[Federal Register Volume 74, Number 247 (Monday, December 28, 2009)]
[Rules and Regulations]
[Pages 68538-68541]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-30619]


=======================================================================
-----------------------------------------------------------------------

POSTAL SERVICE

39 CFR Part 111


Move Update Assessment Charges for Automation and Presort First-
Class Mail and All Standard Mail Mailings

AGENCY: Postal ServiceTM.

ACTION: Final rule, revised.

-----------------------------------------------------------------------

SUMMARY: The Postal Service issues this notice to revise the final rule 
that was published in the Federal Register on Tuesday, October 27, 2009 
providing new Move Update assessment procedures, and to clarify the 
Performance-Based Verification process.

DATES: Effective January 4, 2010.

FOR FURTHER INFORMATION CONTACT: Bill Chatfield, 202-268-7278.

SUPPLEMENTARY INFORMATION: 
    In the Federal Register final rule published October 27, 2009 (74 
FR 55140-42), the Postal Service provided notice of new Move Update 
assessment charges to be applied during the acceptance process. On 
November 25, 2009, the Postal Regulatory Commission (PRC) issued Order 
No. 348 on Move Update, which modified the Postal Service's requested 
Mail Classification Schedule (MCS) language filed on October 15, 2009. 
A change of address error tolerance of 30 percent was added to the MCS 
language, for determining whether a mailing fails the Move Update 
portion of the Performance-Based Verification (PBV) test.
    The Commission retained language about a $0.07 Move Update 
noncompliance charge for Standard Mail [supreg], and stated that this 
charge, rather than the difference between postage paid and the First-
Class Mail [supreg] single-piece price, would apply when Standard Mail 
mailers do not comply with the Move Update standard. The Commission's 
modifications affect the Move Update procedures published in the 
October 27, 2009 final rule. This change is effective January 4, 2010, 
and will be reflected in the next DMM update on February 1, 2010.
    Following are a background summary and descriptions of the changes 
and procedures for how Move Update assessment charges will be handled 
at the time of acceptance.

Background

    Mailers who claim presorted or automation prices for First-Class 
Mail, or claim any Standard Mail prices, must identify on the postage 
statement which Move Update method was used to ensure that the mailing 
meets the Move Update standard. Additionally, on each postage 
statement, mailers or their agents, must also affix their signature and 
certify that the mailing presented for acceptance qualifies for the 
prices claimed. The Move Update standard requires that a mailer 
participate in an approved Move Update process, and use the change of 
address information received through the approved Move Update process, 
to correct the mailing addresses in the mailing. This has been a 
longstanding requirement for First-Class Mail presort and automation 
prices; however, prior to November 2008 the frequency with which a 
mailer was required to participate in the Move

[[Page 68539]]

Update process and make the requisite address changes was within the 
185 days immediately preceding the date of mailing. In November 2008 
the frequency was reduced to the 95 days immediately preceding the date 
of mailing. The Move Update standard, including the 95 day frequency, 
was extended to include all Standard Mail in November 2008. If a mailer 
does not identify a Move Update method and certify compliance, then the 
Postal Service can reject the mailing, unless the mailer agrees to pay 
the First-Class Mail single-piece price.
    The Move Update standard is designed to reduce the number of 
mailpieces that require forwarding, return, or disposal as waste, thus 
reducing Postal Service costs. The standard also helps to assure that 
mail reaches its intended recipients in a timely manner.

