31374 Federal Register / Vol. 74, No. 125 / Wednesday, July 1, 2009 / Rules and Regulations 

1 Docket No. MC2009–25, Request of the United 

States Postal Service to Add Priority Mail Contract 

Group to Competitive Product List, May 19, 2009 

(Request). In the alternative, the Commission 

construes the Postal Service’s proposal as a request 

to add Priority Mail Contract 6 through Priority 

Mail Contract 10 to the Competitive Product List. 

See Order No. 217, Notice and Order Concerning 

Priority Mail Contract 6 through 10 Negotiated 

Service Agreements, May 26, 2009, at 4, n.5 (Order 

No. 217). 

We received one comment from five 

individuals who jointly expressed their 

support for the proposed amendment to 

§ 17.273(e). Based on the rationale set 

forth in the proposed rule, we are 

adopting the provisions of the proposed 

rule as a final rule without change. 

Unfunded Mandates 

The Unfunded Mandates Reform Act 

of 1995, requires that agencies prepare 

an assessment of anticipated costs and 

benefits before developing any rule that 

may result in expenditure by State, 

local, and Tribal governments, in the 

aggregate, or by the private sector, of 

$100 million or more (adjusted annually 

for inflation) in any given year. This 

final rule would have no such effect on 

State, local, and Tribal governments, or 

on the private sector. 

Paperwork Reduction Act of 1995 

This document contains no provisions 

constituting a collection of information 

under the Paperwork Reduction Act of 

1995 (44 U.S.C. 3501–3521). 

Executive Order 12866 

Executive Order 12866 directs 

agencies to assess all costs and benefits 

of available regulatory alternatives and, 

when regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety, and other advantages; 

distributive impacts; and equity). The 

Order classifies a rule as a ‘‘significant 

regulatory action’’ requiring review by 

Office of Management and Budget 

(OMB) unless OMB waives such review, 

as any regulatory action that is likely to 

result in a rule that may: (1) Have an 

annual effect on the economy of $100 

million or more or adversely affect in a 

material way the economy, a sector of 

the economy, productivity, competition, 

jobs, the environment, public health or 

safety, or State, local, or Tribal 

government or communities; (2) create a 

serious inconsistency or otherwise 

interfere with an action taken or 

planned by another agency; (3) 

materially alter the budgetary impact of 

entitlements, grants, user fees, or loan 

programs or the rights and obligations of 

recipients thereof; or (4) raise novel 

legal or policy issues arising out of legal 

mandates, the President’s priorities, or 

the principles set forth in the Executive 

Order. 

VA has examined the economic, 

interagency, budgetary, legal, and policy 

implications of this final rule and has 

concluded that it is not a significant 

regulatory action under the Executive 

Order 12866. 

Regulatory Flexibility Act 

The Secretary of Veterans Affairs 

hereby certifies that this regulatory 

amendment will not have a significant 

economic impact on a substantial 

number of small entities as they are 

defined in the Regulatory Flexibility 

Act, 5 U.S.C. 601–612. Individuals 

eligible for CHAMPVA benefits are 

widely dispersed geographically and 

thus services provided to them would 

not have a significant impact on any 

small entity. Therefore, pursuant to 5 

U.S.C. 605(b), this rule is exempt from 

the initial and final regulatory flexibility 

analyses requirements of section 603 

and 604. 

Catalog of Federal Domestic Assistance 

This final rule affects the Civilian 

Health and Medical Program of the 

Department of Veterans Affairs 

(CHAMPVA), for which there is no 

Catalog of Federal Domestic Assistance 

program number. 

List of Subjects in 38 CFR Part 17 

Administrative practice and 

procedure, Alcohol abuse, Alcoholism, 

Claims, Day care, Dental health, Drug 

abuse, Foreign relations, Government 

contracts, Grant programs—health, 

Health facilities, Health professionals, 

Health records, Homeless, Medical and 

dental schools, Medical devices, 

Medical research, Mental health 

programs, Nursing homes, Philippines, 

Reporting and recordkeeping 

requirements, Travel and transportation 

expenses, and Veterans. 

Approved: June 22, 2009. 

John R. Gingrich, 

Chief of Staff, Department of Veterans Affairs. 

■ For the reasons stated above, the 

Department of Veterans Affairs amends 

38 CFR part 17 as follows: 

PART 17—MEDICAL 

■ 1. The authority citation for part 17 

continues to read as follows: 

Authority: 38 U.S.C. 501, 1721, and as 

noted in specific sections. 

■ 2. Revise paragraph (e) of § 17.273 to 

read as follows: 

§ 17.273 Preauthorization. 

* * * * * 

(e) Durable medical equipment with a 

purchase or total rental price in excess 

of $2,000. 

* * * * * 

Authority: 38 U.S.C. 501, 1781. 

[FR Doc. E9–15484 Filed 6–30–09; 8:45 am] 

BILLING CODE 8320–01–P 

POSTAL REGULATORY COMMISSION 

39 CFR Part 3020 

[Docket Nos. MC2009–25, CP2009–30, 

CP2009–31, CP2009–32, CP2009–33 and 

CP2009–34; Order No. 226] 

New Postal Product 

AGENCY: Postal Regulatory Commission. 

ACTION: Final rule. 

SUMMARY: The Commission is adding 

the Postal Service’s Priority Mail 

Contract Group 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 of the law. 

