62184 Federal Register / Vol. 73, No. 202 / Friday, October 17, 2008 / Rules and Regulations 

1Notice of United States Postal Service of Filing 

of Functionally Equivalent Global Expedited 

Package Services 1 Negotiated Service Agreement, 

August 14, 2008, filed in Docket Nos. CP2008–18, 

CP2008–19, CP2008–20, CP2008–21, CP2008–22, 

CP2008–23, and CP2008–24 (Notices). 

2 Docket No. CP2008–5, Order Concerning Global 

Expedited Package Services Contracts, June 27, 

2008 (Order No. 86). 

3Order No. 86 at 7. 

4 Docket No. CP2008–5, United States Postal 

Service Notice of Filing Redacted Copy of 

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

5PRC Order No. 100, Notice and Order 

Concerning Filing of Additional Global Expedited 

Package Services 1 Negotiated Service Agreements, 

August 19, 2008 (Order No. 100). 

6Public Representative Comments in Response to 

United States Postal Service Notice of Global 

Expedited Package Services Contract, September 3, 

2008 (Public Representative Comments). On 

September 3, 2008, the Public Representative also 

filed a Motion for Late Acceptance of Comments by 

the Public Representative. The motion is granted. 

POSTAL REGULATORY COMMISSION 

39 CFR Part 3020 

[Docket Nos. CP2008–18, CP2008–19, 

CP2008–20, CP2008–21, CP2008–22, 

CP2008–23 and CP2008–24; Order No. 107] 

Administrative Practice and Procedure, 

Postal Service 

AGENCY: Postal Regulatory Commission. 

ACTION: Final rule. 

SUMMARY: The Commission is adding 

several recently-negotiated Global 

Expedited Package Service contracts to 

the competitive product list. This action 

is consistent with changes in a recent 

law governing postal operations. Republication of the lists of market 

dominant and competitive products is 

also consistent with new requirements 

in the law. 

DATES: Effective October 17, 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: Regulatory 

History, 73 FR 50374 (August 26, 2008). 

In these dockets, the Postal Service 

proposes to add seven individual 

negotiated service agreements, namely, 

specific Global Expedited Package 

Service (GEPS) contracts, to the Global 

Expedited Package Services 1 (GEPS 1) 

product established in Docket No. 

CP2008–5. For the reasons discussed 

below, the Commission grants the Postal 

Service’s proposals. 

I. Background 

On August 14, 2008, the Postal 

Service filed seven identical notices, 

which have been assigned to Docket 

Nos. CP2008–18, CP2008–19, CP2008– 

20, CP2008–21, CP2008–22, CP2008–23 

and CP2008–24, announcing price and 

classification changes for competitive 

products not of general applicability.1

These notices announce individual 

negotiated service agreements and 

specific GEPS contracts which the 

Postal Service has executed with 

individual mailers. The Postal Service 

believes each is functionally equivalent 

to the GEPS 1 product established in 

Docket No. CP2008–5. 

These dockets have been filed 

pursuant to 39 U.S.C. 3633 and 39 CFR 

3015.5. In addition, the Postal Service 

contends that the contracts are in accord 

with Order No. 86.2 In Order No. 86, the 

Commission found that additional 

contracts may be included as part of the 

GEPS 1 product if they meet the 

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

they are substantially equivalent to the 

initial GEPS 1 contract.3

In support of each of these dockets, 

the Postal Service also filed the contract 

and supporting materials under seal. 

The Governors’ Decision supporting the 

GEPS 1 product was filed in 

consolidated Docket No. CP2008–5.4

The Notices also contain the Postal 

Service’s arguments that these 

agreements are substantially equivalent 

and that they exhibit similar cost and 

market characteristics to the GEPS 1 

product. Notices at 3–5. 

