[Federal Register Volume 78, Number 228 (Tuesday, November 26, 2013)]
[Notices]
[Pages 70600-70601]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-28259]
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POSTAL REGULATORY COMMISSION
[Docket No. R2014-3; Order No. 1882]
International Mail Contract
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
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SUMMARY: The Commission is noticing a recent Postal Service filing
concerning a bilateral rate and service agreement with Canada Post
Corporation. This notice informs the public of the filing, invites
public comment, and takes other administrative steps.
DATES: Comments are due: December 2, 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. The Postal Service's Filings
III. Commission Action
IV. Ordering Paragraphs
I. Introduction
Background. On November 15, 2013, the Postal Service filed notice,
pursuant to 39 CFR 3010.40 et seq., announcing that it has entered into
a bilateral agreement (Agreement) with Canada Post Corporation (Canada
Post), along with a Type 2 rate adjustment.\1\ It asks that the
Commission include the Agreement within the Inbound Market-Dominant
Multi-Service Agreements with Foreign Postal Operators I (MC2010-35)
product on grounds of functional equivalence.
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\1\ Notice of United States Postal Service of Type 2 Rate
Adjustment, and Notice of Filing Functionally Equivalent Agreement,
November 15, 2013 (collectively, Notice).
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II. The Postal Service's Filings
Compliance with filing requirements. In addition to the Notice, the
Postal Service filed an application for non-public treatment of
materials filed under seal (Attachment 1); a redacted copy of the
Canada Post Agreement (Attachment 2), filed separately; \2\ and a
redacted Excel file with supporting financial documentation. Notice at
2. The Postal Service also filed unredacted copies of the Agreement and
the supporting financial documentation under seal. Id. On November 18,
2013, the Postal Service filed with the Commission the non-public
version of the relevant portion of the bilateral agreement and
financial workpapers.\3\
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\2\ The Postal Service initially filed Notice of United States
Postal Service of Filing Attachment 2 to Notice of Type 2 Rate
Adjustment, and Notice of Filing Functionally Equivalent Agreement,
November 15, 2013. It later filed United States Postal Service
Notice of Filing of Replacement Attachment 2 to Notice of Filing
Type 2 Rate Adjustment--Errata, November 18, 2013 (Attachment 2).
For purposes of Commission review, the most recent filing of
Attachment 2, submitted November 18, 2013, will be used in its
review.
\3\ See Notice of the United States Postal Service of Non-Public
Filing of Agreement and Financial Workpapers, November 18, 2013. The
Postal Service contemporaneously filed a motion for late acceptance.
See Motion for Late Acceptance of Non-Public Filing of Agreement and
Financial Workpapers, November 18, 2013. This motion is granted.
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The Agreement is the successor agreement to one previously found to
be functionally equivalent to the Inbound Market-Dominant Multi-Service
Agreements with Foreign Postal Operators I (MC2010-35).\4\ Notice at 1.
The Postal Service identifies Canada Post, the postal operator for
Canada, and the Postal Service as the parties to the Agreement. Id. at
3.
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\4\ See Docket No. R2012-5, Order No. 1078, Order Concerning
Rate Adjustment for Bilateral Agreement with Canada Post Negotiated
Service Agreement, December 27, 2011. See also Docket No. R2012-5,
Order 1611, Order Concerning Amendment to Bilateral Agreement with
Canada Post Negotiated Service Agreement, January 7, 2013.
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The Postal Service states that the Agreement includes negotiated
pricing and settlement for various inbound letter-post products,
including International Business Reply Service (IBRS), registered mail,
and small packets with delivery confirmation. Id. It asserts that the
Agreement will not only improve financial performance over default
Universal Postal Union (UPU) rates, but will also continue to improve
operational performance. Id. at 3-4. The Postal Service indicates that,
with the inclusion of IBRS, Canada Post customers sending items to
recipients in the United States will enable those recipients to return
the items prepaid. Id. at 4.
The Postal Service identifies January 1, 2014 as the intended
effective date; states that its Notice provides the requisite advance
notice; identifies a Postal Service official as a contact person;
provides financial data and information in the redacted workpapers;
describes expected operational improvements; and addresses why the
Agreement will not result in unreasonable harm to the marketplace.
[[Page 70601]]
Id. at 2-6. The intended expiration date is December 31, 2015, unless
terminated sooner with at least 90 days' written notice by either
party. Attachment 2 at 7-8.
