Proposed Rule2022-25157
Market Dominant 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
November 18, 2022
Issuing agencies
Postal Regulatory Commission
Abstract
The Commission proposes amendments to its regulations concerning rate incentives for Market Dominant products and republishes additional rules. The Commission invites public comment.
Full Text
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<title>Federal Register, Volume 87 Issue 222 (Friday, November 18, 2022)</title>
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[Federal Register Volume 87, Number 222 (Friday, November 18, 2022)]
[Proposed Rules]
[Pages 69236-69237]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-25157]
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POSTAL REGULATORY COMMISSION
39 CFR Part 3030
[Docket No. RM2020-5; Order No. 6325]
RIN 3211-AA27
Market Dominant Postal Products
AGENCY: Postal Regulatory Commission.
ACTION: Proposed rule.
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SUMMARY: The Commission proposes amendments to its regulations
concerning rate incentives for Market Dominant products and republishes
additional rules. The Commission invites public comment.
DATES: Comments are due: December 19, 2022.
ADDRESSES: Submit comments electronically via the Commission's Filing
Online system at <a href="https://www.prc.gov">https://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. Background
II. Basis for Proposed Rule Change
III. Proposed Rule
I. Background
In its general Market Dominant rate adjustment filings, the Postal
Service routinely proposes to offer rate incentives in the form of
promotions that reduce rates by providing discounts, rebates, or
credits to participating mailers of certain types of mailpieces.
Typically, such promotions are offered for several months during a
particular calendar year for certain mailpieces in the First-Class Mail
and USPS Marketing Mail classes. If the Commission approves, then the
promotion may be offered again, with or without modifications, in the
next calendar year. Each rate incentive offered by the Postal Service
is either a rate of general applicability or a rate not of general
applicability. A rate incentive of general applicability may be
eligible for inclusion in the percentage change in rates calculation
(provided that it satisfies all the applicable criteria under the
Commission rules), which will allow for the Postal Service to generate
price cap authority for the applicable class of mail. By contrast, a
rate incentive not of general applicability is ineligible for inclusion
in the percentage change in rates calculation; it may not be used to
generate price cap authority for the applicable class of mail.
The Commission previously adopted regulations concerning rate
incentives for Market Dominant products.\1\ However, in connection with
an appeal, the Commission stated that it would reconsider Order No.
5510 and that it ``does not intend to enforce Order No. 5510 during the
reconsideration period.'' \2\ Having reconsidered, the Commission
proposes modifying certain of those rules as well as republishing and
enforcing certain other of those rules.
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\1\ Docket No. RM2020-5, Order Adopting Final Rules Regarding
Rate Incentives for Market Dominant Products, May 15, 2022 (Order
No. 5510).
\2\ Docket No. RM2020-5, Notice of Intent to Reconsider, August
26, 2020, at 2 (Order No. 5655); see U.S. Postal Serv. v. Postal
Reg. Comm'n, Joint Motion for Voluntary Dismissal and Vacatur, No.
20-1208 (D.C. Cir. Sept. 11, 2020).
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II. Basis for Proposed Rule Change
The Commission proposes to clarify its rules by making one revision
and by beginning to enforce two revisions that it made in Order No.
5510. First, the Commission proposes to amend Sec. 3030.101(j) to
clarify that to qualify as a rate of general applicability, a rate
incentive cannot be based on historical mail volumes or prior
participation in a rate incentive or promotion. Second, the Commission
proposes to begin enforcing the changes that it made to Sec.
3030.128(f)(2) in Order No. 5510 (including the additional criterion
that a rate incentive must be made available to all mailers equally on
the same terms and conditions to be eligible for inclusion in the
percentage change in rates calculation). Third, the Commission proposes
to begin enforcing the changes that it made to Sec. 3030.123(j),
including additional requirements intended to ensure that the Postal
Service provides sufficient information at the outset of a Market
Dominant rate adjustment proceeding.
The proposed revision of the definition of ``rate of general
applicability'' in Sec. 3030.101(j) is designed to clarify what rate
incentives may qualify for inclusion in the percentage change in rates
calculation as rates of general applicability. Under the Commission's
existing rules ``[a] rate is not a rate of general applicability if
eligibility for the rate is dependent on factors other than the
characteristics of the mail to which the rate applies[.]'' 39 CFR
3030.101(j). A characteristic of the mail is a feature of the mail
sent, not of the mailer sending the mail. Thus, the proposed rule adds
an additional sentence to clarify that a rate incentive is not a rate
of general applicability if eligibility for the rate is dependent in
whole or in part on the volume of mail sent by a mailer in a past year
or years or on the participation by a mailer in a rate incentive or
promotion in a past year or years. Revising the Commission's definition
of ``rate of general applicability'' will provide other benefits. These
other benefits include promoting fairness, avoiding unharmonious
situations in the application of the Commission's rules, limiting
situations in which the Postal Service could obtain undue rate
authority, and maintaining streamlined calculations.