In Order No. 100, the Commission 

gave notice of the seven dockets, 

appointed a Public Representative, and 

provided the public with an opportunity 

to comment.5

II. Comments 

Comments were filed by the Public 

Representative.6 The Public 

Representative’s comments focus on five 

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

classification; (3) increased access to 

U.S. goods by consumers; (4) volume 

projections; and (5) selection of 

economic adjustment factors. The 

Public Representative concludes that 

the seven contracts at issue satisfy the 

requirements of 39 U.S.C. 3633 

regarding cost coverage, the lack of 

cross-subsidization, and contribution to 

institutional costs. Public 

Representative Comments at 3–4. The 

Public Representative also believes that 

the contracts are substantially similar 

and any differences between them and 

the original GEPS 1 contract are 

immaterial. Id. at 5. Accordingly, the 

Public Representative contends that 

these contracts should be included as 

part of the GEPS 1 product category. Id. 

The remainder of the Public 

Representative’s comments focuses on 

the benefits of the contracts to U.S. 

consumers, the sufficiency of volume 

projections, and the need to exercise 

special care in selecting economic 

adjustment factors. Id. at 5–8. 

III. Commission Analysis 

The Postal Service proposes to add 

additional contracts under the GEPS 1 

product that was created by Docket No. 

CP2008–5. In Order No. 86, the 

Commission noted that: 

If the Postal Service determines that it has 

entered into an agreement substantially 

equivalent to GEPS 1 with another mailer, it 

may file such a contract under rule 3015.5. 

In each case, the individual contract must be 

filed with the Commission, and each contract 

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

3633. The Postal Service shall identify all 

significant differences between the new 

contract and the pre-existing product group, 

GEPS 1. Such differences would include 

terms and conditions that impose new 

obligations or new requirements on any party 

to the contract. The Commission will verify 

whether or not any subsequent contract is in 

fact substantially equivalent. Contracts not 

having substantially the same terms and 

conditions as the GEPS 1 contract must be 

filed under 39 CFR part 3020, subpart B. 

Order No. 86 at 7. First, the Commission 

reviews the contracts to ensure that they 

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

GEPS 1 product and thus belong as part 

of that product. Second, the 

Commission must ensure that the 

contracts at issue in this proceeding 

independently satisfy the requirements 

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

Here, the Postal Service has filed 

seven additional contracts (Docket Nos. 

CP2008–18, CP2008–19, CP2008–20, 

CP2008–21, CP2008–22, CP2008–23 and 

CP2008–24) that it contends are 

substantially similar to the one 

submitted in Docket No. CP2008–5 and 

accordingly should be grouped under 

the GEPS 1 product. Notices at 3–5. It 

argues these contracts share the same 

cost and market characteristics as the 

previously classified GEPS 1 contract, in 

particular, those of small or mediumsized businesses that mail their 

products directly to foreign destinations 

using either Express Mail International, 

Priority Mail International, or both. Id. 

at 4. 

The Postal Service also identifies 

what it terms ‘‘incidental’’ and ‘‘minor’’ 

differences between the proposed new 

contracts and the pre-existing product 

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

it notes that the contracts may differ in 

minor respects, for example, prices may 


jlentini on PROD1PC65 with RULES4
Federal Register / Vol. 73, No. 202 / Friday, October 17, 2008 / Rules and Regulations 62185 

7The differences between the contracts and the 

originally classified GEPS 1 contract do not appear 

to be substantial. However, this finding does not 

preclude the Commission from revisiting this issue 

at a future date if circumstances warrant. 

vary due to volume commitments, 

signing dates of the agreements, 

existence of previous agreements, and 

other case specific and negotiation 

related factors. Id. at 4–5. 

The Commission has reviewed the 

contracts in Docket Nos. CP2008–18, 

CP2008–19, CP2008–20, CP2008–21, 

CP2008–22, CP2008–23 and CP2008–24 

and finds those agreements to be 

substantially equivalent in all pertinent 

respects to the GEPS 1 product.7

Additionally, the Commission 

reviews the filings to ensure that they 

meet the requirements of rules 3015.5 

and 3015.7 and of 39 U.S.C. 3633. The 

Commission has reviewed the financial 

analysis provided under seal that 

accompanies the agreements in all seven 

dockets as well as the comments filed in 

this proceeding. 