DATES: Effective July 1, 2009 and is 

applicable beginning June 19, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Stephen L. Sharfman, General Counsel, 

202–789–6820 and 

stephen.sharfman@prc.gov. 

SUPPLEMENTARY INFORMATION: 

Regulatory History, 74 FR 26744 (June 

3, 2009) 

The Postal Service seeks to add a new 

product identified as Priority Mail 

Contract Group to the Competitive 

Product List, or, in the alternative, add 

new products identified as Priority Mail 

Contract 6 through Priority Mail 

Contract 10 to the Competitive Product 

List. For the reasons that follow, the 

Commission adds the contracts 

identified in Docket Nos. CP2009–30 

through CP2009–34 to the Competitive 

Product List as separate, new products. 

I. The Postal Service’s Request 

On May 19, 2009, the Postal Service 

filed a formal request pursuant to 39 

U.S.C. 3642 and 39 CFR 3020.30 et seq. 

to add a new product entitled Priority 

Mail Contract Group to the Competitive 

Product List.1 The Postal Service asserts 

that Priority Mail Contract Group is a 

competitive product ‘‘not of general 

applicability’’ within the meaning of 39 

U.S.C. 3632(b)(3). Request at 1. The 

Request has been assigned Docket No. 

MC2009–25. 

The Postal Service 

contemporaneously filed five contracts 

Federal Register / Vol. 74, No. 125 / Wednesday, July 1, 2009 / Rules and Regulations 31375 

2See Docket Nos. CP2009–30 through CP2009– 

34, Notice of Establishment of Rates and Class Not 

of General Applicability, May 19, 2009 (collectively 

cited as Notices). 

3Attachment 1 to the Request consists of the 

redacted Decision of the Governors of the United 

States Postal Service on Establishment of Rates and 

Classes Not of General Applicability for Priority 

Mail Contract Group (Governors’ Decision No. 09– 

6). The Governors’ Decision includes two 

attachments. Attachment A shows the requested 

changes to the Mail Classification Schedule product 

list. Attachment B provides an analysis of the 

proposed Priority Mail Contract Group. Attachment 

2 provides a statement of supporting justification 

for this Request. Attachment 3 provides the 

certification of compliance with 39 U.S.C. 3633(a). 

4The contracts in Docket Nos. CP2009–30, 

CP2009–31 and CP2009–34 become effective on the 

day the Commission issues all necessary regulatory 

approvals. The contracts in Docket Nos. CP2009–32 

and CP2009–33 become effective the day after the 

Commission issues all necessary regulatory 

approvals. 

5Notice of the United States Postal Service of 

Filing Under Seal of Response to Request for 

Supplemental Information in Order No. 217, June 

1, 2009 (Response). 

6Public Representative Comments in Response to 

Order No. 217, June 5, 2009 (Public Representative 

Comments). 

7Comments of the United States Postal Service in 

Response to Order No. 217 (Postal Service 

Comments), and Comments of United Parcel 

Service in Response to Commission Order No. 217 

(UPS Comments), both filed on June 8, 2009. 

8 Docket No. RM2007–1, Order Establishing 

Ratemaking Regulations for Market Dominant and 

Competitive Products, October 29, 2007 (Order No. 

43). 

9 Docket No. RM2007–1, Order Proposing 

Regulations to Establish a System of Ratemaking, 

August 15, 2007 (Order No. 26). 

which it identifies as Priority Mail 

Contract 6, Priority Mail Contract 7, 

Priority Mail Contract 8, Priority Mail 

Contract 9, and Priority Mail Contract 

10. These contracts have been assigned 

Docket Nos. CP2009–30 through 

CP2009–34, respectively. 2 It believes 

these contracts are related to the 

proposed new product in Docket No. 

MC2009–25. 

In support of its Request, the Postal 

Service filed the following materials: 

(1) A redacted version of the Governors’ 

Decision ‘‘authorizing management to 

negotiate [certain] contracts for Priority 

Mail service;’’ (2) requested changes in 

the Mail Classification Schedule 

product list and accompanying Mail 

Classification Schedule language; (3) a 

redacted version of the Governors’ 

analysis of the Priority Mail Contract 

Group; (4) a statement of supporting 

justification as required by 39 CFR 

3020.32; and (5) a certification of 

compliance with 39 U.S.C. 3633(a).3

Substantively, the Request seeks to add 

Priority Mail Contract Group to the 

Competitive Product List. Request at 

1–2. 

Redacted versions of five specific 

Priority Mail contracts are also included 

with the Request. Three of the contracts 

are for 3 years, one of the contracts is 

for 1 year, and the final contract is for 

3 months. Depending on the contract, 

the effective dates are proposed to be 

either the day the Commission provides 

all necessary regulatory approvals or the 

following day.4 W. Ashley Lyons, 

Regulatory Reporting and Cost Analysis, 

Finance Department, certifies that all 

five contracts comply with 39 U.S.C. 

3633(a). See Notices, Attachment B. 

In the Statement of Supporting 

Justification, Mary Prince Anderson, 

Manager, Sales and Communications, 

Expedited Shipping, asserts that the 

services to be provided under the 

proposed new product will cover their 

attributable costs, make a positive 

contribution to institutional costs, and 

increase contribution toward the 

requisite 5.5 percent of the Postal 

Service’s total institutional costs. 

Request, Attachment 2. Thus, Ms. 

Anderson contends there will be no 

issue of subsidization of competitive 

products by market dominant products 

as a result of the creation of this 

product. Id. 

