[Federal Register Volume 80, Number 139 (Tuesday, July 21, 2015)]
[Notices]
[Pages 43134-43135]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-17782]
=======================================================================
-----------------------------------------------------------------------
POSTAL REGULATORY COMMISSION
[Docket No. R2013-10R; Order No. 2586]
Rate Adjustment Product
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Commission is noticing a recent court of appeals remand of
its decision concerning implementation of the Full Service IMb
requirements. This notice informs the public of the filing, invites
public comment, and takes other administrative steps.
DATES: Comments are due: August 3, 2015. Reply comments are due: August
14, 2015.
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: David A. Trissell, General Counsel, at
202-789-6820.
SUPPLEMENTARY INFORMATION: On May 12, 2015, the United States Court of
Appeals for the District of Columbia Circuit issued its opinion in
United States Postal Service v. Postal Regulatory Commission, 785 F.3d
740 (D.C. Cir. 2015). The court denied in part and granted in part a
Postal Service petition for review of the Commission's November 21,
2013 order denying implementation of the Full Service IMb requirements
for failure to comply with 39 U.S.C. 3622(d).\1\ 785 F.3d at 744.
---------------------------------------------------------------------------
\1\ Order on Price Adjustments for Market Dominant Products and
Related Mail Classification Changes, November 21, 2013 (Order No.
1890).
---------------------------------------------------------------------------
On July 8, 2015, the court issued its mandate remanding the case to
the Commission. This order establishes procedures on remand and
solicits comments on the standard to be applied when considering
whether mail preparation changes are changes in rates with respect to
39 U.S.C. 3622(d).
Background. On September 26, 2013, the Postal Service filed notice
of its planned priced adjustment for market dominant products.\2\ The
Postal Service's Notice and proposed rate increases failed to account
for the planned implementation of the Full Service IMb requirements.
Previously, on April 18, 2013, the Postal Service revised its Domestic
Mail Manual to modify the eligibility requirements for mailers to
qualify for automation First-Class, Standard, Periodicals, and Package
Services rates. 78 FR 23137 (April 18, 2013). Full Service IMb was now
required to qualify for automation rates, where previously mailers
could qualify for automation rates by using either Full Service IMb or
Basic IMb. This change in the mail preparation requirement for
automation rates was scheduled to take place on January 26, 2014. Id.
However, in its Notice, the Postal Service failed to adjust its billing
determinants to account for the effects on the price cap calculation of
the Full Service IMb requirements.
---------------------------------------------------------------------------
\2\ United States Postal Service Notice of Market-Dominant Price
Adjustment, September 26, 2013 (Notice).
---------------------------------------------------------------------------
After considering the Postal Service's responses to information
requests and comments from interested parties, the Commission issued
Order No. 1890, finding that the Full Service IMb requirements
``constitute a classification change with rate implications pursuant to
39 U.S.C. 3622(d)(1)(A) and 39 CFR 3010.23(d).'' Order No. 1890 at 2.
Accordingly, as the Postal Service failed to account for the deletion
and redefinition of rate cells as a result of the Full Service IMb
requirement when adjusting its billing determinants for First-Class,
Standard, and Periodicals, the Commission found that the proposed rate
adjustments exceeded the price cap.\3\ As a result, the Commission gave
the Postal Service the option either to defer implementation of the
Full Service IMb requirements or to submit an amended notice of rate
adjustment that included billing determinants adjusted to account for
the effects of the new requirements. Id. at 36. The Postal Service
chose to defer implementation of the Full Service IMb requirements and
filed an appeal with the DC Circuit Court of Appeals.\4\
---------------------------------------------------------------------------
\3\ Id. at 5. The Postal Service made adjustments to the billing
determinants to account for the effects of the Full Service IMb
requirements on the price cap calculation for Package Services.
\4\ Response of the United States Postal Service to Order No.
1890, November 29, 2013.
---------------------------------------------------------------------------
The court's opinion. On appeal the court affirmed the Commission's
authority to determine when mail preparation changes affect the
application of the price cap. Specifically, the court found that
[t]he Commission's interpretation of the statute prevents the Postal
Service from evading the price cap by shifting mailpieces to higher
rates through manipulation of its mail preparation requirements. The
Commission's interpretation is therefore consistent with the price
cap's language and purpose, and the Commission's delegated authority
to administer the cap. 785 F.3d at 751.
