors of the PAEA. The 

Postal Service’s compliance report is to 

include an analysis of the costs, 

revenues, rates, and quality of service 

‘‘in sufficient detail to demonstrate that 

all products during such year complied 

with all applicable requirements of this 

title[.]’’ 39 U.S.C. 3652(a)(1). The Postal 

Service’s compliance report to the 

Commission is required to demonstrate 

the extent to which both market 

dominant and competitive products 

recover their attributable costs and 

contribute to institutional costs. See 39 

U.S.C. 3622(b)(9), 3622(c)(2), 3633(a)(2), 

and 3633(a)(3). The Postal Service’s 

annual compliance report must also 

allow the service quality of market 

dominant products to be identified and 

evaluated. See 39 U.S.C. 3622(b)(3), 

3622(c)(9), and 3691. 

Similar information is needed with 

regard to the Postal Service’s 

competitive products. 39 U.S.C. 

3622(b)(9) and 3633(a)(3) require the 

Commission to determine an 

appropriate contribution for the 

competitive classes as a whole to the 

Postal Service’s institutional costs. This 

determination is applied to future years. 

Such determinations must take into 

account ‘‘all relevant circumstances, 

including the prevailing competitive 

conditions in the market.’’ See 39 U.S.C. 

3633(b). 

There are additional reasons that the 

Commission needs to be able to evaluate 

the present and the future as well as the 

past. 39 U.S.C. 3651 requires the 

Commission each year to evaluate the 

effectiveness of the regulatory system 

that it has constructed to implement the 

PAEA. This report is to include an 

evaluation of ‘‘the extent to which 

regulations are achieving the objectives 

under sections 3622 and 3633, 

respectively.’’ Thus, the Commission is 

required to assess the degree to which 

the Postal Service’s management of both 

market dominant and competitive 

products is consistent with the 

objectives of the new statutory scheme. 

The Commission notes that 39 U.S.C. 

3651 asks the Commission to evaluate 

the extent to which its regulations ‘‘are 

achieving’’ their statutory objectives, 

rather than the extent to which they 

‘‘have achieved’’ them. This implies that 

the Commission is expected to base its 

evaluation on current as well as 

historical conditions. The Commission 

must also estimate the costs that the 

Postal Service is incurring to comply 

with its public service mandate and the 

statutory preferences that are preserved 

in the PAEA. See 39 U.S.C. 

3651(b)(1)(A) and (B). 

39 U.S.C. 3654 requires the Postal 

Service to submit quarterly and annual 

financial reports to the Commission that 

meet the requirements that corporations 

issuing publicly registered securities 

must meet in their financial reporting to 

the Securities Exchange Commission, 

including the requirements of the 

Sarbanes-Oxley Act of 2002. The 

Commission proposes to incorporate the 

reporting requirements of 39 U.S.C. 

3654 into the periodic reporting rules 

under consideration in this docket. See 

proposed §§ 39 CFR 3050.40 through 

3050.42. 

B. Longer-Term Evaluation 

Responsibilities 

In addition to annual reporting 

obligations, the Commission is required 

to undertake evaluations of the 

functioning of the regulatory system it 

has implemented under the PAEA on 

longer-than-annual cycles. 39 U.S.C. 

3633(b), already mentioned, requires the 

Commission every 5 years to re-evaluate 


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the need for the requirement that the 

Postal Service’s competitive products 

make an institutional cost contribution 

determined by the Commission. Section 

701 of the PAEA requires the 

Commission, at least every 5 years, to 

re-evaluate the appropriateness of its 

regulatory framework, and recommend 

any needed modifications to the 

President and Congress. Section 702 

requires the Commission, within 2 years 

of enactment of the PAEA, to report to 

the President and Congress on the scope 

and standards of universal service and 

the postal monopoly likely to be 

required in the future. To adequately 

prepare for these longer-cycle reviews, 

the Commission will need forward 

looking as well as historical information 

to stay abreast of developments in the 

Postal Service’s finances and operations. 

The Commission needs a sound 

knowledge base from which it can 

evaluate the Postal Service’s commercial 

and financial prospects. 

Under the PAEA, the Commission has 

a continuing obligation to advise the 

Department of State on international 

mail matters. The Department of State 

has the lead responsibility for 

negotiating treaties that affect rates 

charged for market dominant 

international mail. 39 U.S.C. 407(c) 

assigns to the Commission an ongoing 

responsibility to provide the Secretary 

of State with its views on whether rates 

and classifications in an international 

treaty are consistent with the standards 

and criteria established by the 

Commission under the PAEA. This new 

statutory role affirms the Commission’s 

need for current, detailed information 

concerning international mail. 

Accordingly, under the proposed rules, 

the Postal Service would provide the 

cost, volume, revenue, and weight of 

outbound and inbound international 

market dominant products, 

disaggregated by rate regime and 

country. It would also provide as yet 

unspecified service performance data in 

proposed 39 CFR 3050.52. 

III. Comparing the Periodic Reporting 

Required Under the PAEA With That 

Required Under the PRA 

A. The Impact of Changes in 

Commission Responsibilities 

Under the PRA, the most burdensome 

filing requirements were those 

associated with specific rate requests. 

These requirements, contained in 39 

CFR 3001 Subparts B and C are no 

longer applicable and have been 

replaced by far more spare 

requirements. See 39 CFR 3010.14 and 

3015.5, adopted in Order No. 43, 

October 29, 2007 [See 72 FR 63662, 

November 9, 20007]. 

In contrast, the evaluation and 

reporting duties given the Commission 

by the PAEA require periodic reports 

from the Postal Service that are broader 

in scope than the Commission’s current 

periodic reporting rules, which were 

designed to support the Commission’s 

functions under the PRA. Currently, the 

form and content of information that the 

Postal Service must report periodically 

to the Commission is governed by 39 

CFR 3001.102. Rule 102 requires that 

the Postal Service provide the 

Commission with financial accounting 

data by year and by accounting period, 

data on volumes and revenues by year 

and by quarter, and annual cost 

estimates by function (segment and 

component) and by subclass of mail. 

Rule 102 requires the Postal Service to 

provide the Commission with its annual 

Cost and Revenue Analysis (CRA) 

Report and its Cost Segments and 

Components (CSC) Report. Rule 103 

requires the equivalent reports with 

respect to international mail. 

Rule 102 reports were needed to 

enable the former Postal Rate 

Commission to perform its duties 

defined by the PRA. Chief among them 

was its duty to process the Postal 

Service’s omnibus rate requests in an 

expedited manner while still satisfying 

the formal ‘‘on the record’’ hearing 

requirements of sections 556 and 557 of 

the Administrative Procedure Act 

(APA). This required the former Postal 

Rate Commission to have an ongoing 

familiarity with the financial condition 

of the Postal Service, its cost, volume, 

and revenue trends, and the evolving 

methods by which the Postal Service 

gathered and analyzed cost data and 

attributed costs to subclasses. 

Under the PAEA, the need for the 

Commission to stay abreast of such 

developments is even greater. While it 

no longer has to use cumbersome trialtype procedures to evaluate proposed 

rate changes, the scope of its various 

review functions is comprehensive, and 

many must be completed in a very short 

time frame. 

B. Scope of Periodic Reports Under 

Current and Former Law 

1. Worksharing 

An important difference between the 

periodic reporting required of the Postal 

Service under the PRA and that which 

will be required under the PAEA relates 

to the costs and revenues associated 

with worksharing. For example, under 

the PRA, rule 102 did not require the 

Postal Service to annually report the 

costs avoided by worksharing for the 

relevant rate categories. The 

Commission required such information 

only in conjunction with omnibus 

requests to change rates and discounts. 

The PAEA, however, expressly requires 

the Commission to ‘‘ensure that 

[workshare] discounts do not exceed the 

cost that the Postal Service avoids as a 

result of workshare activity’’ unless 

justified on the basis of other identified 

benefits of worksharing activity. See 39 

U.S.C. 3622(e). The information 

necessary to make this determination 

must be included in the Postal Service’s 

annual compliance report. 

Proposed rule 3050.21(e)(4) directs 

the Postal Service to provide and 

explain the statutory justification for 

worksharing discounts that exceed 100 

percent of the associated cost avoidance. 

The intent of this rule is to provide the 

Commission and interested parties with 

the information necessary to determine, 

for each such discount, exactly which 

statutory exemption the Postal Service 

is invoking and the basis for the claim 

that the exemption applies to it. 

Rule 3010.14(b)(6) serves a similar 

function for market dominant rate 

adjustment filings. In the first filing of 

this type (Docket No. R2008–1), the 

Commission found it necessary to issue 

a Commission Information Request 

seeking clarification to ‘‘allow 

assessment of conformity of the 

discounted rates with the criteria in the 

Postal Accountability and Enhancement 

Act[.]’’ Commission Information 

Request No. 1, February 26, 2008 at 1 

(CIR No. 1). In response, the Postal 

Service identified the exemption it was 

claiming for each discount and 

elaborated upon its reasons for 

concluding that each discount satisfied 

the requirements of the exemption. 

Response of the United States Postal 

Service to Commission Information 

Request No. 1, March 4, 2008 (Response 

to CIR No. 1). The experience in that 

case should help provide guidance as to 

the extent of explanation and support 

that is anticipated to be provided to 

satisfy rules 3010.14(b)(6) and 

3050.21(e)(4). 

2. Negotiated Service Agreements 

Under the PRA, the Commission did 

not have standing rules requiring the 

periodic reporting of information 

specific to negotiated service 

agreements (NSAs). The PAEA requires 

an annual Commission determination as 

to whether NSAs ‘‘improve the net 

financial position of the Postal Service.’’ 

See 39 U.S.C. 3622(c)(10). 39 U.S.C. 

3633(a)(2) requires that each 

competitive product cover its 

attributable costs. Since the Commission 

views NSAs as distinct products, a 


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1For example, the lack of available mailerspecific elasticities led the Commission to use 

subclass-average elasticities for Standard Mail to 

generate its estimates in the 2007 ACD. See 2007 

ACD at 127–30. 

2The Postal Service and Parcel Shippers 

Association (PSA) have urged the Commission to 

consider the market positions of the Postal Service’s 

various competitive products when it determines 

what a reasonable institutional cost contribution for 

those products would be under section 3633(a). See 

Docket No. RM2007–1, Reply Comments of the 

United States Postal Service, May 7, 2007, at 27– 

28. PSA agrees that important evidence of the 

market position of competitive products is provided 

by their price elasticities of demand, citing the 

Postal Service’s estimates of the own-price elasticity 

and the cross-price elasticity of Priority Mail and 

Parcel Post. Docket No. RM2007–1, Comments of 

Parcel Shippers Association in Response to 

Commission Order Proposing Regulations, 

September 24, 2007, at 3–4. 

3PSA contended in a previous docket that if the 

Commission is to determine an appropriate 

contribution for competitive products as a whole, 

it must understand the role played by individual 

competitive products. It points out that over 80 

percent of the total contribution of competitive 

products comes from just two products—Priority 

Mail and Express Mail. Docket No. RM2007–1, 

Comments of the Parcel Shippers Association in 

Response to the Commission’s Order Proposing 

Regulations, September 24, 2007, at 3–4. 

contribution analysis is required of 

competitive NSAs as well. Accordingly, 

the Postal Service’s Annual Report 

should provide an estimate of the 

impact that each NSA had on total 

contribution for the fiscal year covered 

by its annual report. Under the 

proposed rules, therefore, the Annual 

Report should include sufficient 

information about the costs, volumes, 

and revenues associated with such 

agreements to enable the Commission to 

verify the Postal Service’s estimate. 

Proposed rule 3050.21(f)(4) directs the 

Postal Service to provide an analysis of 

each market dominant NSA that shows 

the effect of the agreement on the net 

financial position of the Postal Service. 

As with other quantitative estimates, 

rule 3050.21(f)(4) requires that the 

estimates be developed using accepted 

analytical principles. 

For most areas of analysis, the current 

methodological baseline is the set of 

analytical principles applied by the 

Commission in Docket No. R2006–1 and 

affirmed in the Commission’s FY 2007 

Annual Compliance Determination 

(2007 ACD). The financial effects of 

NSAs, however, were not litigated in 

Docket No. R2006–1. The Commission 

did not formulate generally applicable 

principles for determining their net 

financial effect until its 2007 ACD, 

which established the analytical 

principle that the financial impact of 

price incentives to increase mail volume 

or to shift mail volume between 

products should be based on the Postal 

Service’s best estimate of the price 

elasticity of the discounted product. 