The Public Representative ‘‘sees no 

specific cause for concern about the 

accuracy of the volume projections 

associated with these contracts,’’ but 

recommends that ‘‘the Postal Service 

* * * in its sealed filings identify the 

nature and source of these volume 

projections, in general terms, so that the 

Commission might properly evaluate 

the significance of possible 

vulnerabilities or weaknesses 

underlying those projections.’’ Public 

Representative Comments at 7. The 

recommendation is not unreasonable. 

However, for purposes of the 

Commission’s preliminary analysis with 

regard to the contracts at issue herein, 

it does not appear that a detailed 

analysis of the nature and sources of 

these volume projections would be 

warranted at this time. If, as a result of 

the Commission’s Annual Compliance 

Determination, the volume projections 

are shown to be unreliable, appropriate 

remedial action may be taken. 

The Public Representative also 

recommends that the Postal Service 

should take particular care to ensure 

that it selects proper economic 

adjustment factors. Id. at 7–8. The 

contracts at issue have a relatively short 

duration, one year. See Notices at 2. 

Thus, the risk associated with such 

factors, e.g., that the Postal Service may 

fail to meet its statutory cost coverage 

requirements, appears to be minimal. 

Based on the information provided, 

the Commission finds that all seven 

proposed contracts submitted should 

cover their attributable costs (39 U.S.C. 

3633(a)(2)), should not lead to the 

subsidization of competitive products 

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

3633(a)(1)), and should have a positive 

effect on competitive products’ 

contribution to institutional costs (39 

U.S.C. 3633(a)(3)). Thus, a preliminary 

review of the proposed contracts 

indicates that they comport with the 

provisions applicable to rates for 

competitive products. 

The revisions to the competitive 

product list are shown below the 

signature of this Order, and shall 

become effective upon publication in 

the Federal Register. 

IV. Ordering Paragraphs 

It is Ordered: 

1. The contracts filed in Docket Nos. 

CP2008–18, CP2008–19, CP2008–20, 

CP2008–21, CP2008–22, CP2008–23 and 

CP2008–24 are added to the product 

category Global Expedited Package 

Services 1 (CP2008–5). 

2. The Secretary shall arrange for 

publication of this order in the Federal 

Register. 

By the Commission. 

Steven W. Williams, 

Secretary. 

List of Subjects in 39 CFR Part 3020 

Administrative practice and 

procedure, Postal Service. 

■ For the reasons stated in the preamble, 

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

Postal Regulatory Commission amends 

39 CFR part 3020 as follows: 

■ 1. The authority citation for part 3020 

continues to read as follows: 

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

3682. 

■ 2. Revise Appendix A to Subpart A of 

Part 3020—Mail Classification Schedule 

to read as follows: 

PART 3020—PRODUCT LISTS 

Appendix A to Subpart A of Part 

3020—Mail Classification Schedule 

Part A—Market Dominant Products 

Market Dominant Product List 

First-Class Mail 

Single-Piece Letters/Postcards 

Bulk Letters/Postcards 

Flats 

Parcels 

Outbound Single-Piece First-Class Mail 

International 

Inbound Single-Piece First-Class Mail 

International 

Standard Mail (Regular and Nonprofit) 

High Density and Saturation Letters 

High Density and Saturation Flats/Parcels 

Carrier Route 

Letters 

Flats 

Not Flat-Machinables (NFMs)/Parcels 

Periodicals 

Within County Periodicals 

Outside County Periodicals 

Package Services 

Single-Piece Parcel Post 

Inbound Surface Parcel Post (at UPU 

rates) 

