[Federal Register Volume 77, Number 232 (Monday, December 3, 2012)]
[Notices]
[Pages 71643-71644]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-29067]
-----------------------------------------------------------------------
POSTAL REGULATORY COMMISSION
[Docket No. R2013-1; Order No.1556]
Standard Mail Pricing
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Commission is noticing a recent Postal Service filing
concerning Standard Mail pricing and related matters. This notice
informs the public of the filing, invites public comment, and takes
other administrative steps.
DATES: Comments are due: December 4, 2012.
ADDRESSES: Submit comments electronically via the Commission's Filing
Online system at http://www.prc.gov. Those who cannot submit comments
electronically should contact the person identified in the FOR FURTHER
INFORMATION CONTACT section by telephone for advice on filing
alternatives.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel,
at 202-789-6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Summary of Proposed Changes to Standard Mail Rates
III. Nonprofit Discounts
IV. Mail Classification Schedule Changes (MCS)
V. Administrative Actions
I. Background
In Order No. 1541, the Commission determined provisionally that,
pursuant to 39 CFR 3010.13(j), the planned adjustments do not violate
the price cap in 39 U.S.C. 3622(d); are consistent with, or justified
by an exception to, the workshare discount limitations in 39 U.S.C.
3622(e); and establish prices that satisfy 39 U.S.C. 3626.\1\ In
addition, however, the Commission found that the planned Standard Mail
Flats rates failed to satisfy the applicable directives set forth in
the FY 2010 Annual Compliance Determination (ACD), which were further
clarified and reaffirmed in Order No. 1427 and Order No. 1472.\2\ Order
No. 1541 at 2. Accordingly, the Commission remanded all Standard Mail
rates to allow the Postal Service to modify its planned rates to comply
with the FY 2010 ACD and applicable statutory standards. In addition,
the Commission requested the Postal Service to respond to certain other
rate matters, each of which is discussed below.
---------------------------------------------------------------------------
\1\ Order No. 1541, Order on Price Adjustments for Market
Dominant Products and Related Mail Classification Changes, November
16, 2012 (Order No. 1541).
\2\ Docket No. ACR2010, Order on Remand, August 9, 2012 (Order
No. 1427); Docket No. ACR2010-R, Notice and Order Confirming
Termination of Stay, September 21, 2012 (Order No. 1472).
---------------------------------------------------------------------------
Pursuant to Order No. 1541, on November 26, 2012, the Postal
Service filed revised prices for Standard Mail Flats.\3\ It also
addressed the miscellaneous rate matters discussed in Order No. 1541.
---------------------------------------------------------------------------
\3\ United States Postal Service Response to Order No. 1541,
November 26, 2012 (Response).
---------------------------------------------------------------------------
II. Summary of Proposed Changes to Standard Mail Rates
The revised prices for Standard Mail Flats reflect an above-average
increase of 2.617 percent. No other Standard Mail prices were changed.
Response at 3.
The following table presents the Postal Service's planned
percentage price changes for Standard Mail products.
Standard Mail Price Changes
------------------------------------------------------------------------
Percent
Standard mail product change (%)
------------------------------------------------------------------------
Letters.................................................... 2.610
Flats...................................................... 2.617
Parcels.................................................... 3.081
High Density/Saturation Letters............................ 2.059
High Density/Saturation Flats and Parcels.................. 2.092
Carrier Route.............................................. 2.907
Overall.................................................... 2.569
------------------------------------------------------------------------
To achieve the above-average price increase for the Standard Mail
Flats product, the Postal Service made two principal changes to its
initially filed planned Standard Mail Flats price adjustments. First,
it reduced the prebarcoding discount between automation and non-
automation Flats from 7.5 to 5.5 cents. Second, the Postal Service used
the correct avoided cost of 4.6 cents for automation 3-Digit Flats. Id.
at 3-4. As a result of these changes, some rate cells would receive a
price decrease, so a number of minor mechanical adjustments were also
made to mitigate the deviation from the desired overall price increase.
Id. at 4.
[[Page 71644]]
The Postal Service acknowledges that the Commission's FY 2010 ACD
Order requested that the Postal Service provide `` `an explanation of
how the proposed prices will move the Flats cost coverage toward 100
percent' '' (footnote omitted). Id. It states that given the short
amount of time allowed to prepare revised rate adjustments and to
obtain Governors' approval, it has not been able to assess the full
impact on the revised price increase on Standard Mail Flats' projected
cost coverage. Id. It also states that although it is complying with
the Commission's directive by proposing an above-average price increase
for Standard Mail Flats, it believes that the Commission has
overstepped its authority by ordering such an increase. Id. at 5.
