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Notice2023-24010

Market Test of Experimental Product

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Published
October 31, 2023

Issuing agencies

Postal Regulatory Commission

Abstract

The Commission is recognizing a recently filed Postal Service request to extend the duration of USPS Connect Local Mail market test. This notice informs the public of the filing, invites public comment, and takes other administrative steps.

Full Text

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<title>Federal Register, Volume 88 Issue 209 (Tuesday, October 31, 2023)</title>
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[Federal Register Volume 88, Number 209 (Tuesday, October 31, 2023)]
[Notices]
[Pages 74542-74543]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-24010]


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POSTAL REGULATORY COMMISSION

[Docket No. MT2022-1; Order No. 6758]


Market Test of Experimental Product

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is recognizing a recently filed Postal Service 
request to extend the duration of USPS Connect Local Mail market test. 
This notice informs the public of the filing, invites public comment, 
and takes other administrative steps.

DATES: Comments are due: November 16, 2023.

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. Introduction
II. Background
III. Notice of Filing
IV. Ordering Paragraphs

I. Introduction

    On January 4, 2022, the Commission authorized the Postal Service to 
proceed with a 2-year market test of an experimental product called 
USPS Connect Local Mail.\1\ The market test began on January 9, 2022 
and is scheduled to expire on January 8, 2024 unless extended or 
canceled. Order No. 6080 at 20. USPS Connect Local Mail offers an 
alternative to long-distance end-to-end mailing that business mailers 
may use to send documents locally with regular frequency. Id. at 2. 
USPS Connect Local Mail provides same-day or next-day delivery, 6 days 
per week, with customers receiving same-day or next-day delivery based 
on when they enter their mail. Id. On October 24, 2023, the Postal 
Service filed a request pursuant to 39 U.S.C. 3641 and 39 CFR 3045.11 
to extend the duration of the USPS Connect Local Mail market test until 
January 9, 2025, an additional 12 months.\2\
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    \1\ Order Authorizing Market Test of Experimental Product--USPS 
Connect Local Mail, January 4, 2022 (Order No. 6080).
    \2\ United States Postal Service Request for Extension of Market 
Test, October 24, 2023, at 1 (Request).
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II. Background

