[Federal Register Volume 75, Number 206 (Tuesday, October 26, 2010)]
[Notices]
[Pages 65675-65676]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-26957]


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POSTAL REGULATORY COMMISSION

[Docket Nos. MC2010-37 and CP2010-126; Order No. 553]


New Postal Product

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is noticing a recent Postal Service request to 
add Inbound International Expedited Services 4 to the competitive 
product list. It is also noticing a contemporaneous Postal Service 
notice that new rates for inbound Express Mail Service from Canada will 
become effective January 1, 2011. This notice addresses procedural 
aspects associated with these filings.

ADDRESSES: Submit comments electronically via the Commission's Filing 
Online system. Commenters who cannot submit comments electronically 
should contact the person identified in the FOR FURTHER INFORMATION 
CONTACT section for information on filing alternatives.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
at <a href="/cdn-cgi/l/email-protection#43303726332b262d6d302b2231252e222d033331206d242c35"><span class="__cf_email__" data-cfemail="8efdfaebfee6ebe0a0fde6effce8e3efe0cefefceda0e9e1f8">[email protected]</span></a> or 202-789-6824.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
II. Notice of Filings
III. Ordering Paragraphs

I. Introduction

    On September 30, 2010, the Postal Service filed a request pursuant 
to 39 U.S.C. 3642 and 39 CFR 3020.30 et seq. to add Inbound 
International Expedited Services 4 to the competitive product list.\1\ 
The Postal Service asserts that Inbound International Expedited 
Services 4 is a competitive product within the meaning of 39 U.S.C. 
3632(b)(3). This Request has been assigned Docket No. MC2010-37.
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    \1\ Request to Add Inbound International Expedited Services 4 to 
the Competitive Product List, and Notice of United States Postal 
Service of Filing Canada Post Group--United States Postal Service 
Contractual Bilateral Agreement (Under Seal), September 30, 2010 
(Request).
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    The Postal Service contemporaneously filed notice pursuant to 39 
U.S.C. 3632(b)(3) and 39 CFR 3015.5 that new rates for inbound Express 
Mail Service (EMS) from Canada will become effective January 1, 2011, 
as provided in the Canada Post--United States Postal Service 
Contractual Bilateral Agreement for Inbound Competitive Services 
(Bilateral Agreement), which governs bilateral rates for EMS with 
Canada Post Corporation (Canada Post), the postal operator in Canada. 
Id. at 1. It notes that prices and classifications ``not of general 
applicability'' for negotiated service agreements concerning Inbound 
International Expedited Services have been previously established in 
Governors' Decision No. 08-5.\2\ Id. at 1-2. The Postal Service states 
the rates authorized by the Governors are an exception to those offered 
through the Universal Postal Union (UPU) EMS Cooperative. Id. The new 
prices, which are effective January 1, 2011, have been assigned Docket 
No. CP2010-126.
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    \2\ Governors' Decision No. 08-5, April 1, 2008, established 
prices for the inbound services offered under Express Mail 
International bilateral/multilateral agreements.
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    Background. The Bilateral Agreement, which was added to the 
competitive product list by Order No. 376,\3\ covers parcels arriving 
in the United States by surface transportation and Xpresspost, a 
Canadian service for documents, packets, and light-weight packages. 
Governors' Decision No. 09-16.\4\ Under the Bilateral Agreement, Canada 
Post may tender surface parcels and Xpresspost to the Postal Service at 
negotiated prices rather than the default prices through the UPU. The 
Bilateral Agreement establishes rates for 2010 and 2011. Id.
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    \3\ Docket Nos. MC2010-14 and CP2010-13, Order Concerning 
Bilateral Agreement with Canada Post for Inbound Competitive 
Services, December 30, 2009 (Order No. 376).
    \4\ See Docket Nos. MC2010-14 and CP2010-13, Request of the 
United States Postal Service to Add Canada Post--United States 
Postal Service Contractual Bilateral Agreement for Inbound 
Competitive Services to the Competitive Product List, and Notice of 
Filing (Under Seal) the Enabling of Governors' Decision and 
Agreement, November 25, 2009. See also Decision of the Governors of 
the United States Postal Service on the Establishment of Prices and 
Classifications for Canada Post--United States Postal Service 
Contractual Bilateral Agreement for Inbound Competitive Services, 
November 18, 2009 (Governors' Decision No. 09-16). The agreement 
became effective January 1, 2010 and is scheduled to expire December 
31, 2011, unless terminated earlier by either party on 90 days' 
prior notice. Id., Attachment 3.
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    On August 2, 2010, the Postal Service filed a notice, pursuant to 
39 CFR 3020.90 et seq., of a classification change concerning the 
Bilateral Agreement.\5\ The classification change filed in Docket No. 
MC2010-33, effective August 23, 2010, was approved by the Commission in 
Order No. 522.\6\ The effect of this change is that inbound surface 
parcels tendered by Canada Post are now handled as Priority Mail and 
subject to the rates for Xpresspost merchandise established in the 
Bilateral Agreement. Additionally, for the period August 23, 2010 
through December 31, 2010 a small volume of residual Xpresspost items 
will continue to be rated and handled as Xpresspost under the Bilateral 
Agreement.\7\
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    \5\ Notice of United States Postal Service of Proposed Minor 
Classification Change Concerning Canada Post--United States Postal 
Service Contractual Bilateral Agreement for Inbound Competitive 
Services, August 2, 2010 (Notice).
    \6\ Docket No. MC2010-33, Order Accepting Minor Classification 
Changes Related to Canada Post--United States Postal Service 
Contractual Bilateral Agreement, August 20, 2010 (Order No. 522).
    \7\ The Postal Service indicates the treatment of residual 
Xpresspost items is necessary to accommodate the use of existing 
Xpresspost mailing labels through the end of CY 2010.
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    The classification change was prompted by Canada Post's decision to 
no longer dispatch parcels, referred to as Expedited Parcels, for entry 
into the Postal Service's Parcel Post network. Consequently, the 
service for Expedited Parcels is now provided at existing negotiated 
rates for Xpresspost in lieu of the negotiated surface parcel post 
rates. Xpresspost items are rated and handled as Express Mail with 
Canada as a Tier 1 country in the EMS country listing beginning August 
23, 2010. In its Notice, the Postal Service stated ``assuming that the 
rates charged to Canada Post for EMS-rated items are not the same as 
other rates charged to other countries, then before the end of CY 2010, 
the Postal Service will accordingly initiate a separate, combined mail 
classification and competitive price change proceeding to give effect 
to the CY 2011 rates for