Bound Printed Matter Flats 

Bound Printed Matter Parcels 

Media Mail/Library Mail 

Special Services 

Ancillary Services 

International Ancillary Services 

Address List Services 

Caller Service 

Change-of-Address Credit Card Authentication 

Confirm 

International Reply Coupon Service 

International Business Reply Mail 

Service 

Money Orders 

Post Office Box Service 

Negotiated Service Agreements 

HSBC North America Holdings Inc. Negotiated Service Agreement 

Bookspan Negotiated Service Agreement 

Bank of America corporation Negotiated Service Agreement 

The Bradford Group Negotiated Service 

Agreement 

Market Dominant Product Descriptions 

First-Class Mail [Reserved for Class Description] 

Single-Piece Letters/Postcards [Reserved for Product Description] 

Bulk Letters/Postcards [Reserved for 

Product Description] 

Flats [Reserved for Product Description] 

Parcels [Reserved for Product Description] 

Outbound Single-Piece First-Class Mail 

International [Reserved for Product 

Description] 

Inbound Single-Piece First-Class Mail 

International [Reserved for Product 

Description] 

Standard Mail (Regular and Nonprofit) [Reserved for Class Description] 

High Density and Saturation Letters 

[Reserved for Product Description] 

High Density and Saturation Flats/Parcels [Reserved for Product Description] 

Carrier Route [Reserved for Product Description] 

Letters [Reserved for Product Description] 

Flats [Reserved for Product Description] 

Not Flat-Machinables (NFMs)/Parcels 

[Reserved for Product Description] 

Periodicals [Reserved for Class Description] 

Within County Periodicals [Reserved 

for Product Description] 

Outside County Periodicals [Reserved 

for Product Description] 

Package Services [Reserved for Class Description] 

Single-Piece Parcel Post [Reserved for 

Product Description] 

Inbound Surface Parcel Post (at UPU 

rates) [Reserved for Product Description] 

Bound Printed Matter Flats [Reserved 

for Product Description] 


jlentini on PROD1PC65 with RULES4
62186 Federal Register / Vol. 73, No. 202 / Friday, October 17, 2008 / Rules and Regulations 

Bound Printed Matter Parcels [Reserved for Product Description] 

Media Mail/Library Mail [Reserved for 

Product Description] 

Special Services [Reserved for Class Description] 

Ancillary Services [Reserved for Product Description] 

Address Correction Service [Reserved 

for Product Description] 

Applications and Mailing Permits [Reserved for Product Description] 

Business Reply Mail [Reserved for 

Product Description] 

Bulk Parcel Return Service [Reserved 

for Product Description] 

Certified Mail [Reserved for Product 

Description] 

Certificate of Mailing [Reserved for 

Product Description] 

Collect on Delivery [Reserved for Product Description] 

Delivery Confirmation [Reserved for 

Product Description] 

Insurance [Reserved for Product Description] 

Merchandise Return Service [Reserved 

for Product Description] 

Parcel Airlift (PAL) [Reserved for Product Description] 

Registered Mail [Reserved for Product 

Description] 

Return Receipt [Reserved for Product 

Description] 

Return Receipt for Merchandise [Reserved for Product Description] 

Restricted Delivery [Reserved for Product Description] 

Shipper-Paid Forwarding [Reserved for 

Product Description] 

Signature Confirmation [Reserved for 

Product Description] 

Special Handling [Reserved for Product 

Description] 

Stamped Envelopes [Reserved for Product Description] 

Stamped Cards [Reserved for Product 

Description] 

Premium Stamped Stationery [Reserved for Product Description] 

Premium Stamped Cards [Reserved for 

Product Description] 

International Ancillary Services [Reserved for Product Description] 

International Certificate of Mailing [Reserved for Product Description] 

International Registered Mail [Reserved 

for Product Description] 

International Return Receipt [Reserved 

for Product Description] 

International Restricted Delivery [Reserved for Product Description] 