The Postal Service filed much of the 

supporting materials, including the 

Governors’ Decision and the specific 

Priority Mail contracts, under seal. In its 

Request, the Postal Service maintains 

that the contracts and related financial 

information, including the customer’s 

name and the accompanying analyses 

that provide prices, terms, conditions, 

and financial projections should remain 

under seal. Request at 2; Notices at 2. 

II. Procedural History 

In Order No. 217, the Commission 

gave notice of the above-captioned 

dockets, offered certain preliminary 

observations on the Request and 

Notices, appointed a public 

representative, requested supplemental 

information, and provided the public 

with an opportunity to comment. 

Significantly, the Commission indicated 

that, in its view, Governors’ Decision 

09–6 could be used to satisfy the 

requirements of 39 CFR 3020.31(b) and 

39 U.S.C. 3642 with regard to 

authorizing future Priority Mail 

contracts that might or might not be 

functionally equivalent to existing 

products. Order No. 217 at 4. 

On June 1, 2009, the Postal Service 

filed the supplemental information 

requested in Order No. 217.5 On June 5, 

2009, the Public Representative filed 

comments.6 On June 8, 2009, the Postal 

Service and United Parcel Service (UPS) 

filed comments.7

III. Comments 

UPS comments. UPS argues that the 

proposed Priority Mail Contract Group 

product does not meet the Postal 

Accountability and Enhancement Act 

(PAEA) definition of the term 

‘‘product,’’ and is inconsistent with 

Order No. 43’s finding that every 

negotiated service agreement is a 

separate product unless the agreements 

are functionally equivalent to one 

another.8 It submits that for products to 

be functionally equivalent, they must 

have similar cost and market 

characteristics and be alike in all 

material respects. UPS Comments at 

1–2. 

UPS believes that the proposed 

Priority Mail Contract Group product is 

not limited to agreements that share the 

same cost and market characteristics. It 

believes that the length of time of the 

contract, whether the mailer or the 

Postal Service provides packaging as 

well as entry and preparation 

requirements, means that these 

contracts have very different cost 

characteristics. Moreover, because the 

shell classification only requires the 

cost coverage to fall within a specified 

range, shippers can qualify for contracts 

under the proposed product without 

regard to market similarities. Id. at 2–3. 

UPS also has a concern that the 

proposed Priority Mail Contract Group 

would undermine the effectiveness of 

the PAEA’s safeguards—grouping NSAs 

too broadly not only would diminish 

the Annual Compliance Report’s value 

as a tool for achieving transparency, but 

also would undermine substantive 

ratemaking requirements, such as the 

requirement that each competitive 

product cover its attributable costs. It 

also believes that the effectiveness of 

pre-implementation review would be 

diminished due to the shortened 

timeframe for consideration of 

functionally equivalent agreements. In 

support of its position, UPS cites to 

Commission Order No. 26 in Docket No. 

RM2007–1.9 UPS Comments at 3–4. 

Public Representative Comments. The 

Public Representative’s Comments focus 

on (1) the breadth of the proposed shell 

classification in Docket No. MC2009–25; 

(2) a concern that the Governors may be 

delegating too much of their authority to 

management with respect to the 

proposed shell classification in Docket 

No. MC2009–25; and (3) a concern 

about the lack of transparency and 

accountability with respect to the voting 

records of the Governors. Public 

Representative Comments at 2–9. He 

believes that creating a broad product 

category seemingly without functional 

constraint is contrary to the public 

interest and the intent of the PAEA. Id. 

at 10. 

31376 Federal Register / Vol. 74, No. 125 / Wednesday, July 1, 2009 / Rules and Regulations 

The Public Representative offers two 

recommendations to alleviate these 

concerns. First, he suggests that the 

Commission work with the Postal 

Service to define shell classifications in 

a ‘‘somewhat narrower fashion’’ so that 

there is some common element among 

the included contracts. Second, he 

recommends that broad shell 

classifications should be set to expire 

after a specified period of time. Id. at 

9–10. 

Postal Service comments. The Postal 

Service claims that all five contracts 

share the cost and market characteristics 

of large, commercial Priority Mail 

customers. As such, it believes the 

agreements are functionally equivalent. 

The Postal Service references its Notices 

that identify the differences between the 

five agreements. For example, it states 

that proposed Priority Mail Contract 7 

differs from Priority Mail Contract 6 

only in regards to the negotiated prices, 

the postage payment method, and the 

provision of Priority Mail packaging. 

Postal Service Comments at 2. It 

characterizes these differences as 

‘‘minor,’’ and argues that they do not 

rise to the level of differences in cost or 

market characteristics that would be 

expected at the product level. Id. at 

1–2. 

The Postal Service does not believe 

that the scope of the classification 

established by the Governors is 

problematic, noting that it is less broad 

than Priority Mail service as a whole, 

which is one product. It contends that 

while the concept of functional 

equivalency was originally applied to 

negotiated service agreements to ensure 

similarly situated customers would be 

entitled to similar agreements with the 

Postal Service, those concerns are 

reduced significantly in the context of 

competitive products. Id. at 3–4. 

As a practical matter, the Postal 

Service explains that it has encountered 

difficulties in implementing contracts 

and maintaining customers in light of 

various uncertainties, including the lack 

of a statutory or regulatory timeline for 

proceedings filed under section 3642. It 

notes that ‘‘even after negotiation, 

signature, and filing, the 

implementation date is not known when 

a section 3642 proceeding is required.’’ 