2007 ACD at 127. 

The application of this principle will 

vary based on the specific terms and 

characteristics of each NSA, but its 

essence is the use of price elasticities to 

isolate the effect of rate incentives from 

other factors that affect volume. This 

analytical principle was first articulated 

by the Commission in its Opinion and 

Further Recommended Decision in 

Docket No. MC2004–3 at paras. 5011– 

38. Its purpose is to apply the terms of 

an agreement to the specific 

characteristics of the NSA partner’s 

eligible mail (e.g., unit revenues, unit 

costs, and price elasticities). The 

Commission recognizes that 

econometrically modeling the price 

elasticity of volumes sent by an 

individual mailer might not always be 

feasible. Accordingly, with the 

appropriate justification and 

explanation, reasonable proxies may be 

used for this and other mailer-specific 

traits that are not otherwise obtainable.1

The characteristics of the NSAs filed 

with the Commission to date make them 

impractical to analyze for their impact 

on contribution for the fiscal year. This 

is because each NSA so far has included 

discount incentives that are awarded 

based on their performance during each 

12-month period that the agreement is 

in effect. Therefore, unless an NSA’s 

implementation date coincides with the 

beginning of the fiscal year, it is 

impractical to evaluate the effect of the 

discounts for that fiscal year. 

The Commission’s proposed rules 

recognize this difficulty. Accordingly, 

they would require the Postal Service to 

select the anniversary of an NSA’s 

operation that falls within the fiscal year 

covered by the Postal Service’s annual 

compliance report, look back 12 months 

from that point, and estimate the NSA’s 

contribution to the Postal Service’s total 

institutional costs. See proposed rule 

3050.21(f)(4). 

3. The General Role of Elasticity of 

Demand 

Under the PRA, rule 102 did not 

require the Postal Service to provide 

information about the price elasticity of 

demand for postal products. The PAEA, 

however, requires that ‘‘information’’ on 

mail volumes be provided for market 

dominant products. See 39 U.S.C. 

3652(2)(A). Further, many of the 

objectives and factors that the PAEA 

directs the Commission to consider in 

establishing a regulatory system for 

market dominant products involve 

value of service considerations, either 

explicitly (see 39 U.S.C. 3622(c)(1) and 

39 U.S.C. 3622(c)(8)), or implicitly (see 

39 U.S.C. 3622(c)(3) and 39 U.S.C. 

3622(c)(4)). The most objective evidence 

of a product’s value of service is its 

price elasticity of demand. Accordingly, 

demand elasticities provide useful 

guides for evaluating how well these 

factors have been recognized in rates. 

Knowledge of price elasticities of 

demand is also essential for evaluating 

the impact of rates on allocative 

efficiency. Allocative efficiency is a goal 

embodied in 39 U.S.C. 3622(b)(1) and 39 

U.S.C. 3622(b)(5). 

The PAEA requires the Commission 

to ensure that the institutional costs of 

the Postal Service are allocated 

appropriately between market dominant 

and competitive products. See 39 U.S.C. 

3622(b)(9) and 39 U.S.C. 3633(a)(3). 

Doing so in a way that takes allocative 

efficiency into account requires the 

Commission to have knowledge of the 

relative price elasticities of both market 

dominant and competitive products.2

Elasticities of demand are also needed 

to evaluate volume forecasts for new 

products or new rate structures in 

connection with section 3622(d)(1)(C) 

proceedings, including a determination 

of whether NSAs ‘‘improve the net 

financial position of the Postal Service.’’ 

See 39 U.S.C. 3622(c)(10). 

Accordingly, proposed rule 3050.26 

would require the Postal Service to 

provide estimates of the elasticity of 

demand for all postal products for 

which adequate data can be obtained. 

The underlying econometric model of 

demand elasticity and input dataset are 

to be provided as well. The Postal 

Service would be required to update the 

model annually. 

4. Appropriate Share of Attributable and 

Institutional Costs 

The PAEA requires that the 

Commission determine whether a 

competitive product covers its 

attributable costs. This requirement 

extends to NSAs that involve 

competitive products, both domestic 

and international. See 39 U.S.C. 

3633(a)(2). In addition, 39 U.S.C. 

3622(b)(9) and 39 U.S.C. 3633(a)(3) 

require that the Commission determine 

whether competitive products 

collectively bear a minimum share of 

institutional costs that the Commission 

determines to be appropriate. To make 

an informed determination for 

competitive products as a group, it 

would be necessary to analyze factors 

that affect the institutional cost 

contributions of individual products.3

This requires knowledge of the 

attributable costs, volumes, and 

revenues associated with competitive 


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4 Developing these data might be most efficiently 

achieved by linking the relevant databases, or by 

modifying the CCCS data collection protocol. 

products, including the portion 

associated with NSAs. 

5. Service Performance 

Section 3691 of the PAEA requires the 

Postal Service, in consultation with the 

Commission, to establish and maintain 

a set of service standards for market 

dominant products. The section 

provides explicit statutory objectives for 

the service standards adopted, and 

requires a service performance 

measurement system in which the 

Commission plays a role. It also 

authorizes complaints under 39 U.S.C. 

3662 and 39 U.S.C. 3663 for violations 

of the regulations that implement these 

service standards and performance 

measurement systems. 

The Commission is deferring 

consideration of data reporting on 

service quality. Proposed rules 3050.50 

through 3050.53 are ultimately intended 

to describe the service performance 

information that would be required to 

implement the relevant provisions of 

the PAEA. When evaluation of the 

service performance measurement 

system currently under review in 

Docket No. PI2008–1 is complete, the 

Commission intends to solicit public 

comment on what data concerning 

levels of achievement of relevant service 

standards should be incorporated in 

rules 3050.50 through 3050.53. 

6. Incremental Costs 

39 U.S.C. 3633(a)(1) prohibits the 

subsidy of competitive products by 

market dominant products. In Docket 

No. RM2007–1, the Commission 

addressed this issue and determined 

that incremental costs would be used to 

test for cross-subsidies of competitive 

products by market dominant products. 

See 39 CFR 3015.7(a). Accordingly, 

proposed rule 3050.23 would require 

the Postal Service to provide estimates 

of incremental costs. The underlying 

incremental cost model, the input 

dataset, and processing programs would 

be required as well. At a minimum, the 

Postal Service must provide a model of 

the incremental costs of competitive 

products as a group. The Postal Service 

should have as a goal the development 

of a model of incremental costs for 

individual market dominant products to 

help identify cross-subsidy of one 

market dominant product by another. 

7. Universal Service Obligation 

Under 39 U.S.C. 3651, the 

Commission must annually report to the 

President and Congress assessing the 

performance of the regulatory system 

that it has implemented under the 

PAEA. The Commission is required to 

include in that report an estimate of the 

costs incurred by the Postal Service in 

meeting its legally mandated public 

service obligations. The Commission is 

specifically required to estimate the cost 

of the geographic dimension of 

universal service and the cost of 

preferred rates. See 39 U.S.C. 

3651(b)(1)(A) and (B). Under 39 U.S.C. 

3651(c), the Postal Service is obligated 

to provide such information as the 

Commission, in its judgment, considers 

necessary to prepare its report. 

The Commission is currently 

developing analyses to inform its 

estimate of the costs incurred by the 

Postal Service in meeting its legally 

mandated public service obligation. 39 

U.S.C. 3651(b)(1)(A) identifies a 

potential geographic component to that 

obligations. It directs the Commission to 

estimate the costs that the Postal Service 

incurs serving the ‘‘rural areas, 

communities, and small towns where 

post offices are not self-sustaining’’ 

referenced in 39 U.S.C. 101(b). 

Accordingly, the Commission needs to 

be able to analyze whether the 

geographic distribution of the Postal 

Service’s delivery offices, delivery 

routes, and retail counter facilities 

incurs costs that would not be incurred 

by a private provider without public 

service obligations. 

To provide the Commission with data 

from which the geographic variance in 

delivery costs and customer access costs 

could be estimated, the proposed rules 

would require that the Postal Service’s 

Annual Report provide data sufficient to 

calculate the costs incurred and the 

revenue derived from each route 

sampled by the City Carrier Cost System 

(CCCS) and the Rural Carrier Cost 

System (RCCS). The identity of the 

carrier route, type, its associated 

processing facility, and ZIP Code should 

be provided. At present, such 

information would include, for each 

sampled route, the carrier costs and the 

volume of mail delivered, by product (or 

‘‘bucket’’ of products). The ultimate 

objective would be to identify the actual 

direct and indirect costs associated with 

each route in the sample.4 Rule 3050.30 

also proposes that the Postal Service 

provide revenues generated and the 

costs incurred by each retail counter 

facility in a representative sample of 

such facilities. The applicable ZIP Code 

should be included. These information 

requirements will be re-evaluated in 

light of the results of the currently 

ongoing universal service obligation 

studies required by section 702 of the 

PAEA. 

IV. Confidential Treatment of Periodic 

Reports 

39 CFR Part 3007, proposed in Docket 

No. RM2008–1, would implement the 

provisions of the PAEA that generally 

authorize the Postal Service to designate 

information in the periodic reports that 

it provides to the Commission as 

confidential within the meaning of 5 

U.S.C. 552(b) or as commercially 

sensitive within the meaning of 39 

U.S.C. 410(c). See 39 U.S.C. 3654(f). 

Proposed part 3007 [in Docket No. 

RM2008–1] would resolve the issue of 

what information so designated, if any, 

would be made public. 

Consistent with section 504(g) of the 

PAEA, under that rule, the issue of 

public disclosure would be addressed 

by a process analogous to the process 

prescribed in rule 26(c) of the Federal 

Rules of Civil Procedure. Rather than 

treat any category of information as 

commercially sensitive per se, the 

Commission would balance the 

potential harm to the Postal Service’s 

commercial interests against the need of 

stakeholders and the public to know 

how the Postal Service is discharging its 

duties as a monopoly imbued with a 

public trust. It is also anticipated that 

flexible remedies provided for by rule 

26(c), such as the imposition of 

protective conditions or selective 

redaction of documents, would be 

available under the Commission’s 

confidentiality rules. 

V. Content of the Postal Service’s 

Periodic Data Reports Under the PAEA 

A. The Cost and Revenue Report and 

the Cost Segments and Components 

Report 

The Commission’s proposed rules 

would require the Postal Service to 

provide summaries of cost, volume, and 

revenue data in its annual report, 

primarily to comply with 39 U.S.C. 

3652. These would consist of the CRA 

and the CSC reports, presenting costs, 

volumes, and revenues by market 

dominant product and by competitive 

product. They would include a separate 

line item for each market dominant 

international product and each 

competitive international product in the 

Mail Classification Schedule. 

B. Format of Documentation Supporting 

the CRA and CSC Reports 

Supporting documentation for the 

CRA and the CSC reports should present 

costs, volumes, and revenues as defined 

in the current Mail Classification 

Schedule, and by each product’s 


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5Most of these data are to be developed quarterly, 

but provided annually. This will enable the 

Commission to analyze data by fiscal year for the 

purpose of the annual compliance report, and by 

calendar year, which aligns with Universal Postal 

Union (UPU) rate cycles. 

6 In Docket No. R2008–1, the first rate adjustment 

under price cap regulation, the Postal Service 

treated all special services and fees (domestic and 

international, market dominant and competitive) as 

one market dominant class of mail called ‘‘Special 

Services.’’ 

7 If these classification refinements were made, 

they would have to be accomplished through 

amendments to the Mail Classification Schedule. 

constituent rate categories. At least for 

the first several years under the PAEA, 

the Commission proposes that the Postal 

Service’s annual report present this 

information in an alternative format as 

well. This format would present costs, 

volumes, and revenues by product and 

rate category, reflecting the 

classification structure that was in effect 

immediately prior to the 

implementation of the PAEA. See 

proposed rule 3050.14. This is 

illustrated by the appendix appendix to 

this Notice [and Order] labeled 

‘‘Products and Categories.’’ This 

disaggregated format would provide the 

Commission and the interested public 

with ‘‘building blocks’’ that are suitable 

for multiple purposes. The alternative 

format would allow the CRA data to be 

configured to coincide with the current 

Mail Classification Schedule, and, with 

modest effort, almost any foreseeable 

future modification of that schedule. At 

the same time, it would allow the CRA 

data to be configured to coincide with 

the historical classification structure. 