Address List Services [Reserved for 

Product Description] 

Caller Service [Reserved for Product 

Description] 

Change-of-Address Credit Card Authentication [Reserved for Product 

Description] 

Confirm [Reserved for Product Description] 

International Reply Coupon Service 

[Reserved for Product Description] 

International Business Reply Mail 

Service [Reserved for Product Description] 

Money Orders [Reserved for Product 

Description] 

Post Office Box Service [Reserved for 

Product Description] 

Negotiated Service Agreements [Reserved 

for Class Description] 

HSBC North America Holdings Inc. Negotiated Service Agreement [Reserved for Product Description] 

Bookspan Negotiated Service Agreement [Reserved for Product Description] 

Bank of America Corporation Negotiated Service Agreement 

The Bradford Group Negotiated Service 

Agreement 

Part B—Competitive Products 

Competitive Product List 

Express Mail 

Express Mail 

Outbound International Expedited 

Services 

Inbound International Expedited Services 

Inbound International Expedited 

Services 1 (CP2008–7) 

Priority Mail 

Priority Mail 

Outbound Priority Mail International 

Inbound Air Parcel Post 

Parcel Select 

Parcel Return Service 

International 

International Priority Airlift (IPA) 

International Surface Airlift (ISAL) 

International Direct Sacks—M-Bags 

Global Customized Shipping Services 

Inbound Surface Parcel Post (at nonUPU rates) 

International Money Transfer Service 

International Ancillary Services 

Special Services 

Premium Forwarding Service 

Negotiated Service Agreements 

Domestic 

Express Mail Contract 1 (MC2008– 

5) 

Outbound International 

Global Expedited Package Services 

(GEPS) Contracts 

GEPS 1 (CP2008–5, CP2008– 

11, CP2008–12, and 

CP2008–13, CP2008–18, 

CP2008–19, CP2008–20, 

CP2008–21, CP2008–22, 

CP2008–23 and CP2008–24) 

Global Plus Contracts 

Global Plus 1 (CP2008–9 and 

CP2008–10) 

Global Plus 2 (MC2008–7, 

CP2008–16 and CP2008–17) 

Inbound Direct Entry Contracts with 

Foreign Postal Administrations 

(MC2008–6) 

Competitive Product Descriptions 

Express Mail [Reserved for Group Description] 

Express Mail [Reserved for Product Description] 

Outbound International Expedited 

Services [Reserved for Product Description] 

Inbound International Expedited Services [Reserved for Product Description] 

Priority [Reserved for Product Description] 

Priority Mail [Reserved for Product Description] 

Outbound Priority Mail International 

[Reserved for Product Description] 

Inbound Air Parcel Post [Reserved for 

Product Description] 

Parcel Select [Reserved for Group Description] 

Parcel Return Service [Reserved for 

Group Description] 

International [Reserved for Group Description] 

International Priority Airlift (IPA) [Reserved for Product Description] 

International Surface Airlift (ISAL) [Reserved for Product Description] 

International Direct Sacks—M-Bags 

[Reserved for Product Description] 

Global Customized Shipping Services 

[Reserved for Product Description] 

International Money Transfer Service 

[Reserved for Product Description] 

Inbound Surface Parcel Post (at nonUPU rates) [Reserved for Product Description] 

International Ancillary Services [Reserved for Product Description] 

International Certificate of Mailing [Reserved for Product Description] 

International Registered Mail [Reserved 

for Product Description] 

International Return Receipt [Reserved 

for Product Description] 

International Restricted Delivery [Reserved for Product Description] 

International Insurance [Reserved for 

Product Description] 

Negotiated Service Agreements [Reserved for Group Description] 

Domestic [Reserved for Product Description] 

Outbound International [Reserved for 

Group Description] 

[FR Doc. E8–24581 Filed 10–16–08; 8:45 am] 

BILLING CODE 7710–FW–P 


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