Notice2022-19707
Competitive Postal Products
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 13, 2022
Issuing agencies
Postal Regulatory Commission
Abstract
The Commission is invites comments in this proceeding related to its analysis of subsequent events that impact the findings of a Federal Trade Commission Report. This document informs the public of this proceeding, invites public comment, and takes other administrative steps.
Full Text
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<title>Federal Register, Volume 87 Issue 176 (Tuesday, September 13, 2022)</title>
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[Federal Register Volume 87, Number 176 (Tuesday, September 13, 2022)]
[Notices]
[Pages 56094-56096]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-19707]
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POSTAL REGULATORY COMMISSION
[Docket No. RM2017-1/RM2022-2; Order No. 6269]
Competitive Postal Products
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
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SUMMARY: The Commission is invites comments in this proceeding related
to its analysis of subsequent events that impact the findings of a
Federal Trade Commission Report. This document informs the public of
this proceeding, invites public comment, and takes other administrative
steps.
DATES: Comments are due: September 21, 2022.
ADDRESSES: For additional information, Order No. 6269 can be accessed
electronically through the Commission's website at <a href="https://www.prc.gov">https://www.prc.gov</a>.
Submit comments electronically via the Commission's Filing Online
system at <a href="http://www.prc.gov">http://www.prc.gov</a>. 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:
Table of Contents
I. Introduction
II. Background
[[Page 56095]]
III. Events Subsequent Events to the FTC Report
IV. Invitation for Comments
V. Ordering Paragraphs
I. Introduction
As part of its enactment of the Postal Accountability and
Enhancement Act (PAEA), Congress sought to determine whether the Postal
Service's competitive products enjoyed any legal advantages over
private companies providing similar products.\1\ Uncodified section 703
of the PAEA directed the Federal Trade Commission (FTC) to prepare a
report identifying federal and state laws that apply differently to the
Postal Service's competitive products than to similar products offered
by private competitors.\2\ The FTC was required to include any
recommendations concerning how to end any such legal differences that
it deemed appropriate and, in the interim, to account for the net
economic effect resulting from such differences. PAEA section 703(b).
Additionally, section 703 directed the Commission, when revising
regulations under 39 U.S.C. 3633, to consider the FTC's recommendations
as well as subsequent events that affect the continuing validity of the
FTC's net economic effect finding. Id. section 703(d).
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\1\ See Postal Accountability and Enhancement Act (PAEA), Public
Law 109-435, title VII, section 703, 120 Stat. 3198, 3244 (2006);
see also S. Rep. No. 108-318 at 29 (2004).
\2\ PAEA section 703(a). Section 703 was not codified and is
reproduced in the notes of 39 U.S.C.A. 3633. See also Federal Trade
Commission, Accounting for Laws that Apply Differently to the United
States Postal Service and its Private Competitors, December 2007
(FTC Report), available at <a href="https://www.ftc.gov/sites/default/files/documents/reports/accounting-laws-apply-differently-united-statespostal-service-and-its-private-competitors-report/080116postal">https://www.ftc.gov/sites/default/files/documents/reports/accounting-laws-apply-differently-united-statespostal-service-and-its-private-competitors-report/080116postal</a>.
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II. Background
The FTC issued its report in December 2007, which considered both
the implicit subsidies enjoyed by, and legal constraints imposed on,
the Postal Service's Competitive products due to the Postal Service's
unique legal status.\3\ In Chapter IV of its report, the FTC completed
its net economic effect analysis by specifically identifying those
implicit subsides and legal constraints that could be quantified in
order to calculate any impact on the Postal Service.\4\ The FTC
calculated the cost of the quantifiable legal constraints and the value
of the implicit subsidies and concluded that the Postal Service's
unique legal status placed it at a net competitive disadvantage in
offering Competitive products relative to private competitors. Id. at
64.
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\3\ FTC Report at 55-77. In its review of the Postal Service's
unique legal status, the FTC analyzed laws applicable to the Postal
Service due to its status as a governmental entity as well as those
disadvantages imposed on and advantages allowed by the PAEA. Id.
\4\ Id. at 64 n.287. The FTC Report discussed additional
implicit subsidies and legal constraints beyond those listed in its
net economic effect analysis, but because the additional subsidies
and constraints could either not be quantified or the effect on the
Postal Service was unclear, the FTC did not include them as part of
its final analysis. See id. at 1, 50, 54, 56, 64, 89.
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On February 8, 2018, as part of the Commission's second 5-year
review of the institutional cost contribution requirement for
Competitive products, the Commission issued a Notice of Proposed
Rulemaking, proposing revisions to its regulations pursuant to 39
U.S.C. 3633(a)(3) and (b) and completed an analysis pursuant to section
703(d) of the PAEA.\5\
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\5\ See Order No. 4402 at 54-68; see also Docket No. RM2017-1,
Revised Notice of Proposed Rulemaking, August 7, 2018, at 57-58
(Order No. 4742); Docket No. RM2017-1, Order Adopting Final Rules
Relating to the Institutional Cost Contribution Requirement for
Competitive Products, January 3, 2019, at 170-187 (Order No. 4963).