Id. at 4. On the other hand, it argues that 

adding Priority Mail Contract Group to 

the product list will improve the ability 

of the Postal Service to plan with the 

customer for a smooth initiation and 

implementation of the contract terms on 

a known date. Id. at 4–5. 

IV. Commission Analysis 

The Commission has reviewed the 

Postal Service’s filings in Docket Nos. 

MC2009–25 and CP2009–30 through 

CP2009–34, the financial analysis 

provided under seal that accompanies 

it, the supplemental information filed 

by the Postal Service, and the comments 

filed by the Public Representative, the 

Postal Service, and UPS. 

Statutory requirements. The 

Commission’s statutory responsibilities 

with respect to 39 U.S.C. 3642 in this 

instance entail (1) determining the 

appropriate scope of the proposed new 

product or products, and (2) assigning 

the proposed contracts to either the 

Market Dominant Product List or to the 

Competitive Product List. As part of this 

responsibility, the Commission also 

reviews the proposal for compliance 

with PAEA requirements. This includes, 

for proposed competitive products, a 

review of the provisions applicable to 

rates for competitive products. 39 U.S.C. 

3633. 

Scope of the proposed product. The 

Postal Service is seeking to place on the 

Competitive Product List a product that 

would encompass all mailer-specific 

agreements for Priority Mail. The 

proposed requirements for that 

negotiated service agreement product 

entitled ‘‘Priority Mail Contract Group’’ 

are as follows: (1) The agreement must 

be for Priority Mail service, and (2) the 

cost coverage for the particular contract 

must fall within a specified, broad 

range. Request, Attachment 1 and 

Attachment A. The Public 

Representative and UPS argue that the 

scope of this proposed new product is 

too broad, and that classifying all five 

Priority Mail contracts at issue in this 

case (and future Priority Mail contracts 

satisfying the above criteria) as a single 

product is inappropriate. 

39 U.S.C. 102(6) defines the term 

‘‘product’’ as ‘‘a postal service with a 

distinct cost or market characteristic for 

which a rate or rates are, or may 

reasonably be, applied[.]’’ In Order No. 

43, the Commission found, after 

providing the public with several 

rounds of notice and comment in a 

rulemaking proceeding, that each 

negotiated service agreement would be 

treated as a separate product except in 

very limited circumstances. Order No. 

43, paras. 1003, 2177. With respect to 

these limited circumstances, the 

Commission stated that ‘‘it may be 

appropriate to group functionally 

equivalent negotiated service 

agreements as a single product if it can 

be shown that they have similar cost 

and market characteristics.’’ Id. para. 

2177. After consideration of conflicting 

arguments from several commenters, the 

Commission found that this method of 

treating negotiated service agreements 

as separate products was an appropriate 

way to balance the PAEA’s competing 

goals. The Commission noted: 

This treatment affords the Postal Service 

flexibility to enter into any special 

classification it wishes, but provides the 

necessary transparency to satisfy relevant 

business and regulatory needs. Absent the 

discipline that such accountability imposes, 

both the Postal Service and the Commission 

roles under the PAEA may be compromised. 

For example, the Postal Service may lack 

agreement-specific details on profitability of 

the agreement, while the Commission would 

be unable to assess whether the agreement 

complied with the statute. 

Order No. 26, para. 3079. Allowing 

negotiated service agreements to be 

placed into only a few products ‘‘forfeits 

transparency and serves no legitimate 

business or regulatory need * * *[and] 

it will not provide for accountability, a 

bedrock principle underlying the 

PAEA.’’ Id. para. 3070. In particular, as 

UPS notes, too broadly defining a 

product would diminish the 

effectiveness of the Commission’s 

review of the Postal Service’s annual 

compliance report since the 

Commission’s annual compliance 

determination focuses on compliance at 

the product level. See 39 U.S.C. 

3652(a)(1), 3653(b)(1). 

Negotiated service agreements may be 

treated as part of the same product, but 

only when they have similar cost and 

market characteristics. Although the 

Postal Service characterizes the 

differences between the contracts and 

contractual partner profiles as ‘‘minor,’’ 

the Commission is not persuaded that 

the differences are sufficiently minor as 

to allow treatment as a single product. 

The proposed ‘‘Priority Mail Contract 

Group’’ is too encompassing to ensure 

that the contracts have similar cost and 

market characteristics. The proposed 

Priority Mail Contract Group product 

would treat all Priority Mail contracts as 

one product so long as the anticipated 

cost coverage of each contract falls 

within a given, broad range. As UPS 

notes, no other qualifications apply. 

The proposed draft Mail Classification 

Schedule language states that: 

Each individual contract will specify the 

applicable rates, any postage payment 

methods required, whether any volume 

minimums apply, whether packaging is 

provided by the Postal Service, the length of 

the contract and any price adjustment 

mechanism, and any other customized terms 

or conditions applicable to the provision of 

Priority Mail service at the negotiated rates. 

Request at Attachment 1, Attachment A. 

Each of the five characteristics listed 

have potential cost and/or market 

implications. For example, as UPS 

points out, ‘‘[a] contract that will be in 

effect for only the summer of 2009 

Federal Register / Vol. 74, No. 125 / Wednesday, July 1, 2009 / Rules and Regulations 31377 

10The Postal Service correctly points out that 

Priority Mail (dealing with rates of general 

applicability) is a broad, distinct product. However, 

a broad Priority Mail product of general 

applicability does not raise the same concerns, 

discussed above and in Order Nos. 26 and 43, as 

multiple mailer specific contracts ‘‘expected’’ to 

achieve a cost coverage target. 