Procedures

    PBV procedures introduced in Spring 2009 allow the Postal Service 
to sample mailings during the acceptance process to compare mailpiece 
addresses within the sample against the change of address information 
in the National Change of Address (NCOA [supreg]) database. For the 
Move Update portion of PBV, addresses on the verification sample are 
compared to the NCOA database. The ratio of the number of failed 
changes of address (COAs), addresses that should have been updated per 
Postal Service records, to the number of actual COAs (all changed 
addresses for addresses in the mailing) is calculated. If this ratio 
for the sample is sufficiently high, as detailed below, the mailing is 
subject to an additional postage charge, called the Move Update 
assessment charge. Mailers are offered the option of taking the mailing 
back and reworking it to avoid the Move Update assessment charge.
    The Move Update standard is not new. All known mailings of 
commercial First-Class Mail pieces that did not follow address updating 
requirements have been subject to single-piece First-Class Mail prices 
for each piece in the mailing since 1997. When the Move Update standard 
was first applied to Standard Mail in 2008, the same consequence would 
have applied to Standard Mail mailings when addresses were found not to 
have been updated. This would have meant a substantial increase in 
postage for Standard Mail mailings. To mitigate this effect, the Postal 
Service announced in 2008 that it would charge $0.07 per piece for all 
pieces in Standard Mail mailings which fail the Move Update PBV test. 
In addition, in its October 15, 2009 Notice filed with the Postal 
Regulatory Commission after extensive consultation with mailers, the 
Postal Service announced that the $0.07 charge would apply to a portion 
of a mailing that fails the Move Update PBV test, and that samples with 
five or fewer pieces that were not updated for a COA would not be 
subject to the assessment, regardless of the error rate.
    A provision for multi-client mailings is also included for the 
first year after implementation: a mailer submitting a combined multi-
client mailing that fails the Move Update verification may have 
additional postage attributed to individual clients, given certain 
conditions described in detail on the ribbs.usps.gov website. If the 
conditions are met, the Move Update Assessment Charge of $0.07 could 
apply to a different number of pieces, thus affecting the overall 
assessment charge for the mailing.
    The Move Update assessment charge was originally intended for May 
2009 implementation. However, in response to customer concerns, we 
deferred implementation until January 4, 2010, as announced in the 
April 6, 2009 Federal Register final rule notice. The Postal Service 
also decided to apply a $0.07 per piece additional postage charge for 
First-Class Mail pieces found in mailings with a Move Update error rate 
of greater than 30 percent based on Postal Service PBV samplings at 
acceptance, with the five-piece exception discussed above.
    The PBV process does not establish compliance or noncompliance with 
the Move Update standard; it is a tool that the Postal Service uses to 
test mailings. It is designed to facilitate the acceptance of mail in 
the event that the PBV Move Update process determines that a sample of 
the mailing has failed above a given tolerance. Mailers who believe the 
Move Update assessment charge was applied to their mailing(s) in error 
may appeal to the Pricing and Classification Service Center.
    The percentage of a mailing paying the additional charge is based 
on the percentage of failed sample pieces above the tolerance. Each 
assessed piece pays an additional $0.07. As examples, with a tolerance 
of 30 percent exempted from the charge:
     If 40% of COAs sampled are not updated, the charge is 
applied to 10% (= 40% - 30%) of the total mailing.
     If 80% of COAs sampled are not updated, the charge is 
applied to 50% (= 80% - 30%) of the total mailing.

Recap

    The following Domestic Mail Manual (DMM[supreg]) changes vary from 
the changes published in the October 27, 2009 Federal Register final 
rule. The application of the Move Update assessment charge is described 
directly, rather than by reference to the RIBBS Web site. The 
application of the Move Update noncompliance charge to a failure to 
comply with the Move Update standard would be determined outside of the 
PBV test at acceptance. Information about the noncompliance charge will 
be provided separately.
    The Postal Service adopts the following changes to Mailing 
Standards of the United States Postal Service, Domestic Mail Manual 
(DMM), incorporated by reference in the Code of Federal Regulations. 
See 39 CFR 111.1.

List of Subjects in 39 CFR Part 111

    Administrative practice and procedure, Postal Service.

0
Accordingly, 39 CFR part 111 is amended as follows:

PART 111--[AMENDED]

0
1. The authority citation for 39 CFR part 111 continues to read as 
follows:

    Authority:  5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 414, 
416, 3001-3011, 3201-3219, 3403-3406, 3621, 3622, 3626, 3632, 3633, 
and 5001.