This should help ensure analytical 

consistency over time and across 

categories. It would facilitate historical 

continuity in financial reporting, and 

give the Commission and the interested 

public the ability to track trends in the 

financial data and make it easier to 

identify and analyze anomalies, should 

they appear. Presenting disaggregated 

data in this historical format will 

provide a particularly helpful reference 

point if the product lists under the 

PAEA undergo frequent refinement in 

the first few years of the new regulatory 

regime. The Commission recognizes that 

there may be obstacles, such as 

inadequate volume, that make it 

impractical to separately estimate 

attributable costs for some rate 

categories. For such rate categories, the 

Postal Service should include volume 

and revenue figures, where available, 

and provide a footnote in the 

attributable cost column explaining the 

reasons that separate attributable costs 

could not be estimated, or a suitable 

proxy could not be found. 

C. Information Required for 

International Mail 

1. Level of Disaggregation 

Since disaggregated cost, volume, and 

revenue data on international mail 

would be integrated into the CRA and 

CSC reports for the first time under the 

proposed reporting rule, a discussion of 

the information required for 

international products will be helpful. 

The proposed rules would require the 

Postal Service to provide volumes, 

revenues, costs, weight, and data on 

outbound and inbound international 

mail. See proposed rules 3050.22(d)(8) 

through (11). Cost, volume, and revenue 

data would be broken out by product, as 

defined in the current Mail 

Classification Schedule, and by each 

product’s constituent rate categories. 

Supporting documentation should also 

present costs, volumes, and revenues in 

the alternative, more disaggregated 

format illustrated in the appendix to 

this Notice labeled ‘‘Products and 

Categories.’’ 5 For outbound and 

inbound international First-Class Mail, 

data would be reported separately by 

terminal dues regime (‘‘target 

countries,’’ ‘‘transition countries,’’ and 

bi-lateral agreements). The underlying 

country-specific data are to be provided 

in back-up documentation. This will 

allow the Commission to determine 

whether revenues cover costs at this 

level of disaggregation. 

The required reporting on 

international products will be more 

complex under the PAEA than it was 

under the PRA, due primarily to the 

need to identify all international 

services as either market dominant or 

competitive. Some international 

services will have both market 

dominant and competitive components, 

depending upon whether they are 

outbound or inbound, surface or air, 

single-piece or bulk, and whether the 

rates charged are UPU rates or non-UPU 

rates. Inbound Parcel Post data, for 

example, should be shown separately 

for the category subject to UPU rates, 

and for those categories whose rates 

were negotiated bilaterally. 

2. Ancillary International Services 

The current draft Mail Classification 

Schedule treats Ancillary Services for 

international mail categories as a single 

product. The Commission notes that 

defining these services in aggregate as a 

‘‘product’’ is a decision that might 

warrant further examination. Its 

component services are so 

heterogeneous as to raise questions 

about the validity of treating them as a 

coherent product with common cost or 

demand characteristics. The regulatory 

scheme that the Commission has 

implemented under the PAEA will work 

best if each defined product has cost or 

demand characteristics that can be 

meaningfully quantified. In pursuit of 

this goal, International Ancillary 

Services might need to be organized into 

smaller, more homogenous groupings. 

In the alternative format required by 

proposed rule 3050.14, these Ancillary 

Services would be disaggregated. One of 

the benefits of the alternative format is 

that it would facilitate analysis of 

alternative treatments of Ancillary 

Services. 

3. Treatment of Fees Associated With 

International Mail 

The treatment of fees associated with 

international mail categories in the 

current draft Mail Classification 

Schedule might warrant further 

examination as well. The current draft 

Mail Classification Schedule treats them 

as free-standing products. Where no 

identifiable attributable cost is 

associated with a fee-based service 

feature, its costs are likely to be 

reflected in the host product’s 

attributable costs. To balance revenues 

with costs, it may be more appropriate 

to group such fees with their host 

product than to treat them as freestanding products. The disaggregated 

format illustrated in the appendix to 

this Notice would facilitate analysis of 

alternative treatments of fees associated 

with international products. 

The current draft Mail Classification 

Schedule separates international Special 

Services into market dominant and 

competitive categories, but it associates 

all domestic Special Services with the 

market dominant group, even though 

some domestic Special Services are 

purchased and used in conjunction with 

competitive products.6 It may be more 

appropriate to separate domestic Special 

Services into competitive and market 

dominant categories. Although there 

may be more rational ways to group data 

for Ancillary Services and for Special 

Services, doing so is likely to require 

changes to the Mail Classification 

Schedule.7

D. Preferred Rate Mail 

The Commission proposes that the 

CRA and the CSC reports filed annually 

by the Postal Service show separate 

volumes and revenues for each category 

of preferred-rate mail (e.g., Standard 

Regular Nonprofit, Standard ECR 

Nonprofit, Outside County Nonprofit, 

Outside County Classroom, Library), 

even if that category is not defined as a 

separate ‘‘product.’’ See 39 U.S.C. 3626. 

This would allow the Commission to 


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8These terms are defined in proposed rule 

3050.1. 

9Under the formal hearing procedures of the 

PRA, an omnibus rate case would typically be 

treated as a trial de novo, in which the Postal 

Service would present witnesses supporting all 

essential aspects of its case—even those that had 

not changed since they were last litigated—and 

intervenors would challenge elements of the Postal 

Service case, even where the Commission had 

approved them in previous litigation. The result 

was that a good deal of documentation provided in 

omnibus rate hearings was redundant of prior 

omnibus rate hearings. 

comply with the requirement in section 

3651(b)(1)(B) of the PAEA that it 

estimate the ‘‘cost’’ (which the 

Commission interprets to mean the 

revenue foregone by) of offering 

preferred rates as a component of the 

cost of the universal service obligation. 

E. Brief Narrative Explanation 

The Commission proposes that the 

Postal Service provide, by July 1 of each 

year, a succinct description of the 

analytical principles that have been 

used to arrive at the estimates in the 

most recent ACD and the reasons that 

those principles have been accepted. 

The summary level of description and 

explanation would be equivalent to that 

which the Postal Service traditionally 

provided with respect to attributable 

costs in Library Reference 1 in the final 

omnibus rate case processed under the 

PRA, Docket No. R2006–1. These short 

descriptions of principles and reasons 

should be provided for all areas of 

analysis, including cost attribution, cost 

avoidance, demand analysis, and 

service performance measurement. This 

requirement is found in proposed rule 

3050.60(f). Proposed rule 3050.13 would 

require the Postal Service, at the time 

that it files its Annual Report, to 

identify and describe any changes in the 

analytical principles that have been 

accepted since the most recent ACD, 

and the rationale supporting each 

change. 

F. Supporting Documentation Required 

When Analytical Principles or 

Quantification Techniques Have 

Changed 

Beyond the basic data summaries and 

the brief explanation of methods 

required by proposed rules 3050.22 

through 3050.26, no supporting 

documentation in the Postal Service’s 

Annual Report would be required 

unless the input data, quantification 

techniques, or analytical principles 

applied have changed since the most 

recent ACD was issued.8 If input data, 

quantification techniques, or analytical 

principles have changed, the new data 

and a description of the changes to 

quantification techniques must 

accompany the report. See proposed 

rules 3050.2 and 3050.13. As will be 

described in more detail below, changed 

analytical principles will have to have 

been approved in advance by the 

Commission in a rulemaking proceeding 

designed for that purpose and 

documented as part of that rulemaking. 

Proposed rules 3050.22 through 

3050.26 list the information items that 

would be required to be included in the 

annual report if all of the items listed 

were to have changed since the relevant 

baseline. As noted above, under normal 

circumstances, the relevant 

methodological baseline would be the 

methods accepted by the Commission in 

its most recent ACD. 

Because the proposed periodic 

reporting rules are designed to require 

the Postal Service to provide supporting 

detail only where quantification 

techniques or analytical principles have 

changed with respect to the baseline, 

they would eliminate the redundant 

documentation that was often presented 

in an omnibus rate case under the 

procedures of the PRA.9

G. More Frequent Periodic Reports 

As with current rule 102, the 

proposed periodic reporting rule 

requires the Postal Service to provide 

certain reports on a more frequent than 

annual basis. Most of the more 

frequently reported items support the 

Postal Service’s Annual Report. They 

would assist the Commission in 

performing its duty under 39 U.S.C. 

3653 to annually produce a 

determination on the extent to which 

the rates and fees charged and the 

service provided by the Postal Service 

in the reporting year complied with the 

provisions of chapter 36 of title 39 [of 

the U.S. Code]. Due to the short time 39 

U.S.C. 3653 allows the Commission to 

produce its compliance determination, 

it is necessary for the Commission to 

stay as current as possible on the 

financial and operating performance of 

the Postal Service as the reporting year 

unfolds. More frequent reporting of 

some items will also enhance 

transparency and accountability by 

helping mailers determine whether 

there are likely to be grounds for filing 

a complaint under 39 U.S.C. 3662. 

Accordingly, under the proposed rules, 

items such as the Postal Service’s 

Revenue and Expense Summaries 

Report and the National Consolidated 

Trial Balances will be required after the 

close of each fiscal month. 

Revenue Pieces and Weight (RPW) 

reports, Quarterly Statistics Reports, and 

billing determinants would be required 

after the close of each fiscal quarter. See 

proposed rule 3050.25. These quarterly 

reports are needed to help the 

Commission prepare its annual report 

under 39 U.S.C. 3651 which evaluates 

how the system embodied in its 

regulations is working. In particular, 

quarterly volume and revenue data 

would help the Commission evaluate 

how well its price cap regulations are 

working by allowing it to construct 

hybrid evaluation years that better align 

price and classification changes with 

their volume and revenue effects. 

Quarterly data on volumes and revenues 

also will be needed if the Postal Service 

files a request for rate or classification 

changes outside the normal annual 

cycle. 

H. Postal Service Compliance Analysis 

39 U.S.C. 3652(a)(1) states that the 

Postal Service shall provide the 

Commission with a report 

which shall analyze costs, revenues, rates, 

and quality of service, * * * in sufficient 

detail to demonstrate that all products during 

such year complied with all applicable 

requirements of this title[.] 

This language requires the Postal 

Service’s report to analyze the data it 

provides in sufficient detail to 

demonstrate that all of its products 

(market dominant and competitive) 

complied with all of the requirements of 

title 39 [of the U.S. Code]. The Postal 

Service, therefore, is to provide a 

compliance analysis with its Annual 

Report that is both broad in scope— 

covering all requirements of title 39— 

and specific to each product. Proposed 

rule 3050.20 implements the analysis 

requirement of 39 U.S.C. 3652(a)(1). 

VI. Level of Detail Required in the 

Postal Service’s Annual Report 

In most instances where the PAEA 

requires the Commission to produce 

reports or evaluations, the PAEA directs 

the Postal Service to provide the 

Commission with the information that 

the Commission considers necessary to 

prepare the reports required. See 39 

U.S.C. 3651(c), 3652(d), 3651(e)(2), and 

3654(e). In order to determine whether 

the rates and service that the Postal 

Service implements complied with the 

standards of the PAEA, the Commission 

believes that the information that the 

Postal Service includes in its Annual 

Report must be supported by 

workpapers at a level of detail that is 

comparable to the documentation that 

existing rule 54 would have required to 

support the initial filing in an omnibus 

rate case under the PRA. The proposed 

rules would require, for example, that 

the Postal Service provide the ‘‘B’’ 

workpapers, which show the 


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10 It is important to distinguish the range of 

information items that would be required in the 

annual report from the level of detail that would be 

required in those various items. The range of items 

that the Postal Service would have to document in 

its annual report under the proposed rules is likely 

to be considerably more narrow than if it were filing 

an omnibus rate request under the PRA, since it 

would be limited to data and analyses that have 

changed relative to the baseline. 

11The technical definition of ‘‘analytical 

principle’’ is found in proposed rule 3050.1(b): ‘‘a 

particular economic, mathematical, or statistical 

theory, precept, or assumption applied by the Postal 

Service in producing a periodic report to the 

Commission.’’ Any data entry or manipulation 

technique whose validity does not depend on the 

acceptance of a particular economic, mathematical, 

or statistical theory, precept, or assumption is a 

mere ‘‘quantification technique.’’ See proposed rule 

3050.1. 

12The technical definition of ‘‘accepted analytical 

principle’’ is an ‘‘analytical principle applied by the 

Commission in its most recent Annual Compliance 

Determination, unless different analytical 

principles have been accepted by the Commission 

in a final rule that becomes effective prior to the 

filing of the Postal Service’s Annual Report.’’ See 

proposed rule 3050.1. 

distribution of directly attributable costs 

by cost segment and component.10

The proposed rule would require that 

estimates that were developed using 

electronic spreadsheets be supported 

with those spreadsheets, and that those 

spreadsheets display the formulas used 

and their links to related spreadsheets. 