[[Page 65676]]

Xpresspost handled in the EMS network.'' Notice at 6. The Postal 
Service's instant Request represents that subsequent filing to give 
effect to CY 2011 rates for Xpresspost handled in the EMS network.
    Request. In support of its Request, the Postal Service filed the 
following materials:
    <bullet> Attachment 1--an application for non-public treatment of 
pricing and supporting documents filed under seal;
    <bullet> Attachment 2--a redacted version of Governors' Decision 
No. 08-5 establishing prices and classifications for services offered 
under EMS bilateral/multilateral agreements; Mail Classification 
Schedule (MCS) language applicable to Inbound EMS bilateral/
multilateral agreements; formulas for inbound prices under EMS 
bilateral/multilateral agreements; and an analysis of the formulas, 
certification of the Governors' vote, and certification of compliance 
with 39 U.S.C. 3633(3)(a);
    <bullet> Attachment 3--a redacted version of the portion of the 
Bilateral Agreement pertinent to the filing;
    <bullet> Attachment 4--certification of prices for the Bilateral 
Agreement required by 39 CFR 3015.5(c)(2);
    <bullet> Attachment 5--a Statement of Supporting Justification as 
required by 39 CFR 3020.32; and
    <bullet> Attachment 6--proposed Mail Classification Schedule 
language describing International Expedited Services 4.
    In the Statement of Supporting Justification, Lea Emerson, 
Executive Director, International Postal Affairs, asserts that ``[t]he 
addition of the relevant portions of this [Bilateral] Agreement as a 
competitive product will enable the Commission to verify that each 
contract covers its attributable costs and enables competitive 
products, as a whole, to make a positive contribution to coverage of 
institutional costs.'' Id., Attachment 5. She further states that as a 
result, ``no issue of subsidization of competitive products by market 
dominant products arises.'' Id.
    Joseph Moeller, Manager, Regulatory Reporting and Cost Analysis, 
Finance Department, certifies that the contract complies with 39 U.S.C. 
3633(a). Id., Attachment 4. He asserts that the prices for the 
Bilateral Agreement ``should cover its attributable costs and preclude 
the subsidization of competitive products by market dominant 
products.'' Id., Attachment 4.
    The Postal Service filed much of the supporting materials, 
including the specific Bilateral Agreement, under seal. Id. at 5. In 
its Request, the Postal Service maintains that certain portions of the 
contract, the rates, descriptions of the rates, and related financial 
information should remain under seal. Id., Attachment 1.

II. Notice of Filings

    The Commission establishes Docket Nos. MC2010-37 and CP2010-126 for 
consideration of the Request pertaining to the proposed Inbound 
International Expedited Services 4 product, and the related Bilateral 
Agreement, respectively. In keeping with practice, these dockets are 
addressed on a consolidated basis for purposes of this order; however, 
future filings should be made in the specific docket in which issues 
being addressed pertain.
    Interested persons may submit comments on whether the Postal 
Service's filings in the captioned dockets are consistent with the 
policies of 39 U.S.C. 3632, 3633, or 3642, 39 CFR part 3015, and 39 CFR 
3020 subpart B. Comments are due no later than October 14, 2010.\8\ The 
public portions of these filings can be accessed via the Commission's 
Web site (http://www.prc.gov).
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    \8\ Commenters who cannot file by the deadline should contact 
Mr. Sharfman.
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    The Commission appoints Paul L. Harrington to serve as Public 
Representative in these dockets.

III. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket Nos. MC2010-37 and CP2010-126 
for consideration of the matters raised in each docket.
    2. Pursuant to 39 U.S.C. 505, Paul L. Harrington is appointed to 
serve as officer of the Commission (Public Representative) to represent 
the interests of the general public in these proceedings.
    3. Comments by interested persons in these proceedings are due no 
later than October 14, 2010.
    4. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. 2010-26957 Filed 10-25-10; 8:45 am]
BILLING CODE 7710-FW-P


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