    Before filing the Request, the Postal Service filed two requests to 
convert USPS Connect Local Mail to a permanent offering that were both 
dismissed without prejudice. On October 11, 2022, the Postal Service 
filed its initial request, which the Commission considered in Docket 
No. MC2023-12.\3\ The Commission dismissed the Initial Request without 
prejudice because it did not ``contain the information required by law 
and necessary for the Commission to determine the appropriateness of 
converting USPS Connect Local Mail to a permanent product offering. . . 
.'' \4\ It provided the Postal Service the opportunity to refile a 
compliant request, which the Postal Service submitted on November 9, 
2022.\5\ After reviewing the record and considering comments received, 
the Commission dismissed the Revised Request without prejudice because 
the Postal Service did not adequately address significant issues 
regarding potential unfair competition under 39 U.S.C. 404a.\6\ In 
Order No. 6423, the Commission stated that it expects a future request 
to convert USPS Connect Local Mail to a permanent product offering to 
address four topics regarding sufficient data, financial stability, 
pricing, and impact of new sorting and delivery centers on customer 
demand. Order No. 6423 at 12-15.
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    \3\ Docket No. MC2023-12, United States Postal Service Request 
to Convert USPS Connect Local Mail to a Permanent Offering, October 
11, 2022 (Initial Request).
    \4\ Docket No. MC2023-12, Order Dismissing Without Prejudice 
Postal Service's Request to Convert USPS Connect Local Mail Market 
Test to a Permanent Offering, October 17, 2022, at 5-6 (Order No. 
6301).
    \5\ Docket No. MC2023-12, United States Postal Service Revised 
Request to Convert USPS Connect Local Mail to a Permanent Offering, 
November 9, 2022 (Revised Request).
    \6\ Docket No. MC2023-12, Order Dismissing Without Prejudice the 
Postal Service's Revised Request to Convert USPS Connect Local Mail 
Market Test to a Permanent Offering, January 20, 2023, at 3 (Order 
No. 6423).
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    In its Request for extension, the Postal Service explains that 
extending the market test for another year would allow it to address 
the topics identified in Order No. 6423. Request at 3. It seeks a 12-
month extension of the USPS Connect Local Mail market test, which if 
approved would set a new expiration date of January 9, 2025. Id. at 1. 
It asserts that the Request meets the criteria for granting an 
extension under 39 U.S.C. 3641(d)(2) and 39 CFR 3045.11. Id. at 3.
    39 U.S.C. 3641(d)(2) allows a market test to be extended ``[i]f 
necessary in order to determine the feasibility or desirability of a 
product being tested'' in a market test. 39 U.S.C. 3641(d)(2). The 
Commission's rules require the Postal Service to provide certain 
information in a request for extension. First, it must ``[e]xplain why 
an extension is necessary to determine the feasibility or desirability 
of the experimental product'' USPS Connect Local Mail. 39 CFR 
3045.11(b)(1). The Postal Service asserts that it ``needs additional 
time to determine the viability of USPS Connect Local Mail as a 
standalone offering and develop further strategies to ensure its 
success.'' Request at 3. Specifically, it states that an extension 
would allow it to better understand customer usage and any related 
obstacles. Id. at 4. It observes that an extension would provide a 
meaningful opportunity to evaluate USPS Connect Local Mail's viability 
in the context of the redesigned network, which was a concern raised in 
Order No. 6423.\7\
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    \7\ Id. at 5; see Order No. 6423 at 14.
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    Second, a request for extension must list the new end date of the 
market test. 39 CFR 3045.11(b)(2). In the Request, the Postal Service 
identifies a new market test termination date of January 9, 2025. 
Request at 5. Third, a request for extension must ``[c]alculate the 
total revenue received by the Postal Service from the market test for 
each fiscal year the market test has been in operation and provide 
supporting documentation for the calculations[.]'' 39 CFR 
3045.11(b)(3). The Postal Service provides revenue and volume of 
mailpieces for each fiscal quarter the market test has been operating 
and attaches quarterly reports supporting these calculations. Request 
at 6.
    Fourth, the request for extension must ``[e]stimate the additional 
revenue that is anticipated by the Postal Service for each fiscal year 
remaining on the market test, including the requested extension period, 
and provide available supporting documentation[.]'' 39 CFR 
3045.11(b)(4). The Postal Service asserts that based on the quarterly 
reports, it reasonably anticipates continued volume of approximately 
100 pieces per month, which would amount to estimated additional 
revenue of approximately $4,000 through December 2024 assuming that 
volume

[[Page 74543]]

remains steady during the extension. Request at 6-7.
    Fifth, the request for extension must include ``any additional 
information necessary for the Commission to evaluate the continued 
consistency with the requirements of 39 U.S.C. 3641.'' 39 CFR 
3045.11(b)(5). The Postal Service explains that it has considered some 
of the Commission's concerns in Order No. 6423 and ``is currently 
exploring additional options beyond Click-N-Ship and the Postal Service 
API that would enable third-party payment providers to sell USPS 
Connect Local Mail through their existing evidencing systems while 
still maintaining the desired end-user experience.'' Request at 7-8. It 
also explains that after considering price alternatives, the current 
price for USPS Connect Local Mail is appropriate. Id. at 8.

III. Notice of Filing

    The Commission will continue to consider matters raised by the 
Postal Service's Request in Docket No. MT2022-1. The Commission invites 
comments on whether the Request complies with applicable statutory and 
regulatory requirements, including 39 U.S.C. 3641, 39 CFR part 3045, 
and Order No. 6080. Comments are due by November 16, 2023. The public 
portions of filings in this docket can be accessed via the Commission's 
website (<a href="http://www.prc.gov">http://www.prc.gov</a>).
    39 U.S.C. 505 requires the Commission to designate an officer of 
the Commission to represent the interests of the general public in all 
public proceedings (Public Representative). The Commission previously 
appointed Mallory L. Smith to serve as the Public Representative in 
this proceeding. She remains appointed to serve as the Public 
Representative.

VI. Ordering Paragraphs

    It is ordered:
    1. The Commission invites comments on the United States Postal 
Service Request for Extension of Market Test, filed on October 24, 
2023.
    2. Pursuant to 39 U.S.C. 505, Mallory L. Smith remains appointed to 
serve as the Public Representative in this proceeding.
    3. Comments are due by November 16, 2023.
    4. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2023-24010 Filed 10-30-23; 8:45 am]
BILLING CODE 7710-FW-P


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