As in current rule 54, the proposed rule 

would require that documentation be 

provided in a form that can be read by 

publicly available PC software. It would 

also require that if a processing program 

were developed specifically to produce 

an accompanying workpaper, it would 

have to be provided in a form that could 

be executed by publicly available PC 

software. See proposed rule 3050.2. 

Unlike an omnibus rate case, the 

Postal Service would not have to 

document analytical principles used in 

its annual compliance report to the 

Commission with testimony. If the 

Postal Service seeks to change the 

analytical principles that it used in its 

most recent annual report provided 

under the PAEA, the proposed rules 

would require it to justify the change in 

an informal rulemaking prior to filing its 

annual report. 

VII. Analytical Principles To Be 

Applied in the Postal Service’s Annual 

Report 

39 U.S.C. 3652(e) requires the 

Commission to ‘‘prescribe the content 

and form of the public reports * * * to 

be provided by the Postal Service under 

this section.’’ The proposed rules would 

distinguish between data entry and 

manipulation techniques whose validity 

depends on specific ‘‘analytical 

principles’’ and those that do not. An 

analytical principle is a conceptual or 

theoretical approach approved by the 

Commission for collecting data, 

attributing costs to subclasses, or 

estimating a product’s avoided cost, 

elasticity of demand, or average 

revenue.11 Under the proposed rule, the 

Postal Service’s Annual Reports would 

employ ‘‘accepted analytical 

principles’’—principles that the 

Commission applied in its most recent 

ACD, to estimate volumes, revenues, 

attributable costs, and avoided costs.12

The most recently completed ACD 

would serve as the methodological 

baseline for the subsequent Annual 

Report unless the Postal Service had 

obtained prior approval from the 

Commission to change the analytical 

principles that it employs. 

A proposal to change an accepted 

analytical principle would require an 

informal rulemaking to evaluate the 

proposal, and an acceptance of the 

proposal by the Commission. See 

proposed rule 3050.11. Under normal 

circumstances, this process would have 

to be completed and a final rule 

published in the Federal Register at 

least 30 days in advance of the filing of 

the Annual Report. See 5 U.S.C. 553(d). 

If the Postal Service’s Annual Report 

corrects calculations in the most recent 

ACD, or changes the quantification 

techniques used to make those 

calculations, the Postal Service must 

accompany its compliance report with a 

list of such changes and a brief 

explanation of each. See proposed rule 

3050.2. 

A. The Distinction Between ‘‘Analytical 

Principles’’ and Other Elements of 

Analyses Supporting the Annual 

Compliance Report 

Under the proposed rules, changes in 

accepted analytical principles must be 

reviewed and accepted by the 

Commission in advance. In contrast, 

correcting an error or changing a 

quantification technique used in the 

baseline methodology would only 

require notice and a brief explanation at 

the time that an annual compliance 

report is filed with the Commission. See 

proposed rule 3050.2. Updating data 

used in a baseline methodology would 

require no justification, if done in a 

neutral and balanced way. 

The following guidelines illustrate the 

distinction between a change in an 

accepted analytical principle and less 

significant changes requiring simpler 

procedures, such as an update of input 

data, a correction, or a change in 

quantification technique. 

1. Updates 

Plugging more recently collected data 

into an otherwise unchanged model or 

analysis is neither a change in 

quantification technique nor a change in 

the analytical principles applied. 

2. Corrections 

Correcting a spreadsheet that 

misidentifies a row or column, or 

applies a formula to the wrong cell, 

would not be a change in quantification 

technique nor a change in the analytical 

principle applied. 

3. Quantification Techniques 

Examples of changes to quantification 

techniques include consolidating 

multiple spreadsheets into one, using 

spreadsheet figures that are linked 

rather than hardcoded, changing 

mainframe SAS to PC SAS, and 

changing from database management 

software from Access to Oracle. Such 

changes should not change the concept, 

theory, assumptions, or results of an 

analysis. 

4. Data Collection 

Changing the sample frame, sample 

size, sampling technique, or definition 

of a data element used as input data in 

an analysis would constitute a change to 

an analytical principle. For example, the 

changes made by the Postal Service in 

its Management Operating Data System 

(MODS) by discontinuing weighing of 

mail to obtain an estimate of First 

Handled Pieces, and changes made after 

FY 2007 in the City Carrier Cost System 

discontinuing the collection of stop- and 

route-type information would constitute 

changes in baseline analytical 

principles. Each of these changes have 

potentially major impacts on any 

analysis of mail processing or carrier 

street time cost causation. 

Changing the definition of a data 

element to reflect changes in operations, 

however, would not constitute a change 

to an analytical principle. For example, 

if the Postal Service were to forbid 

mailers to enter mail in sacks for 

operational reasons, it could 

discontinue collecting data on the use of 

sacks as a container type for purposes of 

determining the subclass distribution of 

variable mail processing costs for mixed 

mail without review of the change in an 

informal rulemaking. 

5. Analysis 

Changing a data editing technique, 

economic assumption, functional form, 

model specification, or regression 

evaluation technique would constitute a 

change in an analytical principle. 

Similarly, changing a formula used in a 

spreadsheet analysis would constitute a 


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13Currently, in most respects, these coincide with 

the set of analytical principles used in the most 

recent omnibus rate case brought under the PRA 

(Docket No. R2006–1). 

change in an analytical principle. Using 

a more recent measure of an input used 

in a volume variability model (such as 

an updated deliveries-per-stop or 

deliveries-per-square mile in a street 

time variability model) would not. 

Similarly, if the Postal Service wanted 

to update its purchased transportation 

cost variability study by updating its 

calculation of average cubic foot miles 

or average length of haul for various 

transportation segments without 

changing the form or specification of the 

underlying econometric model, it would 

not constitute a change in an established 

analytical principle, and would not 

require review in a rulemaking. 

Updating an estimated price elasticity 

for a given mail product by using (in a 

consistent manner) more recent DRI 

forecasts for various macroeconomic 

control variables already present in an 

accepted econometric model of demand 

would not constitute a change in an 

accepted analytical principle, and 

would not require review in a 

rulemaking. 

6. Cost Avoidance 

Changing the classification of cost 

pools, or the rate categories used as 

benchmarks or proxies, would 

constitute a change in accepted 

analytical principles. 

7. Special Studies 

A special study that follows a 

reviewed and approved design would 

not constitute a change in analytical 

principles if it were used to update such 

things as: 

• MODS machine productivities; 

• Accept rates; 

• Productive hourly wage rates; 

• Premium pay factors; 

• Operation-specific piggyback 

factors; 

• Entry profiles; and 

• Shape breakouts of unit attributable 

costs. 

However, special studies must be 

reviewed and accepted in an informal 

rulemaking if they use data collection or 

analytical methods that were not 

accepted by the Commission in its most 

recent Annual Compliance 

Determination. 

B. Procedures for Changing Analytical 

Principles Used To Collect and Analyze 

Data in the Postal Service’s Annual 

Report 

The PAEA lodges with the 

Commission ultimate responsibility for 

selecting appropriate input data and 

analytical methods to be used in the 

Postal Service’s Annual Report. See 39 

U.S.C. 3652(e). Accordingly, the 

Commission’s proposed reporting rules 

would be more prescriptive than the 

current rules with respect to the data 

and methods that underlie the Postal 

Service’s Annual Report. 39 U.S.C. 

3652(e)(2) provides that the Commission 

may ‘‘on its own motion or on request 

of an interested party, initiate 

proceedings * * * to improve the 

quality, accuracy, or completeness of 

Postal Service data required by the 

Commission under this subsection 

* * * .’’ Selecting the analytical 

principles to be used in accounting for 

costs, revenues, or volumes falls within 

the definition of a ‘‘rule’’ for purposes 

of the APA. See 5 U.S.C. 551(4). 

Therefore, the procedures that the 

Commission proposes for changing 

Commission-approved methods for 

collecting and analyzing data of this 

kind are those of an informal 

rulemaking under section 553 of the 

APA. 

The Commission believes that one of 

the important benefits of the PAEA is 

the freedom that it gives the postal 

community to decide analytical issues 

in a non-adversarial context. Under the 

PRA, analytical issues were decided 

employing a litigation model. Under 

that model, the Commission was 

required to resolve an analytical issue 

by accepting or rejecting competing 

analyses submitted by opposing 

witnesses. In some instances, the 

Commission would cobble together a 

solution from analytical elements 

proffered by rival witnesses. In almost 

all cases, analyses were presented as 

faits accomplis, with no opportunity for 

input or feedback from either the 

Commission or interested third parties. 

The process was cumbersome and the 

results were often less than satisfactory. 

Under the PAEA, the Commission 

expects that the Postal Service will 

continue to take the lead in deciding 

how data about its finances, operations, 

and performance will be collected and 

analyzed. But because analytical issues 

can be addressed in the context of 

informal rulemakings under the PAEA, 

an opportunity for input and feedback 

from other stakeholders and the 

Commission can be provided. The 

Commission proposes to take advantage 

of that opportunity by approaching 

analytical issues through a process that 

promotes cooperation and facilitates 

consensus. 

39 U.S.C. 3652(e)(2) authorizes the 

Commission to initiate proceedings 

designed to improve the data in the 

Postal Service’s annual reports ‘‘on its 

own motion or at the request of an 

interested party.’’ In keeping with the 

intent of 39 U.S.C. 3652(e)(2), a proposal 

to change accepted analytical principles 

may be submitted by the Commission, 

the Postal Service, or other interested 

parties. 

The Commission will exercise its 

discretion in deciding whether a 

proposal to change accepted analytical 

principles justifies the initiation of a 

rulemaking, based on a consideration of 

the potential benefits to the quality of 

the information available to the postal 

community and the time and resources 

likely to be expended in the inquiry. If 

the proposal presents a persuasive 

argument that a change in accepted 

analytical principles is needed, the 

Commission will initiate a docket by 

publishing a notice of proceeding in the 

Federal Register and on the 

Commission’s Web site. 

The procedures proposed are highly 

flexible, and would vary according to 

the complexity of the proposed change 

and the level of documentation 

supporting it. The Commission expects 

that, for the most part, proposals to 

change established analytical principles 

will be data intensive and technically 

oriented. It believes that review of such 

proposals can be done more quickly and 

efficiently if they emphasize informal 

‘‘discovery’’ procedures at the initial 

stages, where clarification of technical 

issues is often needed, and reserve more 

formal written commentary for later 

stages. 

C. Nature of Rulemakings That Review 

Analytical Principles Used To Prepare 

Periodic Reports 

The metrics by which the Postal 

Service’s compliance with the PAEA is 

determined depend, importantly, on the 

analytical principles that the Postal 

Service uses to prepare its periodic 

reports to the Commission. As noted, 

the analytical principles used in the 

Commission’s most recent ACD would 

serve as the methodological baseline.13

These would be changed through the 

informal rulemaking procedures 

prescribed by section 553 of the APA. 

Such rulemakings are likely to take 

different forms, as circumstances 

require. Examples of the forms they 

could take are discussed below. All of 

these forms could be accommodated by 

the generic procedures provided for in 

proposed rule 3050.11. 

1. Strategic Rulemakings 

A strategic rulemaking would be 

designed to make the ongoing 

development of analysis in cost 

causation or other areas of analysis as 

orderly and efficient as possible. It 

would take an inventory of longer-term 


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data collection and analysis needs. It is 

likely to involve plans to meet those 

needs over a horizon longer than a year. 

It might focus on existing data 

collection systems that need to be 

improved or new data collection 

programs that need to be established. It 

might list existing analytical studies that 

need to be updated, or new analytical 

studies that need to be undertaken. The 

scope of a strategic rulemaking would 

be broad, since one of its purposes 

would be to compare the likely cost and 

benefits of improved data or analysis in 

different areas of research, and the lead 

time required to conduct the research. 

The purpose would be to prioritize 

research projects and draw up a 

tentative schedule for conducting them. 

A strategic rulemaking is likely to be 

general in focus and exploratory in 

nature in its early stages. Accordingly, 

the procedures followed would be quite 

flexible. They might begin with the 

equivalent of a prehearing conference in 

which interested parties identify areas 

in which research is most needed and 

most likely to bear fruit. Once a strategic 

rulemaking has identified and 

prioritized areas of needed research, it 

would then narrow its focus to specific 

data to be gathered or studies to be 

performed. The Notice of Proposed 

Rulemaking would be expected to 

culminate in Commission approval of a 

list of research projects to be undertaken 

and a preliminary projected time table 

for their completion. 