The Commission also proposes republishing and beginning to enforce
the requirement of Sec. 3030.128(f)(2)(iv) that rate incentives
included in the percentage change in rates calculation
[[Page 69237]]
be ``available to all mailers equally on the same terms and
conditions.'' Enforcing this provision will enhance fairness. The
Postal Service has the pricing flexibility generally to set individual
Market Dominant rate cells as it chooses, subject to the class-level
application of the price cap. When a rate incentive is not made
available to all mailers equally on the same terms and conditions, the
discounts received by eligible mailers could be offset in part by
higher rates paid by non-eligible mailers. This situation could lead to
the non-eligible mailers effectively paying higher rates as a result of
the rate incentive without having an opportunity to receive its
benefits. Enforcing the requirement of Sec. 3030.128(f)(2)(iv) that
rate incentives included in the percentage change in rates calculation
be ``available to all mailers equally on the same terms and
conditions'' will prevent such situations from arising.
To clarify the specific information necessary to determine whether
rate incentives should be included in the percentage change in rates
calculation, the Commission proposes republishing and beginning to
enforce the requirements for the contents of the Postal Service's
notice of rate adjustment related to Market Dominant rate incentives.
These more detailed initial filing requirements will require the Postal
Service to provide sufficient information at the outset of a Market
Dominant rate adjustment proceeding to ensure that any rate incentive
included in a percentage change in rates calculation meets the criteria
of Sec. 3030.128(f)(2).
III. Proposed Rule
Proposed Sec. 3030.101(j). Proposed Sec. 3030.101(j) is revised
to state clearly that the definition of ``rate of general
applicability'' within the context of a Market Dominant rate adjustment
proceeding does not include a rate incentive that is dependent on the
volume of mail sent by a mailer in a past year or years or the
participation by a mailer in a rate incentive or promotion in a past
year or years.
Current Sec. 3030.123(j). Current Sec. 3030.123(j) is republished
to identify clearly what information the Postal Service must file to
support its claim that a rate incentive meets the necessary criteria to
be included in a percentage change in rates calculation. Current Sec.
3030.123(j) will be enforced in its entirety.
Current Sec. 3030.128(f)(2)(iv). Current Sec. 3010.128(f)(2)(iv)
is republished to include a criterion for a Market Dominant rate
incentive to be included in a percentage change in rates calculation
that the incentive be available to all mailers equally on the same
terms and conditions. Current Sec. 3010.128(f)(2)(iv) will be enforced
in its entirety.
List of Subjects in 39 CFR Part 3030
Administrative practice and procedure, Postal Service.
For the reasons stated in the preamble, the Commission proposes to
amend chapter III of title 39 of the Code of the Federal Regulations as
follows:
PART 3030--REGULATION OF RATES FOR MARKET DOMINANT PRODUCTS
0
1. The authority citation for part 3030 continues to read as follows:
Authority: 39 U.S.C. 503; 3622.
0
2. Amend Sec. 3030.101 by revising paragraph (j) to read as follows:
Sec. 3030.101 Definitions.
* * * * *
(j) Rate of general applicability means a rate applicable to all
mail meeting standards established by the Mail Classification Schedule,
the Domestic Mail Manual, and the International Mail Manual. A rate is
not a rate of general applicability if eligibility for the rate is
dependent on factors other than the characteristics of the mail to
which the rate applies. A rate incentive is not a rate of general
applicability if eligibility for the rate is wholly or partially
dependent on the volume of mail sent by a mailer in a past year or
years or on the participation by a mailer in a rate incentive or
promotion in a past year or years. A rate is not a rate of general
applicability if it benefits a single mailer. A rate that is only
available upon the written agreement of both the Postal Service and a
mailer, a group of mailers, or a foreign postal operator is not a rate
of general applicability.
* * * * *
0
3. Republish Sec. 3030.123 paragraph (j) to read as follows:
Sec. 3030.123 Supporting technical documentation.
* * * * *
(j) Whenever the Postal Service includes a rate incentive with its
planned rate adjustment, it must include with its filing:
(1) Whether the rate incentive is being treated under Sec.
3030.128(f)(2) or under Sec. 3030.128(f)(1) and (g);
(2) If the Postal Service seeks to include the rate incentive in
the calculation of the percentage change in rates under Sec.
3030.128(f)(2), whether the rate incentive is available to all mailers
equally on the same terms and conditions; and
(3) If the Postal Service seeks to include the rate incentive in
the calculation of the percentage change in rates under Sec.
3030.128(f)(2), sufficient information to demonstrate that the rate
incentive is a rate of general applicability, which at a minimum
includes: The terms and conditions of the rate incentive; the factors
that determine eligibility for the rate incentive; a statement that
affirms that the rate incentive will not benefit a single mailer; and a
statement that affirms that the rate incentive is not only available
upon the written agreement of both the Postal Service and a mailer, or
group of mailers, or a foreign postal operator.
* * * * *
0
4. Republish Sec. 3030.128 paragraph (f)(2) to read as follows:
Sec. 3030.128 Calculation of percentage change in rates.
* * * * *
(f) * * *
(2) A rate incentive may be included in a percentage change in
rates calculation if it meets the following criteria:
(i) The rate incentive is in the form of a discount or can be
easily translated into a discount;
(ii) Sufficient billing determinants are available for the rate
incentive to be included in the percentage change in rate calculation
for the class, which may be adjusted based on known mail
characteristics or historical volume data (as opposed to forecasts of
mailer behavior);
(iii) The rate incentive is a rate of general applicability; and
(iv) The rate incentive is made available to all mailers equally on
the same terms and conditions.
By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2022-25157 Filed 11-17-22; 8:45 am]
BILLING CODE 7710-FW-P
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</html>Indexed from Federal Register on November 18, 2022.
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