Data collection and performance reporting proposals. The Postal
Service proposes that no special data collection plan be created for
the Agreement because it intends to report information on the Agreement
through the Annual Compliance Report. Id. at 7. With respect to
performance measurement, the Postal Service asks that it be excepted
from separate reporting under 39 CFR 3055.3(a)(3) based on Order No.
966.\5\ Notice at 7.
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\5\ In Order No. 996, the Commission granted the Postal
Service's request for a standing exemption to performance reporting
requirements for all contracts that fall within the parameters of
the Inbound Market Dominant Multi-Service Agreements with Foreign
Postal Operations 1 product. See Docket No. R2012-2, Order No. 996,
Order Concerning an Additional Inbound Market Dominant Multi-Service
Agreement with Foreign Postal Operators 1 Negotiated Service
Agreement, November 23, 2011, at 7.
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Statutory criteria. The Postal Service states that under 39 U.S.C.
3622(c)(10), the criteria for Commission review are whether the
Agreement (1) Improves the Postal Service's net financial position or
enhances performance of operational functions; (2) will not cause
unreasonable harm to the marketplace; and (3) will be available on
public and reasonable terms to similarly situated mailers. Id. It
states that it addresses the first two criteria in its Notice and views
the third criterion as inapplicable, given Canada Post's status as the
designated operator for Letter Post originating in Canada. Id.
Functional equivalence. The Postal Service notes that in Order No.
1864, the Commission requested that it put forth a proposal for
identification of the appropriate baseline for comparison of agreements
for functional equivalency purposes.\6\ Notice at 8. The Postal Service
states that the Agreement is the substantive equivalent to the
predecessor agreement with Canada Post, which was included within
Inbound Market Dominant Multi-Service Agreement with Foreign Postal
Operators 1 product grouping. Id. It also states that the terms of the
Agreement fit within the proposed Mail Classification Schedule (MCS)
language for Inbound Market-Dominant Multi-Service Agreements with
Foreign Postal Operators 1 and will conform to a common description.
Id. at 8-9. The Postal Service asserts that in comparison with its
predecessor, cost characteristics and the financial models used to
project costs and revenues are the same as the predecessor agreement.
Id. at 9. It states that while minor differences exist, they mostly
reflect a reorganization of terms, but make no actual changes to the
terms. Id. The Postal Service states that none of these differences
detracts from the conclusion that the Agreement is functionally
equivalent to its predecessor agreement. Id.
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\6\ Docket No. R2013-9, Order No. 1864, Order Approving an
Additional Inbound Market Dominant Multi-Service Agreement with
Foreign Postal Operators 1 Negotiated Service Agreement (with Korea
Post), October 30, 2013. In response, the Postal Service filed a
motion for partial reconsideration. See Docket No. R2013-9, Motion
of Partial Reconsideration of Order No. 1864, November 6, 2013.
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III. Commission Action
The Commission, in conformance with rule 3010.44, establishes
Docket No. R2014-3 to consider matters raised by the Notice. The
Commission invites interested persons to submit comments on whether the
Notice is consistent with the policies of 39 U.S.C. 3622 and 39 CFR
3010.40. Comments are due no later than December 2, 2013.\7\
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\7\ Due to the Notice's filing date and considering the
Agreement's effective date, the Commission finds it appropriate to
extend the comment period prescribed in 39 CFR 3010.44(a)(5) to
December 2, 2013.
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The public portions of the Postal Service's filings have been
posted on the Commission's Web site. They can be accessed at http://www.prc.gov. Information on how to obtain access to non-public material
is available at 39 CFR part 3007.
The Commission appoints Katalin K. Clendenin to serve as Public
Representative in this proceeding.
IV. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket No. R2014-3 to consider
matters raised by the Notice of United States Postal Service of Type 2
Rate Adjustment, and Notice of Filing Functionally Equivalent
Agreement, filed November 15, 2013.
2. Pursuant to 39 U.S.C. 505, Katalin K. Clendenin is appointed to
serve as an officer of the Commission (Public Representative) to
represent the interests of the general public in this proceeding.
3. Comments by interested persons are due no later than December 2,
2013.
4. The Secretary shall arrange for publication of this order in the
Federal Register.
By the Commission.
Ruth Ann Abrams,
Acting Secretary.
[FR Doc. 2013-28259 Filed 11-25-13; 8:45 am]
BILLING CODE 7710-FW-P