0
2. Revise the following sections of Mailing Standards of the United 
States Postal Service, Domestic Mail Manual (DMM) as follows:

Mailing Standards of the United States Postal Service, Domestic Mail 
Manual (DMM)

* * * * *

200 Commercial Mail Letters and Cards

* * * * *

230 First-Class Mail

233 Prices and Eligibility

* * * * *

3.0 Basic Standards for First-Class Mail Letters

* * * * *

3.5 Move Update Standard

* * * * *
    [Add new 3.5.4 to read as follows:]

3.5.4 Basis for Move Update Assessment Charge

    Mailings are subject to a Move Update assessment charge if more 
than 30 percent of addresses with a change of address (COA) are not 
updated, based on the error rate found in USPS sampling at acceptance 
during Performance-Based Verification. Specifically, mailings for which 
the

[[Page 68540]]

sample contains greater than 30 percent failed COAs out of the total 
COAs are subject to additional postage charges as follows:
    a. The percentage of the mailing paying the charge is based on the 
percentage of failed pieces above 30 percent.
    b. Each of the assessed pieces is subject to the $0.07 per piece 
charge.
    c. As an example, if 40% of COAs in the sample are not updated, 
then the charge is applied to 10% (= 40% - 30%) of the total mailing.
    d. Mailings for which the sample has five or fewer pieces that were 
not updated for a COA are not subject to the assessment, regardless of 
the failure percentage.
* * * * *

240 Standard Mail

243 Prices and Eligibility

* * * * *

3.0 Basic Standards for Standard Mail Letters

* * * * *

3.9 Move Update Standard

3.9.1 Basic Standards

    * * * Addresses subject to the Move Update standard must meet these 
requirements:
* * * * *
    [Delete item 3.9.1.d in its entirety.]
* * * * *
    [Add new 3.9.4 to read as follows:]

3.9.4 Basis for Move Update Assessment Charge

    Mailings are subject to a Move Update assessment charge if more 
than 30 percent of addresses with a change of address (COA) are not 
updated, based on the error rate found in USPS sampling at acceptance 
during Performance-Based Verification. Specifically, mailings for which 
the sample contains greater than 30 percent failed COAs out of the 
total COAs are subject to additional postage charges as follows:
    a. The percentage of the mailing paying the charge is based on the 
percentage of failed pieces above 30 percent.
    b. Each of the assessed pieces is subject to the $0.07 per piece 
charge.
    c. As an example, if 40% of COAs in the sample are not updated, 
then the charge is applied to 10% (= 40% - 30%) of the total mailing.
    d. Mailings for which the sample has five or fewer pieces that were 
not updated for a COA are not subject to the assessment, regardless of 
the failure percentage.
* * * * *

300 Commercial Mail Flats

* * * * *

330 First-Class Mail

333 Prices and Eligibility

* * * * *

3.0 Eligibility Standards for First-Class Mail Flats

* * * * *

3.5 Move Update Standards

* * * * *
    [Add new 3.5.4 to read as follows:]

3.5.4 Basis for Move Update Assessment Charge

    Mailings are subject to a Move Update assessment charge if more 
than 30 percent of addresses with a change of address (COA) are not 
updated, based on the error rate found in USPS sampling at acceptance 
during Performance-Based Verification. Specifically, mailings for which 
the sample contains greater than 30 percent failed COAs out of the 
total COAs are subject to additional postage charges as follows:
    a. The percentage of the mailing paying the charge is based on the 
percentage of failed pieces above 30 percent.
    b. Each of the assessed pieces is subject to the $0.07 per piece 
charge.
    c. As an example, if 40% of COAs in the sample are not updated, 
then the charge is applied to 10% (= 40% - 30%) of the total mailing.
    d. Mailings for which the sample has five or fewer pieces that were 
not updated for a COA are not subject to the assessment, regardless of 
the failure percentage.
* * * * *