2. Discrete Issue Rulemakings 

Discrete issue rulemakings would 

address the data requirements, 

analytical methods, and timetable to be 

followed in researching a single 

analytical issue or closely-related set of 

issues. At this stage, specific research 

projects are likely to be proposed in the 

form of specific tasks, and the merits of 

the projects discussed. Initially, this 

discussion is likely to take place in the 

context of informal technical 

conferences. When the goals and 

methods to be employed by proposed 

research projects have been welldefined, their merits may be discussed 

in written comments in response to a 

notice of proposed rulemaking. An 

example would be a rulemaking 

addressing needed corrections and 

improvements to the Commission’s 

Docket No. R2006–1 Periodicals cost 

model, which were examined in a 

preliminary way in Docket No. ACR 

2007. In the system being proposed, the 

need for a study of these issues, its 

feasibility, and its priority, would 

ordinarily have been identified in an 

earlier strategic rulemaking. 

The timetable for the study would be 

determined by its scope and complexity. 

The process might begin with a written 

proposal by the proponent of the study 

to focus evaluation of the study by 

others. The Commission might then give 

its preliminary approval of the study 

plan, and keep the rulemaking docket 

open to receive progress reports, and 

evaluate interim results. A final rule 

would issue when the Commission 

accepts one or more new analytical 

principles. 

3. Expedited Rulemakings 

Expedited rulemakings would be 

designed to identify and make needed 

improvements in the data and methods 

that the Postal Service uses to produce 

its most recent Annual Report. Although 

they could be initiated by the 

Commission or an interested person, in 

most instances, it is anticipated that the 

Postal Service would take the initiative 

to harmonize its methods and analysis 

with those approved in the 

Commission’s most recent annual 

compliance determination. This kind of 

rulemaking would focus on near-term 

improvements to data and analysis that 

could be made in time to be 

incorporated in the Postal Service’s next 

Annual Report. The relatively narrow 

window of time available for completing 

a compliance-oriented rulemaking is 

likely to limit such rulemakings to 

studies that are modest in scope and 

straightforward to implement. Where 

expedition requires it, discovery may 

take the form primarily of oral questions 

answered in real time, such as informal 

technical conferences. 

D. Form and Content of a Proposal To 

Change an Analytical Principle 

At a minimum, a proposal should 

identify the established principle that 

needs to be reviewed, explain its 

perceived deficiencies, and suggest how 

those deficiencies might be remedied. If 

a proposal offers a specific alternative 

method of collecting or analyzing data, 

it should include the data, analysis, and 

documentation on which it is based. 

While an estimate of the impact of the 

proposed change on the estimated 

attributable cost, avoided cost, elasticity 

of demand, average revenue, or service 

attainment of affected postal products 

would not be mandatory, such an 

estimate would improve the likelihood 

that the Commission will treat the 

proposal as ready for a final round of 

comment and possible adoption. 

The Commission’s response to a 

proposal would depend on the 

circumstances—for example, how 

specific and concrete the proposed 

alternative principle is, and the level of 

documentation accompanying it. If the 

Commission concludes that the 

proposal makes a persuasive argument 

that a change in an accepted analytical 

principle would be beneficial and 

therefore is suitable for review, it would 

establish a review docket. Having 

opened a review docket, the 

Commission could ask the proponent to 

provide additional clarification of its 

criticism of the established principle, or 

to provide supporting documentation 

for its proposed alternative. The 

Commission could also ask for a written 

response from the Postal Service or the 

interested public. 

If the Commission considered such 

preliminary steps unnecessary but 

perceived a need to clarify the basis for 

the proponent’s criticism of the 

accepted principle, to clarify the basis of 

its proposed alternative, or to clarify 

what relevant data are available, the 

Commission could ask the proponent of 

the change to provide one or more 

sponsoring analysts to respond to 

questions from the Commission’s 

technical staff, the Public 

Representative, and interested parties in 

a technical conference format. 

Depending on the circumstance, the 

format of a technical conference may be 

informal, where no transcript would be 

kept, or formal, where a detailed agenda 

would be followed and a transcript kept. 

The former might be more suitable 

where the focus is on the availability of 

relevant data. The latter might be more 

suitable where expert opinion is sought 

as well. Even where the Postal Service 

is not the proponent of a change in an 

accepted analytical principle, the 

Commission might ask it to provide one 

or more experts on the subject matter of 

a proposal in a technical conference 

format concerning the merits of the 

proposal or to explain what data and 

analyses are available or could be made 

available to investigate the proposed 

alternative. The Commission may also 

arrange for a panel of outside experts to 

provide written statements, participate 

in a technical conference, or give 

depositions, at any stage of discovery 

where such assistance would be helpful. 

If the Commission were to determine 

that a proposal is well defined, 

adequately documented, and ready for 

final evaluation, it would publish a 

notice of proposed rulemaking and seek 

final written comments from interested 

parties. Until such a notice is issued, the 

proposed rules allow the Commission 

broad discretion in selecting appropriate 

procedures to follow on a case-by-case 

basis. 

The intent of proposed rule 3050.11 is 

to resolve all issues raised by proposed 

changes in analytical principles 


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efficiently, well in advance of the filing 

of the Postal Service’s Annual Report. 

This should streamline the processing of 

the Postal Service’s report when it is 

received. Proposed rule 3050.11 does 

not impose a particular lead time on the 

petitioning for or completing a 

proceeding to change an accepted 

analytical proceeding. As a practical 

matter, however, if complex or 

controversial changes to established 

analytical principles are proposed, they 

would need to be started well in 

advance of the due date of the Annual 

Report if the goal is to use them in the 

report. 

VIII. Section-by-Section Analysis of 

Proposed Rules 

Proposed rule 3050.1 provides 

definitions for key terms used in the 

proposed regulations. 

Proposed rule 3050.2 sets forth 

general standards for documenting the 

Postal Service’s periodic reports to the 

Commission. 

Proposed rule 3050.3 defines the 

scope and terms of Commission access 

to information in the custody of the 

Postal Service and its Inspector General. 

Proposed rule 3050.10 requires the 

Postal Service to use analytical 

principles that are accepted by the 

Commission to prepare an annual report 

to the Commission. 

Proposed rule 3050.11 sets forth the 

procedures by which changes to 

accepted analytical principles may be 

adopted. 

Proposed rule 3050.12 requires the 

Postal Service to indicate whether each 

special study relied on in its annual 

report to the Commission is current and 

valid, is in the process of being updated, 

or should be excused from the 

requirement that it be current and valid. 

Proposed rule 3050.13 requires the 

Postal Service to include in its annual 

report to the Commission a brief 

narrative that describes any changes that 

have been made to accepted analytical 

principles since the Commission’s most 

recent Annual Compliance 

Determination was issued, and the 

rationale for making the change. 

Proposed rule 3050.14 requires the 

Postal Service to present its Cost and 

Revenue Analysis report in a format that 

corresponds to the classification 

structure in the current Mail 

Classification Schedule, and in an 

alternative, more disaggregated format 

that can be used to reformat the results 

to match the classification structure that 

was in effect immediately prior to the 

adoption of the Postal Accountability 

and Enhancement Act. 

Proposed rule 3050.20 requires the 

Postal Service’s annual report to the 

Commission to analyze the degree to 

which its products met the policies of 

title 39 of the United States Code. 

Proposed rule 3050.21 prescribes 

specific categories of data to be included 

in (the content of) the Postal Service’s 

annual report to the Commission. 

Proposed rule 3050.22 prescribes the 

documentation required to support the 

attributable cost estimates in the Postal 

Service’s annual report. 

Proposed rule 3050.23 requires the 

Postal Service to accompany its annual 

report with a documented model of 

incremental costs. 

Proposed rule 3050.24 prescribes the 

documentation required to support the 

avoidable cost estimates in the Postal 

Service’s annual report. 

Proposed rule 3050.25 requires the 

Postal Service, each quarter, to provide 

the Commission with its RPW report, its 

Quarterly Statistics Report and billing 

determinants. It also requires the Postal 

Service to accompany its annual report 

with the annual version of the RPW 

report. 

Proposed rule 3050.26 requires the 

Postal Service, by January 20 of each 

year, to provide the Commission with 

econometric estimates of elasticity of 

demand for all postal products and to 

document the econometric models that 

were used to produce them. 

Proposed rule 3050.27 requires the 

Postal Service to file its Workers’ 

Compensation Report and summary 

workpapers by March 1 of each year. 

Proposed rule 3050.28 requires the 

Postal Service to provide the National 

Consolidated Trial Balances, National 

Payroll Hours Summary, the OPRES 

report, and the HAT report, within 15 

days of the close of the relevant period 

(month or pay period). 

Proposed rule 3050.30 requires the 

Postal Service to provide, by March 31 

of each year, information from which 

the geographic dimension of the 

universal service obligation in the 

processing, delivery, and retail 

functions can be measured. 

Proposed rule 3050.31 requires the 

Postal Service to provide the 

Commission with its Annual Report of 

the Postmaster General, Congressional 

Budget Submission, and Integrated 

Financial Plan within specified 

intervals after their approval or release. 

Proposed rule 3050.40 requires the 

Postal Service to provide the 

Commission with various financial 

reports corresponding in content and 

timing to those that public corporations 

provide to the Securities and Exchange 

Commission. 

Proposed rule 3050.41 requires the 

Postal Service to provide the 

Commission with an independent audit 

of the reports required by proposed rule 

3050.40, and supporting documentation. 

Proposed rule 3050.42 authorizes the 

Commission, on its own or at the 

request of interested persons, to initiate 

proceedings to improve the quality of 

the financial information provided 

under proposed rule 3050.40. 

Proposed rule 3050.43 requires the 

Postal Service to accompany its annual 

report to the Commission with the 

comprehensive statement, the 

performance plan, and the program 

performance reports required by 39 

U.S.C. 2401(e), 2803, and 2804, 

respectively. 

Proposed rules 3050.50 through 

3050.53 are reserved. 

Proposed rule 3050.60 lists 

miscellaneous reports that the Postal 

Service is to provide to the Commission. 

These include a succinct description of 

the methods used, and the reasons for 

selecting the methods used, to produce 

the most recent Annual Compliance 

Determination. This is to be provided by 

July 1 of each year. Also to be provided 

by July 1 of each year is an update of 

the history of changes in postal 

volumes, revenues, and rates that the 

Postal Service provided in Docket No. 

R2006–1. In addition, the Postal Service 

is to provide a master list and electronic 

copies of publications, handbooks, and 

data collection forms both at the 

beginning of each year and when 

changed; the Household Diary Study 

when it is completed; and Total Factor 

Productivity estimates and 

documentation, by March 1 of each 

year. 

Appendix [Illustrative list referred to in 

part V.B. of Supplementary 

Information] 

PRODUCTS AND CATEGORIES

Market Dominant Products 

Domestic First-Class Mail: 

Single-Piece: 

Letters 


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PRODUCTS AND CATEGORIES—Continued 

Flats 

Parcels 

Total Single-Piece Letters, Flats & Parcels 

Presort: 

Letters 

Flats 

Parcels 

Total Presort Letters, Flats & Parcels 

Automation: 

Letters 

Flats 

Parcels 

Total Automation Letters, Flats & Parcels 

Total Letters, Flats & Parcels 

Single-Piece Cards: 

Presort Cards 

Automation Cards 

Total Cards 

Total Domestic First-Class Mail 

International First-Class Mail: 

Outbound Single-Piece Letters, Flats, International Parcel Post, and Parcels: 

Air: 

UPU Target System Countries 

UPU Transition System Countries 

Subject to bi-lateral agreement 

Canada 

Other 

Surface: 

UPU Target System Countries 

UPU Transition System Countries 

Subject to Bi-lateral Agreement 

Canada 

Other 

Outbound Single-Piece Cards: 

Air: 

UPU Target System Countries 

UPU Transition System Countries 

Subject to Bi-lateral Agreement 

Canada 

Other 

Surface: 

UPU Target System Countries 

UPU Transition System Countries 

Subject to Bi-lateral Agreement 

Canada 

Other 

Total Outbound Single-Piece Mail 

Inbound Single-Piece Mail: 

Air: 

UPU Target System Countries Using UPU Rates 

UPU Target System Countries Using Negotiated Rates 

Canada 

Other 

UPU Transition System Countries Using UPU rates 

UPU Transition System Countries Using Negotiated Rates 

Surface: 

