[Federal Register Volume 74, Number 89 (Monday, May 11, 2009)]
[Notices]
[Pages 21837-21838]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-10862]


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POSTAL REGULATORY COMMISSION

[Docket No. R2009-3; Order No. 209]


Postal Service Price Changes

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is conducting a review of the Postal Service's 
planned Standard Mail Volume Incentive Pricing Program (Summer Sale). 
This document invites public comment.

DATES: Comments are due May 21, 2009.

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 <a href="/cdn-cgi/l/email-protection#502324352038353e7e23383122363d313e102022337e373f26"><span class="__cf_email__" data-cfemail="c8bbbcadb8a0ada6e6bba0a9baaea5a9a688b8baabe6afa7be">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

I. Overview

    On May 1, 2009, the Postal Service filed with the Commission a 
notice announcing its intention to adjust prices for Standard Mail 
letters and flats pursuant to 39 U.S.C. 3622 and 39 CFR part 3010.\1\ 
The proposed adjustment is in the form of a ``Standard Mail Volume 
Incentive Pricing Program'' (also known as the Summer Sale program) 
with a planned implementation date of July 1, 2009 and a planned 
expiration date of September 30, 2009. This proposal represents an 
innovative approach by the Postal Service to utilize greater pricing 
flexibility for market dominant products under the Postal 
Accountability and Enhancement Act (PAEA), Public Law 109-435, 120 
Stat. 3218 (2006).
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    \1\ United States Postal Service Notice of Market-Dominant Price 
Adjustment, May 1, 2009 (Notice).
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II. Postal Service Filing

    Summer Sale Program. The proposed Summer Sale program will provide 
a 30 percent rebate to eligible mailers on Standard Mail letters and 
flats volumes above a mailer specific threshold. Id. at 3. The 
threshold is calculated based on the percentage change between the 
mailer's volume during the current fiscal year (through March 2009) and 
the volume for the same period last year (trend), and applying that 
percentage to the volume mailed during the summer months the previous 
year (July 1, 2008 and September 30, 2008). Id. at 3-4. To discourage 
mailers from shifting planned October 2009 mailings into the Summer 
Sale program, the Postal Service will measure each mailer's October 
2009 volume against the prior year's volume for that month and reduce 
the rebate if the mailer is found to have mailed less in October 2009. 
Id. at 4.
    Eligibility for the Summer Sale program is limited to mailers who 
are permit holders, i.e., owners of a permit imprint advance deposit 
account and who have a demonstrable volume of at least 1 million 
Standard Mail letters and flats between October 1, 2007 and March 31, 
2008 for one or more permit imprint advance deposit accounts, pre-
canceled stamp permits, or postage meter permits. Id. at 4. Mail 
service providers are not eligible for the program due to the 
significant administrative cost to the Postal Service. Id. at 5. 
However, applicants may qualify for the program with volume mailed 
through an account owned by a mail service provider if the applicant 
can adequately demonstrate that it is the owner of the mail. Id. at 4.
    In support of the proposal, the Postal Service notes that the 
economy has adversely affected many postal customers, resulting in a 
precipitous decline in Standard Mail volume. Id. at 2. The Postal 
Service believes the Summer Sale program may help its customers 
increase use of Standard Mail during what is typically a low volume 
period for Standard Mail. Id. at 2-3. The Postal Service also believes 
it will receive intangible benefits from the proposed program, 
including learning information which may improve postal data systems, 
gathering feedback from customers, which may help fine tune future 
programs, and improving customer relations. Id. at 3.
    Conformance with 39 CFR 3010. The Postal Service's proposed 
schedule of prices appears in Appendix A, attached to the Notice. Id. 
at 1. It also represents, in conformance with the notice requirements 
of 39 CFR 3010.14(a)(3), that it will issue public notice of the price 
changes at least 45 days before the effective date via several 
additional means, including issuing notice of the price changes on the 
Postal Service's Web site (http://www.usps.com), the Postal Explorer 
Web site (http://www.pe.usps.com), the DMM [Domestic Mail Manual] 
Advisory, and the P&C [Producers and Consumers] Weekly, and a press 
release announcing the changes. The Postal Service also states that it 
plans to provide public notice of the price changes in future issues of 
the PCC [Postal Customer Council] Insider, MailPro, the Postal 
Bulletin, and the Federal Register. Id. at 1-2. The Postal Service 
identifies Greg Dawson, Manager, Pricing Strategy, as the official 
available to provide prompt responses