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The Commission found that there was only ``one law linked to a
separately delineated element within the FTC's calculation that has
been amended, thereby constituting an event subsequent to the FTC
Report's issuance that affects the validity of the estimate of the net
economic effect.'' Id. at 63. The identified law was associated with
international air transportation rate regulation and had been amended
after the original FTC Report's issuance.\6\ The Commission removed the
cost of the international air transportation rate regulation constraint
from the total cost of the legal constraints and updated the FTC's
calculation. See Order No. 4402 at 64. The Commission found that
although the removal of the international air transportation rate
regulation constraint altered the overall estimate of the net economic
effect, that subsequent event did not undermine the FTC's overall
finding of a net economic disadvantage and that the FTC's finding
remained valid. Id. Additionally, the Commission performed a
supplemental analysis by updating the high-end costs associated with
both the implicit subsidies and legal constraints based on current
competitive product revenue at the time Order No. 4402 was issued.
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\6\ Id. at 63-64. In the FTC Report, the FTC explained that the
Department of Transportation's regulation of international mail air
transport rates increased Postal Service costs because it was not
permitted to independently negotiate the rates on the free market as
private companies were. FTC Report at 44, 56. In 2008, Congress
eliminated the Department of Transportation's authority to regulate
the prices paid by the Postal Service for air transport of
international mail. See Public Law 110-405, 122 Stat. 4287 (2008);
see also FTC Report at 44-45.
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Subsequently, the United States Court of Appeals for the District
of Columbia Circuit remanded Order No. 4963 to the Commission for
further consideration of particular issues identified by the court
consistent with the opinion issued in United Parcel Serv., Inc. v.
Postal Reg. Comm'n, 955 F.3d 1038 (D.C. Cir. 2020). On November 18,
2021, the Commission issued Order No. 6043, which not only addressed
the issues identified by the court, but also initiated the Commission's
third 5-year review of the institutional cost contribution requirement
for Competitive products.\7\ Docket Nos. RM2017-1 and RM2022-2 remain
pending before the Commission.
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\7\ Supplemental Notice of Proposed Rulemaking and Order
Initiating the Third Review of the Institutional Cost Contribution
Requirement for Competitive Products, November 18, 2021, at 130
(Order No. 6043).
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III. Events Subsequent to the FTC Report
After the issuance of Order No. 6043 and the expiration of the
comment period established therein, the Postal Service Reform Act of
2022 (PSRA) was enacted on April 6, 2022.\8\ Among other things, the
PSRA requires Postal Service Health Benefits plans to participate in
Medicare Part D, which would allow those plans to receive subsidies
related to prescription drugs. See 5 U.S.C. 8903c(h). This new
requirement is significant because, in its report, the FTC specifically
identified and included the Postal Service's inability to access
subsidies offered to private employers under the Medicare Part D
program in its calculation of the total legal constraints. See FTC
Report at 38-39, 56. As a result, the Commission finds that there has
been one law linked to a separately delineated element within the FTC's
calculation that has been amended, thereby constituting an event
subsequent to the FTC Report's issuance that affects the validity of
the estimate of the net economic effect.\9\ The Commission removes the
cost of the Medicare Part D constraint from the total cost of the legal
constraints and updates the FTC's calculation. Additionally, the
Commission performed a supplemental analysis by updating the low-end
and high-end costs associated with both the implicit subsidies and
legal constraints based on the current appropriates share and
competitive product revenue.
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\8\ See Postal Service Reform Act of 2022 (PSRA), Public Law
117-108, 136 Stat. 1127 (2022).
\9\ The Commission finds no other changes to federal or state
law affect the legal constraints estimate.
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IV. Invitation for Comments
The Commission invites comment regarding its analysis of the
``subsequent event'' identified and discussed above. The Commission
also invites comments on any other changes in law behind the implicit
subsidies and legal constraints quantified by the FTC that have changed
since March 25, 2022, which was the last opportunity to provide comment
in Docket Nos. RM2017-1 and RM2022-2, and whether any of the identified
changes affect the continuing validity of the FTC's estimate of the net
economic effect of those laws. Comments related to the reconsideration
of the FTC's original conclusions as to what implicit subsides and
legal constraints should be included in or excluded from the estimate
of net economic effect, whether those subsidies or constraints were
quantifiable, or whether alternative estimates of the quantified
implicit subsides and legal constraints are possible are all beyond the
scope of this review.\10\
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\10\ See Order No. 4402 at 62-63; Order No. 4963 at 173-87.
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Comments are due September 21, 2022. Additional information
concerning this filing may be accessed via the Commission's website at
<a href="http://www.prc.gov">http://www.prc.gov</a>.
Pursuant to 39 U.S.C. 505, Kenneth R. Moeller continues to be
designated as an officer of the Commission (Public Representative) to
represent the interests of the general public in this proceeding.
V. Ordering Paragraphs
It is ordered:
1. The Commission seeks comment on the matters raised by this
Notice.
2. Comments are due no later than September 21, 2022.
3. Pursuant to 39 U.S.C. 505, Kenneth R. Moeller continues to be
designated as an officer of the Commission (Public Representative) to
represent the interests of the general public in this proceeding.
4. The Commission directs the Secretary of the Commission to
arrange for prompt publication of this Notice in the Federal Register.
By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2022-19707 Filed 9-12-22; 8:45 am]
BILLING CODE 7710-FW-P
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</html>Indexed from Federal Register on September 13, 2022.
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