UPU Target System Countries Using UPU Rates 

UPU Target System Countries Using Negotiated Rates 

Canada 

Other 

UPU Transition System Countries Using UPU Rates 

UPU Transition System Countries Using Negotiated Rates 

Total Inbound Single-Piece Mail 

Total International First-Class Mail 

Total First-Class Mail 

Periodicals: 

Within County 

Outside County: 

Regular Rate 

Nonprofit 

Classroom 

Total Outside County 

Total Periodicals 

Standard Mail: 


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PRODUCTS AND CATEGORIES—Continued 

Regular Presort Mail: 

Letters 

Flats 

Parcels 

Not Flat-Machinables 

Total Regular Presort Mail 

Regular Automation Mail: 

Letters 

Flats 

Total Regular Automation Mail 

Total Regular Mail 

Nonprofit Presort Mail: 

Letters 

Flats 

Parcels 

Not Flat-Machinables 

Total Nonprofit Presort Mail 

Regular Automation Mail: 

Letters 

Flats 

Total Nonprofit Automation Mail 

Total Nonprofit Mail 

Total Regular and Nonprofit Mail 

Enhanced Carrier Route Mail: 

Basic Presort Letters 

High Density Letters 

Saturation Letters 

Total Enhanced Carrier Route Letters 

Basic Presort Flats 

High Density Flats 

Saturation Flats 

Total Enhanced Carrier Route Flats 

Basic Presort Parcels 

High Density Parcels 

Saturation Parcels 

Total Enhanced Carrier Route Parcels 

Total Enhanced Carrier Route Mail 

Nonprofit Enhanced Carrier Route Mail: 

Basic Presort Letters 

High Density Letters 

Saturation Letters 

Total Non-enhanced Carrier Route Letters 

Basic Presort Flats 

High Density Flats 

Saturation Flats 

Total Non-enhanced Carrier Route Flats 

Basic Presort Parcels 

High Density Parcels 

Saturation Parcels 

Total Non-enhanced Carrier Route Parcels 

Total Nonprofit Enhanced Carrier Route Mail 

Total Enhanced Carrier Route and Non-enhanced Carrier 

Route Mail 

Total Standard Mail 

Package Services: 

Single-Piece Parcel Post: 

Intra-Bulk Mail Center 

Inter-Bulk Mail Center 

Total Single-Piece Domestic Parcel Post 

Inbound Surface Parcel Post (at UPU Rates) 

Total Single-Piece Parcel Post 

Bound Printed Matter: 

Bound Printed Matter Flats: 

Nonpresorted 

Presorted 

Carrier Route 

Total Bound Printed Matter Flats 

Bound Printed Matter Parcels: 

Nonpresorted 

Presorted 

Carrier Route 

Total Bound Printed Matter Parcels 

Total Bound Printed Matter 

Media Mail: 


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PRODUCTS AND CATEGORIES—Continued 

Single Piece 

Presorted 

Total Media Mail 

Library Rate: 

Single Piece 

Presorted 

Total Library Mail 

Total Media and Library Mail 

Total Package Services 

USPS Penalty Mail 

Free-for-the-Blind Mail 

Negotiated Service Agreements (NSAs) (list each separately): 

Total Negotiated Service Agreement Mail 

Total Market Dominant Mail 

Special Services: 

Ancillary Services: 

Address Correction 

Applications and Mailing Permits: 

First-Class Mail Presort Fee 

Standard Mail Mailing Fee 

Total Applications and Mailing Permits 

Package Services Mailing Fees: 

Bound Printed Matter Destination Entry Mailing Fee 

Library Mail Presort Mailing Fee 

Media Mail Presort Mailing Fee 

Total Package Service Fees 

Parcel Return Service Fees: 

Account Maintenance Fee 

Permit Fee 

Total Parcel Return Service Fees 

Parcel Select Destination Entry Mailing Fee 

Periodicals Mailing Fees: 

Original Entry Fee 

Reentry Fee 

Additional Entry Fee 

News Agent Registry Fee 

Total Periodicals Mailing Fees 

Permit Imprint Fee 

Business Reply Mail: 

Per-Piece Fee 

Permit/Account Maintenance Fees 

Total Business Reply Mail 

Bulk Parcel Return Service: 

Per-Piece Fee 

Account Maintenance Fee 

Permit Fee 

Total Bulk Parcel Return Service 

Certified Mail 

Certificate of Mailing 

Collect-on-Delivery 

Delivery Confirmation 

Insurance 

Merchandise Return Service: 

Per-Piece Fee 

Account Maintenance Fee 

Permit Fee 

Total Merchandise Return Service 

Parcel Airlift 

Registered Mail 

Return Receipt 

Return Receipt for Merchandise 

Restricted Delivery 

Shipper Paid Forwarding 

Signature Confirmation 

Special Handling 

Stamped Envelopes 

Stamped Cards 

Premium Stamped Envelopes 

Premium Stamped Cards 

Total Ancillary Services 

International Ancillary Services: 

International Certificate of Mailing 

International Registered Mail: 

Outbound International Registered Mail 


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PRODUCTS AND CATEGORIES—Continued 

Inbound International Registered Mail 

Total International Registered Mail 

International Return Receipt: 

Outbound International Return Receipt 

Inbound International Return Receipt 

Total International Return Receipt 

International Restricted Delivery: 

Outbound International Restricted Delivery 

Inbound International Restricted Delivery 

Total International Restricted Delivery 

Inbound International Insurance 

Customs Clearance and Delivery Fee 

Total International Ancillary Services 

Address List Services: 

ZIP Coding of Mailing Lists 

Correction of Mailing Lists 

Address Changes for Election Boards 

Carrier Sequencing of Address Cards 

Total Address List Services 

Caller Service/Reserve Numbers 

Change-of-Address Credit Card Authentication 

Confirm 

International Reply Coupon Services: 

Outbound International Reply Coupon Service 

Inbound International Reply Coupon Service 

Total International Reply Services 

International Business Reply Mail Services: 

Outbound Business Reply Mail Service 

Inbound International Business Reply Mail Service 

Total International Business Reply Service 

Money Orders 

Post Office Boxes 

Other Special Services: 

Standard Mail Forwarding/Return: 

Forwarding/Return Fee 

Weighted Factor Forwarding/Return Fee 

Total Standard Mail Forwarding/Return 

Total Market Dominant Special Services 

Total Market Dominant Mail and Services 

Competitive Products 

Priority Mail: 

Domestic Priority Mail 

International Priority Mail: 

Outbound Priority Mail International: 

Subject to Inward Land Rates 

Subject to Terminal Dues 

UPU Target System Countries 

UPU Transition System Countries 

Subject to Non-UPU Rates 

Total Outbound Priority Mail International 

Inbound Air Parcel Post: 

At UPU Rates 

At Non-UPU Rates: 

Canada 

Other 

Total Inbound Air Parcel Post 

Total International Priority Mail 

Total Priority Mail 

Express Mail: 

Domestic Express Mail: 

Custom Designed 

Next Day and Second Day Post Office-to-Post Office 

Next Day and Second Day Post Office-to-Addressee 

Total Domestic Express Mail 

International Express Mail: 

Outbound International Expedited Services 

Inbound International Expedited Services: 

At UPU Rates 

At Non-UPU Rates: 

Total Inbound International Expedited Services 

Total International Express Mail: 

Total Express Mail 

Package Services: 

Bulk Parcel Post: 


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PRODUCTS AND CATEGORIES—Continued 

Inter-Bulk Mail Center: 

Barcoded 

Origin Bulk Mail Center Presort 

Bulk Mail Center Presort 

Total Inter-Bulk Mail Center 

Intra-Bulk Mail Center Barcoded 

Parcel Select: 

Destination Bulk Mail Center 

Destination Sectional Center Facility 

Destination Delivery Unit 

Total Parcel Select 

Parcel Return Service: 

Return Bulk Mail Center 

Return Destination Units 

Total Parcel Return Service 

Total Bulk Parcel Post 

International Mail: 

International Priority Airlift 

International Surface Airlift 

International Direct Sacks-M-Bags 

Outbound International Direct Sacks-M-Bags 

Inbound International Direct Sacks-M-Bags 

Total International Direct Sacks-M-Bags 

Global Customized Shipping Services 

Inbound Surface Parcel Post (at Non-UPU Rates): 

Canada 

Other 

Total Inbound Surface Parcel Post (at Non-UPU Rates) 

Total International Mail 

International Special Services: 

International Money Transfer Service: 

Outbound International Money Transfer Service 

Inbound International Money Transfer Service 

Total International Money Transfer Service 

International Ancillary Services: 

International Certificate of Mailing 

International Registered Mail 

International Return Receipt: 

Outbound International Return Receipt 

Inbound International Return Receipt 

Total International Return Receipt 

International Restricted Delivery 

International Insurance: 

Outbound International Insurance 

Inbound International Insurance 

Total International Insurance 

Custom Clearance and Delivery Fee 

Total International Ancillary Services 

Total International Special Services 

Negotiated Service Agreements (list each separately): 

Domestic 

Outbound International: 

Global Package Discount Contracts 

Global Expedited Package Services Contracts 

Global Direct Contracts 

Global Bulk Economy Contracts 

Global Plus Contracts 

Total Outbound International 

Inbound International: 

International Business Reply Service Contracts 

Inbound Direct Entry Contracts with Customers 

Inbound Direct Entry Contracts with Foreign Postal Administrations 

Total Inbound International 

Total Negotiated Service Agreements 

Premium Forwarding Service: 

Enrollment Fee 

Weekly Reshipment Fee 

Total Premium Forwarding Service 

It Is Ordered: 1. The Commission proposes to 

amend its rules of practice and 

procedure by deleting rules 3001.102 

and 103 [in Subpart G of 39 CFR part 


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3001] and adding new part 3050— 

Periodic Reporting as set forth below. 

2. Interested persons may submit 

comments by October 16, 2008. 

3. Interested persons may submit 

reply comments by November 14, 2008. 

4. Robert Sidman is designated as the 

Public Representative representing the 

interests of the general public in this 

proceeding. 

5. The Secretary shall arrange for 

publication of this Order in the Federal 

Register. 

List of Subjects 

39 CFR Part 3001 

Admininstrative practice and 

procedure, Confidential business 

information, Freedom of information, 

Sunshine Act. 

39 CFR Part 3050 

Administrative practice and 

procedure, Postal Service, 

Recordkeeping and reporting 

requirements. 

By the Commission. 

Issued August 22, 2008. 

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 proposes to amend 39 CFR 

chapter III as follows: 

PART 3001—RULES OF PRACTICE 

AND PROCEDURE 

1. The authority citation for part 3001 

continues to read as follows: 

Authority: 39 U.S.C. 404(d); 503; 3622; 

3633; 3652; 3661. 

§ 3001.102 [Removed] 

2. Remove and reserve § 3001.102 in 

subpart G. 

§ 3001.103 [Removed] 

3. Remove and reserve § 3001.103 in 

subpart G. 

4. Add part 3050—Periodic Reporting, 

to read as follows: 

PART 3050—PERIODIC REPORTING 

Sec. 

3050.1 Definitions. 

3050.2 Documentation of periodic reports. 

3050.3 Access to information supporting 

Commission reports or evaluations. 

3050.10 Analytical principles to be applied 

in the Postal Service’s Annual Report. 

3050.11 Proposals to change an accepted 

analytical principle applied in the Postal 

Service’s Annual Report. 

3050.12 Obsolescence of special studies 

relied on to produce the Postal Service’s 

Annual Report. 

3050.13 Additional documentation required 

in the Postal service’s Annual Report. 

3050.14 Format of the Postal Service’s 

Annual Report. 

3050.20 Compliance analysis in the Postal 

Service’s Annual Report. 

3050.21 Content of Annual Report. 

3050.22 Documentation supporting 

attributable cost estimates in the Postal 

Service’s Annual Report. 

3050.23 Documentation supporting 

incremental cost estimates in the Postal 

Service’s Annual Report. 

3050.24 Documentation supporting 

estimates of costs avoided by 

worksharing in the Postal Service’s 

Annual Report. 

3050.25 Documentation supporting 

estimates of volumes and revenues in the 

Postal Service’s Annual Report. 

3050.26 Documentation of demand 

elasticities. 

3050.27 Workers’ Compensation Report. 

3050.28 Monthly and pay period reports. 

3050.30 Information needed to estimate the 

cost of the universal service obligation. 

3050.31 Financial reports. 

3050.40 Additional financial reporting. 

3050.41 Treatment of additional financial 

reports. 

3050.42 Proceedings to improve the quality 

of financial data. 

3050.43 Information on program 

performance. 

3050.50 Information on service 

performance for domestic products. 