11 In contrast, the Commission has approved the 

grouping of several similar contracts within the 

same product in the international arena (although 

there may be distinctions between domestic and 

international services provided by the Postal 

Service which need to be taken into account). See, 

e.g., Docket Nos. CP2008–11, 12, 13, 18–21, 23, 25; 

CP2009–1, 15, 16 (GEPS 1 Product); Docket Nos. 

CP2009–10, 11, 29 (Global Direct Product); Docket 

No. CP2009–10 (Global Plus 1 Product); and Docket 

No. CP2009–17 (Global Plus 2 Product). 

12Postal Service Comments at 4. The Postal 

Service does not contend that the absence of a 

statutory or regulatory timeline is the primary or 

even a significant factor in causing difficulties in 

implementing contracts and maintaining customers; 

instead it states that its difficulties are due to 

‘‘various uncertainties.’’ Id. 

13 Docket No. CP2009–30, Notice, Attachment A 

at 5 (signed by the Postal Service on February 17, 

2009); Docket No. CP2009–31, Notice, Attachment 

A at 5 (signed by the Postal Service on February 25, 

2009); and Docket No. CP2009–33, Notice, 

Attachment A at 5 (signed by the Postal Service on 

February 4, 2009). 

would not have the same market or cost 

characteristics as contracts that will be 

in effect for all seasons of the year.’’ 

UPS Comments at 2. Other criteria not 

identified in the proposed product 

description language that may have 

distinct cost and/or market 

characteristics include shape, weight, 

and dropshipping. 

The proposed catch-all provision 

allowing future contracts to contain 

‘‘any other customized terms or 

conditions’’ is also problematic. It is so 

expansive as to be unknowable, but 

presumably would justify any Priority 

Mail piece meeting the cost coverage 

range to fall within the proposed 

product. This catch-all approach is far 

too wide-ranging to allow the 

Commission to conclude that there are 

similar cost characteristics in the 

potential contractual partners’ mailing 

profiles. 

Additionally, if the Postal Service is 

suggesting that all contractual partners 

that use Priority Mail exhibit similar 

market characteristics, that contention 

has no support.10 The Commission does 

not view mailings with significantly 

different costs or mailings sent by 

mailers with different market 

characteristics as functionally 

equivalent, notwithstanding that their 

cost coverages are within a wide, given 

range. 

For the reasons discussed above, the 

Postal Service’s proposed Priority Mail 

Contract Group is too broad to be 

considered a single product. Below, the 

Commission addresses the contracts 

filed in Docket Nos. CP2009–30 through 

34 to determine if the agreement should 

be placed on the product list as a 

separate product or if several of the 

agreements can be placed on the 

product list as one product on the basis 

of functional equivalency. 

Functional equivalence. The Postal 

Service contends that the four contracts 

are functionally equivalent to the one 

submitted in Docket No. CP2009–30 and 

that, accordingly, all should be grouped 

under the same product. Notices at 1; 

Postal Service Comments at 2. It appears 

to be implicitly arguing that the 

contracts share the same cost and 

market characteristics as the one 

submitted in Docket No. CP2009–30. 

See Postal Service Comments at 1–2. It 

points out that the differences between 

the contracts relate to negotiated prices, 

the postage payment method, the 

provision of packaging, the term of the 

contract, and mail entry requirements. 

Id. at 2 (citing Notices at 1). It 

characterizes these differences as 

‘‘minor.’’ Id. The Commission has 

reviewed the five contracts and, for the 

same reasons that it found the Priority 

Mail Contract Group proposed product 

to be overbroad, finds that none of these 

contracts may be appropriately 

classified within the same product. 

Accordingly, these contracts will be 

treated as separate products (Priority 

Mail Contract 6 through Priority Mail 

Contract 10).11

Timelines for review under 39 U.S.C. 

3642. The Postal Service implies that 

the absence of a statutory or regulatory 

timeline for the Commission’s review 

under 39 U.S.C. 3642 has contributed to 

‘‘difficulties in implementing contracts 

and maintaining customers[.]’’ 12 The 

Postal Service correctly notes that 

proceedings under 39 CFR 3015.5 

require at least 15 days’ notice prior to 

the effective date, while 39 CFR 3020 

subpart B proceedings do not have a 

definite timeframe. However, the 

Commission has consistently processed 

39 CFR 3020 subpart B filings 

expeditiously. Since the first post-PAEA 

domestic competitive rate contract was 

filed, the Commission has issued its 

final decision in 39 CFR 3020 subpart B 

proceedings in an average of 21 days. 

Overall, the Commission’s average 

review period for competitive contracts 

in section 3642 proceedings is 27 days. 

These timeframes undoubtedly could be 

shortened if the initial filings were fully 

supported by all relevant information. 

See, e.g., Docket Nos. MC2009–21 and 

CP2009–26, Order Concerning Priority 

Mail Contract 5 Negotiated Service 

Agreement, March 30, 2009, at 6. (‘‘The 

electronic files submitted in support of 

the Request did not include all 

supporting data. Future requests must 

provide all electronic files showing 

calculations in support of the financial 

models associated with the request. A 

failure to provide such information may 

delay resolution of requests in the 

future.’’) 