340 Standard Mail

343 Prices and Eligibility

* * * * *

3.0 Basic Standards for Standard Mail Flats

* * * * *

3.9 Move Update Standard

3.9.1 Basic Standards

    * * * Addresses subject to the Move Update standard must meet these 
requirements:
* * * * *
    [Delete item 3.9.1 d in its entirety.]
* * * * *
    [Add new 3.9.4 to read as follows:]

3.9.4 Basis for Move Update Assessment Charge

    Mailings are subject to a Move Update assessment charge if more 
than 30 percent of addresses with a change of address (COA) are not 
updated, based on the error rate found in USPS sampling at acceptance 
during Performance-Based Verification. Specifically, mailings for which 
the sample contains greater than 30 percent failed changes of address 
(COAs) out of the total COA are subject to additional postage charges 
as follows:
    a. The percentage of the mailing paying the charge is based on the 
percentage of failed pieces above 30 percent.
    b. Each of the assessed pieces is subject to the $0.07 per piece 
charge.
    c. As an example, if 40% of COAs in the sample are not updated, 
then the charge is applied to 10% (= 40% - 30%) of the total mailing.
    d. Mailings for which the sample has five or fewer pieces that were 
not updated for a COA are not subject to the assessment, regardless of 
the failure percentage.
* * * * *

400 Commercial Parcels

* * * * *

430 First-Class Mail

433 Prices and Eligibility

* * * * *

3.0 Basic Standards for First-Class Mail Parcels

* * * * *

3.5 Move Update Standard

* * * * *
    [Add new 3.5.4 to read as follows:]

3.5.4 Basis for Move Update Assessment Charge

    Mailings are subject to a Move Update assessment charge if more 
than 30 percent of addresses with a change of address (COA) are not 
updated, based on the error rate found in USPS sampling at acceptance 
during Performance-Based Verification. Specifically, mailings for which 
the sample contains greater than 30 percent failed COAs out of the 
total COAs are subject to additional postage charges as follows:
    a. The percentage of the mailing paying the charge is based on the 
percentage of failed pieces above 30 percent.
    b. Each of the assessed pieces is subject to the $0.07 per piece 
charge.
    c. As an example, if 40% of COAs in the sample are not updated, 
then the

[[Page 68541]]

charge is applied to 10% (= 40%- 30%) of the total mailing.
    d. Mailings for which the sample has five or fewer pieces that were 
not updated for a COA are not subject to the assessment, regardless of 
the failure percentage.
* * * * *

440 Standard Mail

443 Prices and Eligibility

* * * * *

3.0 Basic Standards for Standard Mail Parcels

* * * * *

3.9 Move Update Standard

3.9.1 Basic Standards

    * * * Addresses subject to the Move Update standard must meet these 
requirements:
* * * * *
    [Delete item 3.9.1d in its entirety.]
* * * * *
    [Add new 3.9.4 to read as follows:]

3.9.4 Basis for Move Update Assessment Charge

    Mailings are subject to a Move Update assessment charge if more 
than 30 percent of addresses with a change of address (COA) are not 
updated, based on the error rate found in USPS sampling at acceptance 
during Performance-Based Verification. Specifically, mailings for which 
the sample contains greater than 30 percent failed COAs out of the 
total COAs are subject to additional postage charges as follows:
    a. The percentage of the mailing paying the charge is based on the 
percentage of failed pieces above 30 percent.
    b. Each of the assessed pieces is subject to the $0.07 per piece 
charge.
    c. As an example, if 40% of COAs in the sample are not updated, 
then the charge is applied to 10% (= 40%- 30%) of the total mailing.
    d. Mailings for which the sample has five or fewer pieces that were 
not updated for a COA are not subject to the assessment, regardless of 
the failure percentage.
* * * * *
    We will publish an appropriate amendment to 39 CFR part 111 to 
reflect these changes.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. E9-30619 Filed 12-22-09; 4:15 pm]
BILLING CODE 7710-12-P