[Reserved] 

3050.51 Information on service 

performance for Special Services. 

[Reserved] 

3050.52 Information on service 

performance for international products. 

[Reserved] 

3050.53 Information on customer 

satisfaction and retail access. [Reserved] 

3050.60 Miscellaneous reports and 

documents. 

Authority: 39 U.S.C. 503, 3651, 3652, 3653. 

§ 3050.1 Definitions. 

For purposes of this part: 

(a) Accepted analytical principle 

refers to an analytical principle that was 

applied by the Commission in its most 

recent Annual Compliance 

Determination, unless a different 

analytical principle subsequently was 

accepted by the Commission in a final 

rule. 

(b) Accepted quantification technique 

refers to a quantification technique that 

was applied in the most recent iteration 

of the periodic report applying that 

quantification technique or was used to 

support a new analytical principle 

adopted in a subsequent proceeding 

under § 3050.11. 

(c) Analytical principle refers to a 

particular economic, mathematical, or 

statistical theory, precept, or 

assumption applied by the Postal 

Service in producing a periodic report 

to the Commission. 

(d) Annual Compliance 

Determination refers to the report that 

39 U.S.C. 3653 requires the Commission 

to issue each year evaluating the 

compliance of the Postal Service with 

the requirements of that Act. 

(e) Annual Report refers to the report 

that 39 U.S.C. 3652 requires the Postal 

Service to provide to the Commission 

each year. 

(f) Product means a postal service 

listed as a market dominant or a 

competitive product in the Mail 

Classification Schedule. 

(g) Quantification technique refers to 

any data entry or manipulation 

technique whose validity does not 

require the acceptance of a particular 

economic, mathematical, or statistical 

theory, precept, or assumption. A 

change in quantification technique 

should not change the output of the 

analysis in which it is employed. 

§ 3050.2 Documentation of periodic 

reports. 

(a) At the time that it submits any 

periodic report to the Commission, the 

Postal Service shall identify any input 

data that has changed, list any 

quantification techniques that it has 

changed, and list any corrections that it 

has made, since that report was last 

submitted to and accepted by the 

Commission. It shall provide a brief 

narrative explanation of each listed 

change. 

(b) If workpapers are required to 

support a periodic report, they shall: 

(1) Show all calculations employed in 

producing each estimate; 

(2) Be sufficiently detailed to allow all 

numbers used in such calculations to be 

traced back to public documents or to 

primary data sources; and 

(3) Be submitted in a form, and be 

accompanied by sufficient explanation 

and documentation, to allow them to be 

replicated using a publicly available PC 

application. 

(c) Spreadsheets used in preparing 

periodic reports shall be submitted in 

electronic form. They shall display the 

formulas used, their links to related 

spreadsheets, and shall not be password 

protected. 

(d) Filing of portions of the 

documentation required by this section 

that are not time critical may be delayed 

up to 2 weeks if the Postal Service 

obtains permission from the 

Commission to defer filing of such 

portions at least 30 days prior to the 

date on which the periodic report is 

due. 

§ 3050.3 Access to information supporting 

Commission reports or evaluations. 

(a) The Commission shall have access 

to the following material if, in its 

judgment, the information supports any 


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report, assessment, or evaluation 

required by title 39 of the United States 

Code, including: 

(1) The working papers and 

supporting matter of the Postal Service 

or the Postal Service Inspector General 

in connection with any information 

submitted under 39 U.S.C. 3652; and 

(2) Information that supports the 

Commission’s annual assessment under 

39 U.S.C. 3651. 

(b) If the Postal Service or the Postal 

Service Inspector General believes that 

any document or portion of a document 

or other matter that it has provided to 

the Commission in a periodic report or 

to supplement a periodic report 

contains information exempt from 

disclosure under 39 U.S.C. 410(c) or 5 

U.S.C. 552(b), that matter shall be 

treated in accordance with [proposed] 

part 3007 of this chapter. 

§ 3050.10 Analytical principles to be 

applied in the Postal Service’s Annual 

Report. 

In its Annual Report, the Postal 

Service shall use only accepted 

analytical principles as defined in 

§ 3050.1. 

§ 3050.11 Proposals to change an 

accepted analytical principle applied in the 

Postal Service’s Annual Report. 

To improve the quality, accuracy, or 

completeness of the data or analysis of 

data contained in the Postal Service’s 

Annual Report, the Commission, acting 

on its own behalf, may institute a 

proceeding to change an accepted 

analytical principle. In addition, any 

interested person, including the Postal 

Service or a Public Representative, may 

submit a petition to the Commission to 

initiate such a proceeding. 

(a) Form and content of petition. The 

petition shall identify the accepted 

analytical principle proposed for 

review, explain its perceived 

deficiencies, and suggest how those 

deficiencies should be remedied. 

(1) If the petition proposes that a 

specific alternative analytical principle 

be followed, it should include the data, 

analysis, and documentation on which 

the proposal is based, and, where 

feasible, include an estimate of the 

impact of the proposed change on the 

relevant characteristics of affected 

postal products, including their 

attributable cost, avoided cost, elasticity 

of demand, average revenue, or service 

attainment. 

(2) If the petitioner requests access to 

data from the Postal Service to support 

the assertions or conclusions in its 

petition, and such data are not 

otherwise available, it shall accompany 

the petition with a request to gain access 

to such data. The petitioner’s request 

should identify the data sought, and 

include the reasons for believing that 

the data will support its petition. To 

expedite its evaluation of the data 

request, the Commission may, after 

reasonable public notice, order that 

answers or objections be presented 

orally or in writing. 

(b) Procedures for processing petition. 

To better evaluate a petition to change 

an accepted analytical principle, the 

Commission may order that it be made 

the subject of discovery. By request of 

any interested person, or on its own 

behalf, the Commission may order that 

the petitioner and/or the Postal Service 

provide experts on the subject matter of 

the proposal to participate in technical 

conferences, prepare statements 

clarifying or supplementing their views, 

or be deposed by officers of the 

Commission. 

(c) Action on the petition. 

(1) After the conclusion of any 

discovery procedures, the Commission 

shall determine whether to issue a 

notice of proposed rulemaking based on 

the petition and the supporting material 

received. Such notice shall be evaluated 

by procedures that are consistent with 5 

U.S.C. 553. Interested parties will be 

afforded an opportunity to present 

comments and reply comments, either 

orally or in writing, at the Commission’s 

discretion. 

(2) If accepted by the Commission, the 

change proposed in the notice of 

proposed rulemaking shall be published 

in a notice of final rule in the Federal 

Register (and on the Commission Web 

site). 

§ 3050.12 Obsolescence of special studies 

relied on to produce the Postal Service’s 

Annual Report. 

(a) For each special study whose 

results are used to produce the estimates 

in its Annual Report, the Postal Service 

shall indicate the date the study was 

completed and certify that the study 

reflects current operating conditions 

and procedures. If the Postal Service 

cannot certify that a study reasonably 

reflects current operating conditions or 

procedures, it must provide a timetable 

for updating the study. 

(b) A presumption of obsolescence 

shall attach to any special study that is 

more than 5 years old at the time that 

the annual compliance report is due. 

(c) To obtain a waiver of the 

requirements of this section, the Postal 

Service must file a petition at least 60 

days before the date upon which its 

Annual Report is due. The petition and 

supplemental materials must 

demonstrate to the Commission’s 

satisfaction that any of the following 

criteria is met: 

(1) The operating conditions reflected 

in the special study have not changed; 

(2) Updating the results of the special 

study would not have a significant effect 

on the costs, volumes, or revenues 

estimated for any postal product; 

(3) The cost of updating the special 

study would outweigh the resulting 

benefits; or 

(4) An appropriate update or 

replacement of the special study is 

underway. 

§ 3050.13 Additional documentation 

required in the Postal Service’s Annual 

Report. 

(a) At the time the Postal Service files 

its Annual Report, it shall include a 

brief narrative explanation of any 

changes to accepted analytical 

principles that have been made since 

the most recent Annual Compliance 

Determination was issued, and the 

reasons that those changes were 

accepted. 

(b) The Annual Report is subject to 

the requirements of § 3050.2. 

§ 3050.14 Format of the Postal Service’s 

Annual Report. 

The Postal Service’s Cost and 

Revenue Analysis Report shall be 

presented in a format reflecting the 

classification structure in the current 

Mail Classification Schedule. It shall 

also be presented in an alternative, more 

disaggregated format capable of 

reflecting the classification structure in 

effect prior to the adoption of the Postal 

Accountability and Enhancement Act. 

§ 3050.20 Compliance analysis in the 

Postal Service’s Annual Report. 

The Postal Service’s Annual Report 

shall include an analysis of the 

information that it contains in sufficient 

detail to demonstrate that, in the fiscal 

year covered by its report, all of its 

products (market dominant and 

competitive) comply with all of the 

applicable provisions of chapter 36 of 

title 39 of the U.S. Code and the 

regulations promulgated thereunder, 

meet the goals established under 39 

U.S.C. 2803 and 2804, and promote the 

public policy objectives set out in title 

39 of the U.S. Code. 

§ 3050.21 Content of Annual Report. 

No later than 90 days after the close 

of each fiscal year, the Postal Service 

shall submit a report to the Commission 

analyzing its cost, volume, revenue, 

rate, and service information in 

sufficient detail to demonstrate that all 

products during such year comply with 

all applicable provisions of title 39 of 


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the United States Code. The report shall 

provide: 

(a) The volume and revenue generated 

by each product; 

(b) The attributable costs caused by, 

and the contribution to institutional 

costs provided by, each product; 

(c) The quality of service received by 

each market dominant product, 

including the speed of delivery and the 

reliability of delivery; 

(d) The price elasticity of demand for 

each product; 

(e) For each market dominant 

workshare discount offered during the 

reporting year: 

(1) The per-item cost avoided by the 

Postal Service by virtue of such 

discount; 

(2) The percentage of such per-item 

cost avoided that the per-item 

workshare discount represents; 

(3) The per-item contribution made to 

institutional costs; and 

(4) When the Postal Service invokes 

the exception provisions of 39 U.S.C. 

3622(e)(2)(A) through (D), specify the 

factual and analytical bases for its 

conclusion that those exceptions apply. 

(f) For each market dominant 

negotiated service agreement: 

(1) Identify its rates and service 

features; 

(2) Estimate its costs, volumes, 

revenues, and elasticity of demand; 

(3) Analyze its effect on the 

operational performance of the Postal 

Service, specifying the affected 

operations and, to the extent possible, 

quantifying the effect; 

(4) Analyze the contribution of the 

agreement to institutional costs for its 

most recent year of operation. The year 

analyzed shall end on the anniversary of 

the negotiated service agreement that 

falls within the fiscal year covered by 

the Postal Service’s Annual Report and 

include the 12 preceding months. The 

analysis shall show all calculations and 

fully identify all inputs. Inputs used to 

estimate the effect on total contribution 

to the Postal Service, such as unit costs 

and price elasticities, shall be updated 

using fiscal year values; and 

(5) Analyze the effect of the 

negotiated service agreement (and other 

functionally equivalent negotiated 

service agreements) on the marketplace. 

If there were harmful effects, explain 

why those effects were not 

unreasonable. 

(g) For each competitive negotiated 

service agreement: 

(1) Identify its rates and service 

features; and 

(2) Estimate its costs, volumes, 

revenues, and its elasticity of demand; 

(h) For market tests of experimental 

products: 

(1) Estimate their costs, volumes, and 

revenues in aggregate by market 

dominant and by competitive product 

group; 

(2) Estimate the quality of service of 

each individual experimental product; 

and 

(3) Indicate whether offering the 

experimental product has created an 

inappropriate competitive advantage for 

the Postal Service or any mailer. 

(i) For each non-postal service, 

estimate its costs, volumes, and 

revenues; and 

(j) Provide any other information that 

the Postal Service believes will help the 

Commission evaluate the Postal 

Service’s compliance with the Postal 

Accountability and Enhancement Act. 

§ 3050.22 Documentation supporting 

attributable cost estimates in the Postal 

Service’s Annual Report. 

