[Federal Register Volume 78, Number 221 (Friday, November 15, 2013)]
[Notices]
[Pages 68868-68869]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-27282]


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POSTAL REGULATORY COMMISSION

[Docket No. R2014-1; Order No. 1873]


First-Class Mail Postage Payment Option

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is noticing a recent Postal Service filing 
concerning the addition of Alternate Postage Payment as a price 
category for First-Class Mail Single-Piece letters and cards. This 
notice informs the public of the filing, invites public comment, and 
takes other administrative steps.

DATES: Comments are due: November 25, 2013.

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. Introduction
II. Postal Service Filing
III. Commission Action
IV. Ordering Paragraphs

I. Introduction

    On November 5, 2013, the Postal Service filed a notice with the 
Commission announcing its intent to add Alternate Postage Payment as a 
price category for First-Class Mail Single-Piece letters and cards 
pursuant to 39 U.S.C. 3622 and 39 CFR part 3010.\1\ The classification 
and price adjustment will permit producers of First-Class Mail Single-
Piece letters and cards to prepay postage so that the mailer would not 
need to affix a stamp (Adjustment). Id. at 2. The Adjustment is 
proposed to take effect at 12:01 a.m. on January 1, 2014. Id. at 1.
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    \1\ United States Postal Service Notice of Market Dominant 
Classification and Price Changes for the Alternate Postage Payment 
Method, November 5, 2013 (Notice).
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II. Postal Service Filing

    Alternate Postage Payment category. The Postal Service plans to add 
Alternate Postage Payment as a price category for First-Class Mail 
Single-Piece letters and cards. Id. at 2. The Postal Service states 
that the Adjustment will permit producers of First-Class Mail Single-
Piece letters and cards to prepay the mailer's postage without the need 
for affixing a stamp. Id. Customers need only address the letter or 
card and drop it in a collection box. Id. at 3. Its simplicity will 
make customers more likely to mail greeting

[[Page 68869]]

cards and other correspondence. Id. The Adjustment will be a premium 
offering and will be priced above current First-Class Mail Single-Piece 
postage rates. Id.
    The Postal Service states that participating businesses will 
produce and distribute pre-approved envelopes and postcards according 
to specific design requirements established by the Postal Service and 
have the option of increasing the value of the pre-approved envelopes 
by applying a customized Picture Permit at no additional charge. Id. 
Postage will be paid by participating businesses in two stages: (1) An 
agreed upon prefunded portion of the total postage when the mailpiece 
is produced or distributed, and (2) the remaining portion when the 
Intelligent Mail barcode (IMb) on the mailpiece is scanned during 
normal processing. Id. IMb technology will be used to identify and 
count each mailpiece during processing, and once scanned, the 
participating business' Centralized Automated Processing System (CAPS) 
account will be debited. Id. After purchasing the pre-approved 
envelopes from participating businesses, individual customers can then 
mail the item without using regular postage. Id.
    The Postal Service states that it has been conducting research 
through the Alternate Postage Payment Method for Greeting Cards Market 
Test.\2\ The Postal Service asserts that the market test has been 
successful and demonstrates the demand for this service as well as 
verifying the Postal Service's ability to capture the scan data needed 
to collect postage from participating businesses. Notice at 4. The 
Postal Service has included as an attachment a redacted version of the 
most recent data from the Alternate Postage Market Test. Id. at 
Attachment B. In addition, the Postal Service filed as a non-public 
library reference an unredacted version of the most recent data from 
the Alternate Postage Market Test.\3\
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    \2\ See Docket No. MT2011-1, Order No. 617, Order Approving 
Market Test of Alternate Postage Payment Method for Greeting Cards, 
December 21, 2010; see also Docket No. MT2011-1, Order No. 1577, 
Order Granting Motion Concerning Market Test, December 13, 2012.
    \3\ See Notice of the United States Postal Service of Filing of 
Non-Public Library Reference USPS-LR-R2014-1/CP1, November 5, 2013. 
This filing also included an application for non-public treatment of 
materials.
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    The Postal Service proposes a tiered pricing approach. Notice at 5. 
The proposed pricing approach accommodates price tiers that require up 
to 20 percent, 21-50 percent, and over 50 percent of the postage to be 
prefunded. Id. at 5. The Postal Service also proposes to charge a 
slightly lower per-piece postage rate when companies choose a higher 
prefunding level, thus allowing businesses to choose a prefunding level 
based on their unique business needs. Id. It indicates the starting 
price differentials between tiers will be small, but may be adjusted in 
future filings based on customer response.
    The Postal Service provides the proposed pricing structure and 
requests that the Commission set the Alternate Postage rates as 
described in Table 1. Id. at 6. Due to the prevailing uncertainty 
surrounding First-Class Mail Single-Piece letter and card rates in 
2014, the Postal Service states that it does not intend for the 
Commission to set the Alternate Postage rates in this manner in 
subsequent years. Id. at n.9. In addition, as the ultimate Alternate 
Postage price is uncertain, the Postal Service has left prices listed 
in the Mail Classification Schedule (MCS) blank. Id., see also id. at 
Attachment A.
    Impact on the price cap. The Postal Service states that the planned 
prices have no impact on price cap issues because they do not change 
the prices for any existing First-Class Mail price categories. Id. at 
6. Therefore, it made no cap or price change calculations as described 
in rules 3010.14(b)(1) through (4). Id. at 7.
    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 the Adjustment does not substantially alter the 
degree to which First-Class Mail prices already address the objectives 
and factors. Id. at 7-11. In particular, the Postal Service contends 
that the Adjustment is an example of the increased pricing flexibility 
under the Postal Accountability and Enhancement Act (objective 4), and 
will encourage new mail volumes, which will have the effect of 
enhancing the financial position of the Postal Service (objective 5). 
Id. at 10. Similarly, the Postal Service claims that the Adjustment 
encourages increased mail volume (factors 1 and 7) and, by providing a 
more convenient option for sending letters and cards, with additional 
postage exceeding any additional costs, will help First-Class Mail 
cover attributable costs (factor 2). Id. at 10-11. Finally, the Postal 
Service states the Adjustment's use of an IMb to collect postage will 
promote use of Intelligent Mail (factor 13). Id. at 11.
    Workshare discounts and preferred rates. According to the Postal 
Service, the Adjustment will not impact current workshare discounts and 
no preferred rates are implicated. Id. at 11.
    Mail Classification Schedule (MCS). The Postal Service provides 
proposed MCS language in Attachment A of its Notice.

III. Commission Action

    The Commission establishes Docket No. R2014-1 to consider all 
matters related to the Notice. 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 November 25, 2013.
    The Commission appoints Sean C. Duffy to represent the interests of 
the general public in this proceeding.

IV. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket No. R2014-1 to consider 
matters raised by the Postal Service's November 5, 2013 Notice.
    2. Interested persons may submit comments on the planned price 
category implementation. Comments are due no later than November 25, 
2013.
    3. Pursuant to 39 U.S.C. 505, Sean C. Duffy is appointed to serve 
as an officer of the Commission (Public Representative) to represent 
the interests of the general public in this proceeding.
    4. The Secretary shall arrange for publication of this notice in 
the Federal Register.

    By the Commission.
Ruth Ann Abrams,
Acting Secretary.
[FR Doc. 2013-27282 Filed 11-14-13; 8:45 am]
BILLING CODE 7710-FW-P