Taking into account these filings 

represent new products and that the 

public is entitled to a reasonable 

opportunity to comment on these 

proposals, the Commission’s record 

demonstrates that it acts quickly on 

Postal Service requests to add new 

competitive negotiated service 

agreement products to the Competitive 

Product List. Moreover, while the 

Commission appreciates the Postal 

Service’s desire to move quickly, it 

would appear that delay in 

implementation is often not due to 

Commission proceedings. 

For example, three of the five 

contracts filed in this case in May 2009 

were countersigned by the Postal 

Service in February of 2009.13

Additionally, the Governors’ Decision 

associated with these agreements was 

issued at the end of April 2009, yet the 

contracts were not filed with the 

Commission for approval until 22 days 

later. Request, Attachment 1. 

As has been discussed in other 

contexts, the Commission and the 

Governors have different, 

complementary responsibilities. The 

Commission does recognize the Board of 

Governors’ concerns in administering 

such agreements. As stated in Order No. 

217, it is the Commission’s view that 

Governors’ Decision 09–6 may be used 

to authorize future Priority Mail 

agreements that satisfy the broad 

parameters set out in Governors’ 

Decision 09–6. Based on the parameters 

of Governors’ Decision 09–6, the Postal 

Service may seek to add future nonfunctionally equivalent Priority Mail 

contracts to the Competitive Product 

List by filing new, joint ‘‘MC’’ and ‘‘CP’’ 

dockets. Governors’ Decision 09–6 

would then satisfy the requirements of 

39 CFR 3020.31(b) and 39 U.S.C. 3642. 

In those cases, however, the Postal 

Service still should file supporting 

justification as required by 39 CFR 

3020.32 to justify the particular contract 

or group of contracts for that narrower 

product grouping. 

Product list assignment. In 

determining whether to assign Priority 

Mail Contract 6 through Priority Mail 

Contract 10 as products to the Market 

Dominant Product List or the 

Competitive Product List, the 

Commission must consider whether: 

31378 Federal Register / Vol. 74, No. 125 / Wednesday, July 1, 2009 / Rules and Regulations 

The Postal Service exercises sufficient 

market power that it can effectively set the 

price of such product substantially above 

costs, raise prices significantly, decrease 

quality, or decrease output, without risk of 

losing a significant level of business to other 

firms offering similar products. 

39 U.S.C. 3642(b)(1). If so, the particular 

product will be categorized as market 

dominant. The competitive category of 

products shall consist of all other 

products. 

The Commission is further required to 

consider the availability and nature of 

enterprises in the private sector engaged 

in the delivery of the product, the views 

of those who use the product, and the 

likely impact on small business 

concerns. 39 U.S.C. 3642(b)(3). 

The Postal Service asserts that, for 

these contracts, its bargaining position 

is constrained by the existence of other 

shippers who can provide similar 

services, thus precluding it from taking 

unilateral action to increase prices 

without the risk of losing volume to 

private companies. Request, Attachment 

2, at 2. The Postal Service also contends 

that it may not decrease quality or 

output without risking the loss of 

business to competitors that offer 

similar expedited delivery services. Id. 

It further states that shippers typically 

support the addition of their agreements 

to the product list to effectuate the 

negotiated contractual terms. Id. at 3. 

Finally, the Postal Service states that the 

market for expedited delivery services is 

highly competitive and requires a 

substantial infrastructure to support a 

national network. It indicates that large 

carriers serve this market. Accordingly, 

the Postal Service states that it is 

unaware of any small business concerns 

that could offer comparable service for 

this customer. Id. 

No commenter opposes the proposed 

classification of Priority Mail Contract 6 

through Priority Mail Contract 10 as 

competitive. Having considered the 

statutory requirement and the support 

offered by the Postal Service, the 

Commission finds that Priority Mail 

Contract 6, Priority Mail Contract 7, 

Priority Mail Contract 8, Priority Mail 

Contract 9, and Priority Mail Contract 

10 are appropriately classified as 

competitive products and should be 

added to the Competitive Product List. 

Cost considerations. The Postal 

Service’s filings seek to establish new 

domestic negotiated service agreement 

products using Priority Mail. The 

contracts are predicated on unit costs 

for major mail functions, e.g., window 

service, mail processing, and 

transportation, based on the shipper’s 

mail characteristics. Governors’ 

Decision, Attachment B. 

The Postal Service contends that its 

financial analysis shows that each of 

these five contracts cover its attributable 

costs, do not result in subsidization of 

competitive products by market 

dominant products, and increases 

contribution from competitive products. 

See Notices, Attachment B. 

Based on the data submitted and the 

comments received, the Commission 

finds that each of the five proposed 

Priority Mail contracts at issue in this 

case should cover its respective 

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, an initial 

review of the five proposed Priority 

Mail contracts at issue in this case 

indicates that each comports with the 

provisions applicable to rates for 

competitive products. 

Termination dates. The Postal Service 

shall promptly notify the Commission 

when each contract terminates, but no 

later than the actual termination date. 

The Commission will then remove the 

contract from the Mail Classification 

Schedule at the earliest possible 

opportunity. 

