[Federal Register Volume 77, Number 195 (Tuesday, October 9, 2012)]
[Proposed Rules]
[Pages 61307-61308]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-24706]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3001

[Docket No. RM2012-8; Order No. 1488]


New Postal Product

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is noticing a recently-filed Postal Service 
petition to initiate an informal rulemaking proceeding to consider 
changes in analytical principles (Proposals Eight and Nine) used in 
periodic reporting. This notice provides an opportunity for the public 
to comment on the potential changes.

DATES: Comments are due: October 29, 2012. Reply Comments are due: 
November 8, 2012.

ADDRESSES: Submit comments electronically via the Commission's Filing 
Online system at http:ww.prc.gov. Commenters who cannot submit their 
views electronically should contact the person identified in the FOR 
FURTHER INFORMATION CONTACT portion of the preamble for advice on 
alternatives to electronic filings.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
at 202-789-6824.

SUPPLEMENTARY INFORMATION: On September 28, 2012, the Postal Service 
filed a petition pursuant to 39 CFR 3050.11 requesting that the 
Commission initiate an informal rulemaking proceeding to consider 
changes in the analytical methods approved for use in periodic 
reporting.\1\ The Postal Service also requests that the Commission 
complete action on the petition by December 1, 2012, so that the 
proposed changes can be incorporated into the Annual Compliance Report 
(ACR) for FY 2012. Petition at 1.
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    \1\ Petition of the United States Postal Service for the 
Initiation of a Proceeding to Consider Proposed Changes in 
Analytical Principles (Proposals Eight and Nine), September 28, 2012 
(Petition).
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    Proposal Eight: Transfer Mail Processing Cost Model for Machinable 
and Irregular Standard Mail Parcels to the Mail Processing Cost Model 
for Parcel Select/Parcel Return Service. The Postal Service proposes to 
move the machinable and irregular cost worksheets contained in the 
Standard Mail parcel mail processing cost model to the Parcel Select/
Parcel Return Service mail processing cost model and to relabel the 
worksheets as ``Lightweight Parcel Select.'' Id. at 3. The Commission, 
in Docket No. MC2010-36, conditionally approved the transfer of the 
commercial Standard machinable and irregular parcel price categories 
from the market dominant product list to the competitive product list 
as ``Lightweight Parcel Select,'' a subcategory of Parcel Select.\2\ 
The transfer became effective with the implementation of new prices in 
January 2012.\3\ The Postal Service states that costs reported for FY 
2012 should reflect the incorporation of Lightweight Parcel Select into 
Parcel Select. Petition at 4.
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    \2\ Docket No. MC2010-36, Order Conditionally Granting Request 
to Transfer Commercial Standard Mail Parcels to the Competitive 
Product List, March 2, 2011 (Order No. 689). The Commission imposed 
``the following conditions: (1) The Postal Service files a notice of 
competitive price adjustment for Parcel Select rates, including 
Lightweight Parcel Select parcels, that demonstrates such rates 
satisfy 39 U.S.C. 3633(a) and 39 CFR part 3015; (2) the Commission 
issues an order finding that the Parcel Select rates in (1) above 
satisfy 39 U.S.C. 3633(a) and 39 CFR part 3015; and (3) the Standard 
Mail Parcels transfer authorized by this Order is not effective 
until the effective date of prices authorized in (b), above.'' Id. 
at 19.
    \3\ In Docket No. CP2012-2, the Commission approved an 8.9 
percent rate increase for Lightweight Parcel Select and found that 
the Postal Service had met the conditions set out in Order No. 689. 
Docket No. CP2012-2, Order No. 1062, Order Approving Changes in 
Rates of General Applicability for Competitive Products, at 4, 10-
13, December 21, 2011.
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    The Postal Service states that the proposed changes are solely 
mechanical in nature because the number of machinable and irregular 
price categories, as well as the presort level and destination entry 
point for each price category, have not changed as a result of the 
commercial Standard Mail parcel price categories being moved to the 
competitive products list. Id. at 3. The Postal Service also proposes 
that the Parcel Select and Lightweight Parcel Select model cost 
estimates be used to

[[Page 61308]]

de-average the mail processing cost by shape estimate for all Parcel 
Select in the FY 2012 ACR. Id.
    Proposal Nine: Modify First-Class Mail, Standard Mail, and 
Periodicals Flats Cost Models. The Postal Service proposes to make 
eight modifications to the Periodicals Flats model. The Postal Service 
also proposes to apply four of the modifications to the First-Class 
Mail and Standard Mail Flats models. Id. at 5. The Postal Service 
states that the model for each class is contained in library reference 
USPS-LR-RM2012-8/1, with the proposed modifications incorporated (via 
toggle switches).\4\ Some of the modifications are straightforward. 
Others, however, involve significant changes, particularly for 
Periodicals.
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    \4\ Id. According to the Postal Service, the impact of 
individual modifications can be estimated by manipulating the toggle 
switches. The Postal Service has not provided explicit estimates of 
the impact of individual modifications in Proposal Nine, nor has it 
provided an estimate of aggregate impact.
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    The first proposed modification removes the ability to isolate (via 
toggle switches) the effect of individual changes proposed in Docket 
No. RM2012-2. Id. Those changes were approved by the Commission. The 
Postal Service considers the switches to be superfluous. Id. This 
modification affects the models for all three classes.
    The second modification corrects what the Postal Service describes 
as ``cell referencing errors'' in the Periodicals model. Id.
    The third modification accounts for more sources of rejects and 
adjusts some reject rates to make them consistent with Management 
Operating Data System (MODS) estimates. Id. at 6-8. This modification 
affects the models for all three classes.
    The fourth modification accounts for changes in allied operations 
resulting from the introduction of the AFSM 100 and FSS. The 
modifications only apply to the Periodicals model. Id. at 9-10.
    The fifth modification creates class-specific FSS coverage factors. 
Each coverage factor is the ratio of MODS FSS total pieces fed (by 
class) to volume as reported in the Revenue, Pieces, and Weight report. 
Id. at 10-11. This modification affects the models for all three 
classes.
    The sixth modification removes the costs of sorting mail to post 
office boxes from all three flats models and designates these costs as 
``non-modeled.'' Id. at 11.
    The seventh modification updates the estimates of the average 
number of cross-dock movements by container type by entry facility for 
Periodicals. The update relies on Mail.dat files by publication and a 
Postal Service database of individual transportation routes. The Postal 
Service states that the new estimates are generally similar to those 
provided in Docket No. R2006-1. Id. at 11-15.
    The eighth modification uses the results of the seventh 
modification to simplify the development of costs by container type by 
entry facility for Periodicals. According to the Postal Service, simply 
having the number of facilities that a container passes through before 
it reaches the destination facility is sufficient to calculate the 
number of times the average container incurs each process. Id. at 15-
18.
    It is ordered:
    1. The Petition of the United States Postal Service Requesting 
Initiation of a Proceeding to Consider Proposed Changes in Analytical 
Principles (Proposals Eight and Nine), filed September 28, 2012, is 
granted.
    2. The Commission establishes Docket No. RM2012-8 to consider the 
matters raised by the Postal Service's Petition.
    3. Interested persons may submit comments on Proposals Eight and 
Nine no later than October 29, 2012.
    4. Reply comments are due no later than November 8, 2012.
    5. Lawrence Fenster is appointed to serve as the Public 
Representative to represent the interests of the general public in this 
proceeding.
    6. The Secretary shall arrange for publication of this notice in 
the Federal Register.

    By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. 2012-24706 Filed 10-5-12; 8:45 am]
BILLING CODE 7710-FW-P