[[Page 21838]]

to requests for clarification from the Commission.
    Impact on the Price Cap. The Postal Service proposes to treat the 
program, for purposes of the price cap, as if it were a negotiated 
service agreement subject to 39 CFR 3010.24. Id. at 8. The Postal 
Service signals its intent to ignore the net price decrease resulting 
from the program, and for purposes of the price cap, calculate revenues 
for the volumes as though they paid the appropriate non-discounted 
rates. Id. at 8; 39 CFR 3010.24(a). Therefore, the Postal Service makes 
no calculation of cap or price changes as described in 39 CFR 
3010.14(b)(1) through (4). Notice at 8.
    Objectives and Factors, Workshare Discounts, and Preferred Rates. 
The Postal Service lists the relevant objectives and factors of 39 
U.S.C. 3622, and claims that the program supports several factors and 
is unlikely to impact the ability of Standard Mail (as a class) to 
cover its costs. Id. at 8-13. The Postal Service also asserts that, to 
the extent it affects workshare discounts, the program will shrink 
them, keeping discounts with a passthrough of 100 percent or less in 
compliance, and bringing passthroughs over 100 percent closer to 
compliance. Id. at 13. The Postal Service also indicates that Standard 
Mail letters and flats entered at nonprofit prices will be eligible for 
the same rebate, and since the rebate is a fixed percentage, the 60 
percent differential between regular and nonprofit prices will remain 
unchanged. Id.
    Mail Classification Schedule (MCS) Language. The Postal Service 
addresses 39 CFR 3010.14(b)(9) in Appendix A of its Notice. Id. at 1. 
This rule requires that the notice include all the changes to the 
product descriptions within the MCS that are necessitated by the 
planned price adjustments. These changes are presented based on draft 
MCS language being developed by the Commission in cooperation with the 
Postal Service. The draft MCS will be the subject of a future 
rulemaking, which will include the opportunity for public comment. The 
Postal Service provides the proposed MCS revisions in Appendix A.

III. Commission Action

    The Commission establishes Docket No. R2009-3 to consider all 
matters related to the Notice as required by 39 U.S.C. 3622. The 
Commission's rules provide for a 20 day comment period starting from 
the date of the filing of the Notice. See 39 CFR 3010.13(a)(5). 
Interested persons may express views and offer comments on whether the 
planned changes are consistent with the policies of 39 U.S.C. 3622 and 
39 CFR part 3010. Comments are due no later than May 21, 2009.
    The Commission appoints Richard A. Oliver and Kenneth R. Moeller to 
represent the interests of the general public in this proceeding. See 
39 U.S.C. 505. Pursuant to rule 3010.13(c), the Commission will issue 
its determination in this proceeding by June 4, 2009.

IV. Ordering Paragraphs

    It is Ordered:
    1. The Commission establishes Docket No. R2009-3 to consider 
matters raised by the Postal Service's May 1, 2009 filing.
    2. Interested persons may submit comments on the planned price 
adjustments. Comments are due May 21, 2009.
    3. Pursuant to 39 U.S.C. 505, the Commission appoints Richard A. 
Oliver and Kenneth R. Moeller to represent the interests of the general 
public in this proceeding.
    4. The Commission directs the Secretary of the Commission to 
arrange for prompt publication of this Notice in the Federal Register.

    By the Commission.
Steven W. Williams,
Secretary.
[FR Doc. E9-10862 Filed 5-8-09; 8:45 am]
BILLING CODE 7710-FW-P


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