In conclusion, the Commission 

approves Priority Mail Contract 6 

(MC2009–25 and CP2009–30), Priority 

Mail Contract 7 (MC2009–25 and 

CP2009–31), Priority Mail Contract 8 

(MC2009–25 and CP2009–32), Priority 

Mail Contract 9 (MC2009–25 and 

CP2009–33), and Priority Mail Contract 

10 (MC2009–25 and CP2009–34) as new 

products. The revision to the 

Competitive Product List is shown 

below the signature of this Order and is 

effective upon issuance of the order. 

V. Ordering Paragraphs 

It is Ordered: 

1. Priority Mail Contract 6 (MC2009– 

25 and CP2009–30), Priority Mail 

Contract 7 (MC2009–25 and CP2009– 

31), Priority Mail Contract 8 (MC2009– 

25 and CP2009–32), Priority Mail 

Contract 9 (MC2009–25 and CP2009– 

33), and Priority Mail Contract 10 

(MC2009–25 and CP2009–34) are added 

to the Competitive Product List as new 

products under Negotiated Service 

Agreements, Domestic. 

2. The Postal Service shall notify the 

Commission of the termination date of 

each contract filed in Docket Nos. 

CP2009–30, CP2009–31, CP2009–32, 

CP2009–33, and CP2009–34 as 

discussed in this order. 

3. The Secretary shall arrange for the 

publication of this order in the Federal 

Register. 

List of Subjects in 39 CFR Part 3020 

Administrative practice and 

procedure; Postal Service. 

By the Commission. 

Steven W. Williams, 

Secretary. 

■ For the reasons stated in the preamble, 

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

Postal Regulatory Commission amends 

39 CFR part 3020 as follows: 

PART 3020—PRODUCT LISTS 

■ 1. The authority citation for part 3020 

continues to read as follows: 

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

3682. 

■ 2. Revise Appendix A to Subpart A of 

Part 3020—Mail Classification to read as 

follows: 

Appendix A to Subpart A of Part 

3020—Mail Classification 

Schedule 

Part A—Market Dominant Products 

1000 Market Dominant Product List 

First-Class Mail 

Single-Piece Letters/Postcards 

Bulk Letters/Postcards 

Flats 

Parcels 

Outbound Single-Piece First-Class Mail 

International 

Inbound Single-Piece First-Class Mail 

International 

Standard Mail (Regular and Nonprofit) 

High Density and Saturation Letters 

High Density and Saturation Flats/Parcels 

Carrier Route 

Letters 

Flats 

Not Flat-Machinables (NFMs)/Parcels 

Periodicals 

Within County Periodicals 

Outside County Periodicals 

Package Services 

Single-Piece Parcel Post 

Inbound Surface Parcel Post (at UPU rates) 

Bound Printed Matter Flats 

Bound Printed Matter Parcels 

Media Mail/Library Mail 

Special Services 

Ancillary Services 

International Ancillary Services 

Address List Services 

Caller Service 

Change-of-Address Credit Card 

Authentication 

Confirm 

International Reply Coupon Service 

International Business Reply Mail Service 

Money Orders 

Post Office Box Service 

Negotiated Service Agreements 

HSBC North America Holdings Inc. 

Negotiated Service Agreement 

Bookspan Negotiated Service Agreement 

Federal Register / Vol. 74, No. 125 / Wednesday, July 1, 2009 / Rules and Regulations 31379 

Bank of America corporation Negotiated 

Service Agreement 

The Bradford Group Negotiated Service 

Agreement 

Inbound International 

Canada Post—United States Postal Service 

Contractual Bilateral Agreement for 

Inbound Market Dominant Services 

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] 

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) 

Inbound International Expedited Services 2 

(MC2009–10 and CP2009–12) 

Priority Mail 

Priority Mail 

Outbound Priority Mail International 

Inbound Air Parcel Post 

Royal Mail Group Inbound Air Parcel Post 

Agreement 

Parcel Select 

Parcel Return Service 

International 

International Priority Airlift (IPA) 

International Surface Airlift (ISAL) 

International Direct Sacks—M-Bags 

Global Customized Shipping Services 

Inbound Surface Parcel Post (at non-UPU 

rates) 

Canada Post—United States Postal service 

Contractual Bilateral Agreement for 

Inbound Competitive Services (MC2009– 

8 and CP2009–9) 

International Money Transfer Service 

International Ancillary Services 

Special Services 

Premium Forwarding Service 

Negotiated Service Agreements 

Domestic 

Express Mail Contract 1 (MC2008–5) 

Express Mail Contract 2 (MC2009–3 and 

CP2009–4) 

Express Mail Contract 3 (MC2009–15 and 

CP2009–21) 

Express Mail & Priority Mail Contract 1 

(MC2009–6 and CP2009–7) 

Express Mail & Priority Mail Contract 2 

(MC2009–12 and CP2009–14) 

Express Mail & Priority Mail Contract 3 

(MC2009–13 and CP2009–17) 

Express Mail & Priority Mail Contract 4 

(MC2009–17 and CP2009–24) 

Express Mail & Priority Mail Contract 5 

(MC2009–18 and CP2009–25) 

Parcel Return Service Contract 1 (MC2009– 

1 and CP2009–2) 

Priority Mail Contract 1 (MC2008–8 and 

CP2008–26) 

Priority Mail Contract 2 (MC2009–2 and 

CP2009–3) 

Priority Mail Contract 3 (MC2009–4 and 

CP2009–5) 

Priority Mail Contract 4 (MC2009–5 and 

CP2009–6) 

Priority Mail Contract 5 (MC2009–21 and 

CP2009–26) 