The following items shall be reported 

when they have changed from those 

used in the most recent Annual 

Compliance Determination: 

(a) The Cost and Revenue Analysis 

Report (CRA), including relevant data 

on international mail services; 

(b) The Cost Segments and 

Components Report (CSC); 

(c) All input data and processing 

programs used to produce the CRA 

report, to include: 

(1) CSC Reconciliation to Financial 

Statement and Account Reallocations; 

(2) Manual Input Requirement 

(reflecting direct accounting or modeled 

costs); 

(3) The CSC ‘‘A’’ report (showing how 

indirect costs are distributed to products 

based on the distribution of direct 

costs); 

(4) The CSC ‘‘B’’ report (showing how 

indirect Property Equipment Supplies 

Services and Administrative (PESSA) 

costs are distributed to products; 

(5) The CSC ‘‘D’’ report (showing final 

adjustments to total attributable and 

product-specific costs); 

(6) The CSC ‘‘F’’ report (containing 

distribution keys for indirect labor 

components); 

(7) The control file that includes the 

CRA program control string commands 

used to produce the CRA and the abovedescribed CSC reports; and 

(8) The master list of cost segment 

components, including all of the 

components used as distribution keys in 

the development of the CSC report and 

its accompanying reports. 

(d) Spreadsheet workpapers 

underlying development of the CSC 

report by component. These workpapers 

shall include the updated factors and 

input datasets from the supporting data 

systems used, including: 

(1) The In-Office Cost System (IOCS); 

(2) The Management Operating Data 

System (MODS); 

(3) The City Carrier Cost System 

(CCCS); 

(4) The City Carrier Street Time 

Sampling System (CCSTS); 

(5) The Rural Carrier Cost System 

(RCCS); 

(6) The National Mail Count; 

(7) The Transportation Cost System 

(TRACS); 

(8) System for International Revenues 

and Volumes/Outbound (SIRV/O); 

(9) System for International Revenues 

and Volumes/Inbound (SIRV/I); 

(10) Military and International 

Dispatch and Accountability System; 

and 

(11) Inbound International Revenue 

Accounting Systems (IAB data). 

(e) The econometric analysis of carrier 

street time, including input data, 

processing programs, and output; 

(f) The Window Service Supply Side 

Variability, Demand Side Variability, 

and Network Variability studies, 

including input data, processing 

programs, and output; 

(g) The econometric analysis of 

purchased highway transportation cost 

variability, including input data, 

processing programs, and output; 

(h) The econometric analysis of 

freight rail cost variability, including 

input data, processing programs, and 

output; 

(i) A list and summary description of 

any transportation contracts whose unit 

rates vary according to the level of 

postal volume carried. The description 

should include the product or product 

groups carried under each listed 

contract; 

(j) Spreadsheets and processing 

programs distributing attributable mail 

processing costs; 

(k) The Vehicle Service Driver Data 

Collection System (VSD); 

(l) Input data, processing programs, 

and output of the Vehicle Service Driver 

Cost Variability Study; 

(m) Econometric analysis of 

postmaster cost variability; 

(n) Floor Space Survey; and 

(o) Density studies used to convert 

weight to cubic feet of mail. 

§ 3050.23 Documentation supporting 

incremental cost estimates in the Postal 

Service’s Annual Report. 

Input data, processing programs, and 

output of an incremental cost model 

shall be reported. 

§ 3050.24 Documentation supporting 

estimates of costs avoided by worksharing 

in the Postal Service’s Annual Report. 

The following items shall be reported, 

including supporting calculations and 

derivations: 


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(a) Letter, card, flat, parcel and nonflat machinable mail processing cost 

models with Delivery Point Sequence 

percentages calculated, which shall 

include: 

(1) Coverage factors for any 

equipment where coverage is less than 

100 percent; 

(2) MODS productivities; 

(3) Piggyback factors and supporting 

data; 

(4) Entry profiles, bundle sorts, and 

pieces per bundle; 

(5) Bundle breakage, handlings, and 

density; 

(6) Mail flow density and accept rates; 

(7) Remote Computer Reader 

finalization costs, cost per image, and 

Remote Bar Code Sorter leakage; 

(8) Percentage of mail finalized to 

carrier route; 

(9) Percentage of mail destinating at 

post office boxes; and 

(10) Wage rates and premium pay 

factors. 

(b) Pallet cost models for Periodicals; 

(c) Sack cost models for Periodicals; 

(d) Bundle cost models for 

Periodicals: 

(e) Other container cost models for 

Periodicals; 

(f) Analysis of Periodicals container 

costs; 

(g) Business Reply Mail cost 

supporting material; 

(h) Enhanced Carrier Route mail 

processing saturation savings; 

(i) Mail processing unit costs by shape 

and cost pool for each product and 

benchmark category; 

(j) Delivery costs by product, shape, 

presort level, automation compatibility, 

and machinability, including Detached 

Address Label cost calculations; and 

(k) Dropship cost avoidance models. 

§ 3050.25 Documentation supporting 

estimates of volumes and revenues in the 

Postal Service’s Annual Report. 

The following items shall be 

provided: 

(a) The Revenue, Pieces, and Weight 

(RPW) report, including estimates by 

shape, weight, and indicia, and the 

underlying billing determinants within 

90 days of the close of each fiscal year; 

(b) Revenue, Pieces, and Weight by 

rate category and special service by 

quarter (within 30 days of the close of 

the quarter); 

(c) Quarterly Statistics Report, 

including estimates by shape, weight, 

and indicia (within 30 days of the close 

of the quarter); and 

(d) Billing determinants (within 40 

days of the close of the quarter). 

§ 3050.26 Documentation of demand 

elasticities. 

By January 20 of each year, the Postal 

Service shall provide econometric 

estimates of demand elasticity for all 

postal products accompanied by the 

underlying econometric models and the 

input datasets used. 

§ 3050.27 Workers’ Compensation Report. 

The Workers’ Compensation Report, 

including summary workpapers, shall 

be provided by March 1 of each year. 

§ 3050.28 Monthly and pay period reports. 

The following reports shall be 

provided within 15 days of the close of 

the relevant period: 

(a) National Consolidated Trial 

Balances and the Revenue and Expense 

Summary (monthly); 

(b) National Payroll Hours Summary 

in electronic form (pay period); 

(c) On-roll and Paid Employee 

Statistics (ORPES) (pay period); and 

(d) Postal Service Active Employee 

Statistical Summary (HAT report) (pay 

period). 

§ 3050.30 Information needed to estimate 

the cost of the universal service obligation. 

The following reports shall be 

provided by March 31 of each year: 

(a) Mail flow volumes by product (or 

product group) between each pair of 

mail processing facilities, including 

local turnaround mail for each facility. 

(b) Direct and indirect costs, 

workhours, and CCCS/RCCS volumes by 

sampled product (or product group), 

carrier route, facility, and ZIP Code; 

(c) For sampled city routes: 

(1) Actual and possible deliveries by 

type; 

(2) Actual and possible stops by type: 

(3) Collection boxes; 

(4) Number of businesses served; and 

(5) Miles identified by processing 

facility, route type, and ZIP Code; 

(d) For sampled rural routes: 

(1) Stops; 

(2) Boxes served, and 

(3) Mailpieces identified by carrier 

route, route type, facility, and ZIP Code; 

(e) For each retail facility in a 

representative sample: 

(1) Revenues generated; and 

(2) Costs incurred identified by ZIP 

Code. 

§ 3050.31 Financial reports. 

The following reports shall be 

provided annually at the time noted: 

(a) Annual Report of the Postmaster 

General (when released to the public); 

(b) Congressional Budget Submission 

and supporting workpapers, including 

Summary Tables SE 1, 2, and 6 (within 

7 days of the submission of the Federal 

Budget by the President to the 

Congress); and 

(c) Integrated Financial Plan (within 7 

days of approval by the Board of 

Governors). 

§ 3050.40 Additional financial reporting. 

The Postal Service shall file the 

following financial reports with the 

Commission. These reports shall 

include the information required by 

sections 13 and 15(d) of the Securities 

and Exchange Act of 1934 (15 U.S.C. 

78m, 78o(d)). 

(a) Quarterly report. Within 40 days 

after the end of each fiscal quarter, the 

Postal Service shall file a report 

containing the information required by 

Form 10–Q or any successor form as it 

may be revised. 

(b) Annual report. Within 60 days 

after the end of each fiscal year, the 

Postal Service shall file a report 

containing the information required by 

Form 10–K or any successor form as it 

may be revised. That report shall: 

(1) Comply with section 404 

(Management Assessment of Internal 

Controls) of the Sarbanes-Oxley Act of 

2002 (15 U.S.C. 7262) beginning with 

the annual report for FY 2010; 

(2) Include with respect to the Postal 

Service’s pension and post-retirement 

health obligations: 

(i) The funded status of the Postal 

Service’s pension and post-retirement 

health obligations; 

(ii) Components of the net change in 

the fund balances and obligations and 

the nature and cause of any significant 

changes; 

(iii) Components of net periodic costs; 

(iv) Cost methods and assumptions 

underlying the relevant actuarial 

valuations; 

(v) The effect of a 1 percent increase 

in the assumed health care cost trend 

rate for each future year on the service 

and interest costs and the accumulated 

obligations; 

(vi) Actual contributions to and 

payments from the funds for the years 

presented and the estimated future 

contributions and payments for each of 

the following 5 years; 

(vii) The composition of plan assets 

reflected in the fund balances; and 

(viii) The assumed rate of return fund 

balances and the actual rate of returns 

for the years presented. 

(3) The Postal Service shall obtain the 

information listed in paragraph (b)(2) of 

this section from the Office of Personnel 

Management no later than 30 days after 

the end of each fiscal year. 

(c) Current report. Within 4 days after 

the occurrence of any one or more 

events specified in the items in sections 

1–6 and 9 of Form 8–K or any successor 

form as it may be revised, the Postal 

Service shall file a report containing the 

information required by Form 8–K. 

(d) Segment reporting. For purposes 

of Form 10–Q and Form 10–K, the 

Postal Service shall include segment 


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reporting, beginning with reports for 

fiscal year 2010. The Postal Service 

shall determine the appropriate segment 

reporting under paragraph (a) of this 

section after consultation with the 

Postal Regulatory Commission. 

§ 3050.41 Treatment of additional financial 

reports. 

(a) The Postal Service shall obtain an 

opinion from an independent auditor on 

whether the information listed in 

§ 3050.40(b) is fairly stated in all 

material respects, either in relation to: 

(1) The basic financial statements as 

a whole; or 

(2) On a stand-alone basis. 

(b) The Postal Service and its 

independent auditor shall provide the 

Commission with the audit 

documentation and any other matter 

that supports the information submitted 

under § 3050.40. 

§ 3050.42 Proceedings to improve the 

quality of financial data. 

The Commission may on its own 

motion, or at the request of an interested 

person, initiate proceedings to improve 

the quality, accuracy, or completeness 

of Postal Service data required under 

§ 3050.40 whenever it appears that: 

(a) The data have become significantly 

inaccurate or can be significantly 

improved; or 

(b) Those revisions are, in the 

judgment of the Commission, otherwise 

necessitated by the public interest. 

§ 3050.43 Information on program 

performance. 

The Postal Service shall accompany 

its Annual Report with the following 

items: 

(a) The comprehensive statement 

required by 39 U.S.C. 2401(e); 

(b) The performance plan required by 

39 U.S.C. 2803; and 

(c) The program performance reports 

required by 39 U.S.C. 2804. 

§ 3050.50 Information on service 

performance for domestic products. 

[Reserved] 

§ 3050.51 Information on service 

performance for Special Services. 

[Reserved] 

§ 3050.52 Information on service 

performance for international products. 

[Reserved] 

§ 3050.53 Information on customer 

satisfaction and retail access. 

[Reserved] 

§ 3050.60 Miscellaneous reports and 

documents. 

The following reports shall be 

provided at the times indicated: 

(a) A master list of publications and 

handbooks, including those related to 

internal information procedures, at the 

beginning of each fiscal year; 

(b) An electronic copy of each 

publication, handbook, and data 

collection form, at the beginning of each 

fiscal year; 

(c) Data collection forms, and 

corresponding training handbooks 

(when changed); 

(d) Household Diary Study (when 

completed); 

(e) Input data and calculations used to 

produce the annual Total Factor 

Productivity estimates (by March 1 of 

each year); and 

(f) Succinct narrative explanations of 

how the estimates in the most recent 

Annual Compliance Determination were 

calculated and the reasons that 

particular analytical principles were 

followed. The narrative explanations 

shall be comparable in detail to that 

which had been provided in Library 

Reference 1 in omnibus rate cases 

processed under the Postal 

Reorganization Act (by July 1 of each 

year). 

(g) An update of the history of 

changes in postal volumes, revenues, 

rates, and fees that appears in Library 

References USPS–LR–L–73 through 76 

in Docket No. R2006–1 (by July 1 of 

each year). 

[FR Doc. E8–21060 Filed 9–12–08; 8:45 am] 

BILLING CODE 7710–FW–P 


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