The court nevertheless concluded that the Commission's exercise of
its authority was arbitrary and capricious for failing to ``articulate
a comprehensible standard for the circumstances in which a change to
mail preparation requirements such as the one in this case will be
considered a `change in rates.' '' Id. at 753. In the court's view, the
Commission failed to properly explain the standard it was applying to
determine when a mail preparation change constituted a price change.
Id. at 754. Thus, it granted the Postal Service's petition in part and
remanded the case to the Commission to ``enunciate an intelligible
standard and then reconsider its decision in light of that standard.''
Id. at 756.
Request for comment. As directed by the court, the Commission will
proceed to enunciate the standard applied to determine when mail
preparation changes have rate effects with price cap implications,
based on its expertise and past decisions considering similar changes.
The Commission requests comments to afford all interested persons an
opportunity to provide input on the standard used by the Commission.
In conducting its analysis of whether a mail preparation change
constitutes a rate change, the Commission will evaluate the following
four factors: (1) Whether the change alters a basic characteristic of a
mailing, (2) the effect
[[Page 43135]]
of the change on mailers, (3) the purpose of the change, and 4) whether
the change results in a shift in volume of mail from one rate category
to another. Each of these factors is weighed individually and the
Commission intends to apply these factors to the Full Service IMb
requirements in the decision on remand.
In assessing the first factor, whether a mail preparation change
alters a basic characteristic of a mailing, the Commission considers
the following characteristics: (a) Whether the change modifies the
size, weight, or content of eligible mail, (b) whether the change
alters the presentation and/or preparation of the mailing in a
substantial way, (c) regularity of the change (periodic vs. one-time),
(d) magnitude of the change, and (e) the complexity of the change
relating to mailer behavior.
For the second factor, the Commission evaluates the following
components to determine the effect of the mail preparation requirement
on mailers: (a) Whether the change imposes fixed or variable costs, (b)
the effect on high volume and low volume mailers, (c) the number of
mailers affected, (d) the volume of mail affected, (e) the benefits to
mailers, and (f) the timeframe for mailers to comply with the change.
In considering the purpose of the change, the Commission examines
whether the change: (a) Improves the expeditious collection,
transportation, and/or delivery of the mail, (b) aligns with changes in
the Postal Service's network and/or equipment, and (c) is intended to
increase a price.
For the final factor, the Commission takes into account whether the
change in mail preparation requirements causes a shift in volume of
mail from one rate category to another. This factor considers whether
the changes result in the de facto elimination of a rate category or
the deletion of a rate cell.
These factors are intended to serve as a guide for a case-by-case
analysis to determine whether a mail preparation change is a rate
change with price cap implications. In the absence of explicit
statutory definitions for determining when a mail preparation change
constitutes a rate change with respect to 39 U.S.C. 3622(d), commenters
are invited to provide any views on whether the four factors listed
above (i.e., alter a basic characteristic of a mailing, effect on
mailers, purpose of change, and shift volumes between rate cells)
adequately set forth the parameters of mail preparation requirement
changes to be examined to determine whether a change in mail
preparation requirements has rate effects with price cap implications.
Accordingly, to ensure that the Postal Service and other interested
persons have an opportunity to provide input on the standard used by
the Commission, the Commission solicits comments from interested
persons on the four factors listed above and their components. Initial
comments are due no later than August 3, 2015. Reply comments are due
no later than August 14, 2015. All comments must be filed under Docket
No. R2013-10R.
It is ordered:
1. The Commission establishes Docket No. R2013-10R to consider
issues on remand.
2. Kenneth E. Richardson will continue to serve as an officer of
the Commission (Public Representative) to represent the interests of
the general public in this proceeding.
3. Initial comments addressing the Commission's standard to
determine when mail preparation changes have rate effects with price
cap implications are due no later than August 3, 2015.
4. Reply comments addressing matters raised in initial comments are
due no later than August 14, 2015.
5. All comments and other documents related to issues on remand
must be filed under Docket No. R2013-10R.
6. The Secretary shall arrange for publication of this order in the
Federal Register.
By the Commission.
Ruth Ann Abrams,
Acting Secretary.
[FR Doc. 2015-17782 Filed 7-20-15; 8:45 am]
BILLING CODE 7710-FW-P