III. Nonprofit Discounts
In Order No. 1541, the Commission requested that the Postal Service
explain why different discount levels for Commercial and Nonprofit
Standard Mail are consistent with the Postal Accountability and
Enhancement Act (PAEA) and not contrary to National Easter Seal Society
v. USPS, 656 F.2d 754 (DC Cir 1981). Order No. 1541 at 51. The Postal
Service maintains that National Easter Seal Society did not hold that
phasing in nonprofit discounts would necessarily be discriminatory, but
rather simply required that the Postal Service have a reasonable ground
for the phased in schedule. Response at 6.
The Postal Service states that ``[t]he varying presort discounts
among Commercial and Nonprofit Standard Mail arise from the complex
task of designing rates that comply with 39 U.S.C. 3626(a)(6),'' which
requires that the average revenue per piece from nonprofit products
equal, as nearly as practicable, 60 percent of the average revenue per
piece from the corresponding Commercial products. Id. The complexity of
this task may ``preclude[] the Postal Service from making Nonprofit
presort discounts identical to Commercial presort discounts without
setting the Nonprofit base rate higher than would be most efficient or
preferable from a policy perspective.'' Id. at 7.
The Postal Service points out that, in both previous rate cases and
the current docket, some nonprofit discounts have varied from the
corresponding Commercial presort discounts. Id. The Postal Service also
filed updated pages reflecting worksharing discounts and benchmarks for
Flats, High Density and Saturation Letters, and High Density and
Saturation Flats/Parcels in Attachment B to its Response. It has shown
nonprofit discounts on a separate line when they differ from Commercial
discounts, along with the other discounts in the relevant category. Id.
Attachment B. The Postal Service states that the passthroughs for
nonprofit discounts are all at 100 percent or below, and can be
justified the same way as the corresponding Commercial discounts.\4\
Id. at 8.
---------------------------------------------------------------------------
\4\ The Postal Service also refers to Order No. 1541 n.65 in
Attachment C of its Response, regarding the High Density Plus rate
category.
---------------------------------------------------------------------------
IV. Mail Classification Schedule Changes (MCS)
In conformance with 39 CFR 3010.14(b)(9), the Postal Service
identifies changes to the Standard Mail Flats MCS. Attachment A to the
Response presents price and classification changes.
V. Administrative Actions
Public comment period. The Commission`s rules provide a period of
10 days from the date of the Postal Service's filing for public
comment. 39 CFR 3010.13(f). The Postal Service plans to implement the
planned prices on January 27, 2013. To permit the Commission to fully
consider this matter and to enable the Postal Service to provide the
requisite 45 day notice before implementing the planned prices, the
Commission finds it appropriate to shorten the comment period. Comments
by interested persons are due no later than December 4, 2012.
Interested persons are encouraged to review the Postal Service's
Response and workpapers in their entirety.
Pursuant to Commission rule 3010.13(f), comments should address
subjects identified in rule 3010.13(b) and may address the substance of
the Postal Service's Response.
Participation and designated filing method. Interested persons are
not required to file a notice of intervention prior to submitting
comments. Instead, they are to submit comments electronically via the
Commission's Filing Online system, unless a waiver is obtained.
Instructions for obtaining an account to file documents online may be
found on the Commission's Web site, (http://www.prc.gov), or by
contacting the Commission's docket section at [email protected] or
via telephone at 202-789-6846.
Persons without access to the Internet or otherwise unable to file
documents electronically may request a waiver of the electronic filing
requirement by filing a motion for waiver with the Commission. The
motion may be filed along with any comments the person may wish to
submit in this docket. Persons requesting a waiver may file hardcopy
documents with the Commission either by mailing or by hand delivery to
the Office of the Secretary, Postal Regulatory Commission, 901 New York
Avenue NW., Suite 200, Washington, DC 20268-0001 during regular
business hours by the date specified for such filing. Any person
needing assistance in requesting a waiver may contact the Commission's
docket section at [email protected] or via telephone at 202-789-6846.
Hardcopy documents will be scanned and posted on the Commission's Web
site.
Public Representative. Kenneth E. Richardson will continue to serve
as Public Representative in this proceeding.\5\
---------------------------------------------------------------------------
\5\ See Order No. 1501, Notice and Order on Planned Rate
Adjustments and Classification Changes for Market Dominant Postal
Products, October 15, 2012, at 16.
---------------------------------------------------------------------------
It is ordered:
1. Comments by interested persons on the planned price adjustments
are due no later than December 4, 2012.
2. The Commission directs the Secretary of the Commission to
arrange for prompt publication of this notice in the Federal Register.
By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. 2012-29067 Filed 11-30-12; 8:45 am]
BILLING CODE 7710-FW-P