Priority Mail Contract 6 (MC2009–25 and 

CP2009–30) 

Priority Mail Contract 7 (MC2009–25 and 

CP2009–31) 

Priority Mail Contract 8 (MC2009–25 and 

CP2009–32) 

Priority Mail Contract 9 (MC2009–25 and 

CP2009–33) 

Priority Mail Contract 10 (MC2009–25 and 

CP2009–34 

Outbound International 

Global Direct Contracts (MC2009–9, 

CP2009–10, and CP2009–11) 

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) 

31380 Federal Register / Vol. 74, No. 125 / Wednesday, July 1, 2009 / Rules and Regulations 

Inbound International 

Inbound Direct Entry Contracts with 

Foreign Postal Administrations 

(MC2008–6, CP2008–14 and CP2008–15) 

International Business Reply Service 

Competitive Contract 1 (MC2009–14 and 

CP2009–20) 

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 non-UPU 

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] 

Part C—Glossary of Terms and Conditions 

[Reserved] 

Part D—Country Price Lists for International 

Mail [Reserved] 

[FR Doc. E9–15469 Filed 6–30–09; 8:45 am] 

BILLING CODE 7710–FW–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 271 

[EPA–R02–RCRA–2009–0346; FRL–8916–7] 

New York: Final Authorization of State 

Hazardous Waste Management 

Program Revision 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Immediate final rule. 

SUMMARY: New York State has applied to 

EPA for final authorization of changes to 

its hazardous waste program under the 

Solid Waste Disposal Act, as amended, 

commonly referred to as Resource 

Conservation and Recovery Act (RCRA). 

EPA has determined that these changes, 

with limited exceptions, satisfy all 

requirements needed to qualify for final 

authorization, and is authorizing the 

State’s changes through this immediate 

final action. EPA is publishing this rule 

to authorize the changes without a prior 

proposal because we believe this action 

is not controversial and do not expect 

comments that oppose it. Unless we 

receive written comments which oppose 

this authorization during the comment 

period, the decision to authorize New 

York’s changes to its hazardous waste 

program will take effect as provided 

below. If we receive comments that 

oppose this action, we will publish a 

document in the Federal Register 

withdrawing this rule, or the portion of 

the rule that is the subject of the 

comments, before it takes effect and a 

separate document in the proposed 

rules section of this Federal Register 

will serve as a proposal to authorize the 

changes. 

DATES: This final authorization will 

become effective on August 31, 2009 

unless EPA receives adverse written 

comment by July 31, 2009. If EPA 

receives such comment, it will publish 

a timely withdrawal of this immediate 

final rule or those paragraphs or 

sections of this rule which are the 

subject of the comments opposing the 

authorization in the Federal Register 

and inform the public that only the 

portion of the rule that is not withdrawn 

will take effect. (See Section E of this 

rule for further details). 

ADDRESSES: Submit your comments, 

identified by EPA–R02–RCRA–2009– 

0346, by one of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the on-line 

instructions for submitting comments. 

• E-mail: infurna.michael@.epa.gov. 

• Fax: (212) 637–4437. 

• Mail: Send written comments to 

Michael Infurna, Division of 

Environmental Planning and Protection, 

EPA, Region 2, 290 Broadway, 22nd 

Floor, New York, NY 10007. 

• Hand Delivery or Courier: Deliver 

your comments to Michael Infurna, 

Division of Environmental Planning and 

Protection, EPA, Region 2, 290 

Broadway, 22nd Floor, New York, NY 

10007. Such deliveries are only 

accepted during the Regional Office’s 

normal hours of operation. The public is 

advised to call in advance to verify the 

business hours. Special arrangements 

should be made for deliveries of boxed 

information. 

Instructions: Direct your comments to 

Docket ID No. EPA–R02–RCRA–2009– 

0346. EPA’s policy is that all comments 

received will be included in the public 

docket without change and may be 

made available on-line at http:// 

www.regulations.gov, including any 

personal information provided, unless 

the comment includes information 

claimed to be Confidential Business 

Information (CBI) or other information 

whose disclosure is restricted by statute. 

Do not submit information that you 

consider to be CBI or otherwise 

protected through http:// 

www.regulations.gov, or e-mail. The 

Federal http://www.regulations.gov Web 

site is an ‘‘anonymous access’’ system, 

which means EPA will not know your 

identity or contact information unless 

you provide it in the body of your 

comment. If you send an e-mail 

comment directly to EPA without going 

through http://www.regulations.gov, 

your e-mail address will be 

automatically captured and included as 

part of the comment that is placed in the 

public docket and made available on the 

Internet. If you submit an electronic 

comment, EPA recommends that you 

include your name and other contact 

information in the body of your 

comment and with any disk or CD–ROM 

you submit. If EPA cannot read your 

comment due to technical difficulties, 

and cannot contact you for clarification, 

EPA may not be able to consider your 

comment. Electronic files should avoid 

the use of special characters or any form 

of encryption, and be free of any defects 

or viruses. (For additional information 

about EPA’s public docket, visit the EPA 

Docket Center homepage at http:// 

www.epa.gov/epahome/dockets.htm). 

Docket: All documents in the docket 

are listed in the http:// 

www.regulations.gov index. Although 

listed in the index, some information is 

not publicly available, e.g., CBI or other 

information whose disclosure is 

restricted by statute. Certain other 

material, such as copyrighted material, 

will be publicly available only in hard 

copy. Publicly available docket