Proposed Rule2024-22125
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
September 30, 2024
Issuing agencies
Postal Regulatory Commission
Abstract
The Commission seeks comment on amendments to its rules concerning rate incentives for Market Dominant products. The Commission proposes to revise the criteria that a rate incentive must satisfy to be included in the percentage change in rates calculation. The Commission also proposes to revise the definition of "rate of general applicability" for Market Dominant rate adjustment proceedings. Further, the Commission proposes to modify associated filing and reporting requirements.
Full Text
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<title>Federal Register, Volume 89 Issue 189 (Monday, September 30, 2024)</title>
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[Federal Register Volume 89, Number 189 (Monday, September 30, 2024)]
[Proposed Rules]
[Pages 79489-79491]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-22125]
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POSTAL REGULATORY COMMISSION
39 CFR Part 3030
[Docket No. RM2020-5; Order No. 7559]
RIN 3211-AA27
Market Dominant Postal Products
AGENCY: Postal Regulatory Commission.
ACTION: Proposed rule.
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SUMMARY: The Commission seeks comment on amendments to its rules
concerning rate incentives for Market Dominant products. The Commission
proposes to revise the criteria that a rate incentive must satisfy to
be included in the percentage change in rates calculation. The
Commission also proposes to revise the definition of ``rate of general
applicability'' for Market Dominant rate adjustment proceedings.
Further, the Commission proposes to modify associated filing and
reporting requirements.
DATES: Comments are due: October 30, 2024. Reply comments are due:
November 14, 2024.
ADDRESSES: 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. The Rule Summary can be found on the Commission's Rule
Summary Page at <a href="https://www.prc.gov/rule-summary-page">https://www.prc.gov/rule-summary-page</a>.
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's 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 has been ineligible for inclusion in the percentage
change in rates calculation.
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\ In Order No. 6325, the Commission
proposed modifying its rules and sought comments on its proposal.\3\
Subsequently, the Commission sought supplemental comments.\4\ Having
considered the comments that it received, the Commission proposes
further changes to its rules.
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\1\ Docket No. RM2020-5, Order Adopting Final Rules Regarding
Rate Incentives for Market Dominant Products, May 15, 2020 (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 (DC Cir. Sept. 11, 2020).
\3\ Docket No. RM2020-5, Notice of Proposed Rulemaking to Amend
Rules Regarding Rate Incentives for Market Dominant Products,
November 14, 2022 (Order No. 6325).
\4\ Docket No. RM2020-5, Supplemental Notice of Proposed
Rulemaking to Amend Rules Regarding Rate Incentives for Market
Dominant Products, November 17, 2023 (Order No. 6801).
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II. Basis for Proposed Rule Change
The Commission proposes to modify its rules by revising the
criteria that a rate incentive must satisfy to be included in the
percentage change in rates calculation; revising the definition of
``rate of general applicability''; and revising filing and reporting
requirements.
First, the Commission proposes to create a mechanism allowing
certain rate incentives that are not rates of general applicability to
be included in the percentage change in rates calculation. Second, the
Commission proposes to remove the currently-not-enforced requirement
that a rate incentive must be made available to all mailers equally on
the same terms and conditions to be included in the percentage change
in rates calculation. Third, the Commission proposes to revise the
definition of ``rate of general applicability'' at Sec. 3030.101(j).
This revision would clarify a potential ambiguity. The Commission also
continues to propose to revise Sec. 3030.101(j) as initially proposed
in Order No. 6325 to clarify that to qualify as a rate of general
applicability, a rate incentive cannot have eligibility criteria based
on historical mail volumes or prior participation in a rate incentive
or promotion. Fourth, the Commission proposes to revise filing
requirements to ensure that the Postal Service provides sufficient
information at the outset of a Market Dominant rate adjustment
proceeding. Fifth, the Commission proposes to add a provision
authorizing it to require the submission of information to ensure that
rate incentives included in the percentage change in rates calculation
comply with applicable requirements.
The proposed mechanism allowing certain rate incentives that are
not rates of general applicability to be included in the percentage
change in rates calculation would allow a rate incentive for which a
mailer's eligibility depends on the mailer increasing its volumes of a
product (or multiple products) to be included in the percentage change
in
[[Page 79490]]
rates calculation. The Commission proposes this mechanism to encourage
the Postal Service to develop and offer such rate incentives, with the
goal of combatting volume decline.
The Commission also proposes to remove the currently-not-enforced
requirement that a rate incentive must be made available to all mailers
equally on the same terms and conditions to be included in the
percentage change in rates calculation. The Commission proposes to
remove this requirement because fairness concerns can be addressed
through other means and because this requirement has the potential to
cause confusion.
The Commission proposes revising the definition of ``rate of
general applicability'' in Sec. 3030.101(j) by adding the word
``only'' to the sentence addressing rates benefiting a single mailer so
that the sentence reads as follows: ``A rate is not a rate of general
applicability if it benefits only a single mailer.'' This change
removes a potential ambiguity in the sentence and ensures that the
sentence reflects the Commission's intent in adding the sentence to the
definition.
The Commission also continues to propose the changes to Sec.
3030.101(j) that it proposed in Order No. 6325. See Order No. 6325 at
26-34. These proposed changes to the definition of ``rate of general
applicability'' in Sec. 3030.101(j) are 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). As initially proposed in Order No. 6325, the proposed
changes add 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.
The Commission proposes to modify its rules for the technical
documentation required to support proposed rate incentives. These
proposed changes would implement changes conforming to the Commission's
proposed changes to its rules for including rate incentives in the
percentage change in rates calculation. Thus, under the proposed
revision, the Commission's rules would require a statement describing
the purpose of the rate incentive. Similarly, and to conform with the
proposed change to the definition of ``rate of general applicability,''
under the proposed revision, the rule would require a statement
affirming that a rate incentive proposed to be included in the
percentage change in rate calculation will not benefit only a single
mailer.
In addition, the Commission proposes requiring each request to
include a rate incentive in the percentage change in rates calculation
to include an estimate of the effect of the rate incentive on mailers
in the affected class that do not participate in the rate incentive, as
well as all information and calculations relied upon to develop such
estimate. The Commission proposes this change for transparency. This
proposed change would ensure that the public is provided notice of the
estimated effect of the proposed rate incentive on non-participating
mailers in the affected class. The Commission requires the information
and calculations relied upon to develop the estimate to ensure that it
understands the basis for the estimate and to provide transparency to
the public and affected stakeholders.
The Commission also proposes adding a provision authorizing it to
require the submission of information to ensure that rate incentives
included in the percentage change in rates calculation comply with
applicable requirements. In the Commission's experience, reporting
requirements are important to ensure that the Commission understands
how rate incentives operate in practice. The Commission's revised
proposal codifies the Commission's authority to impose such reporting
requirements.
III. Proposed Rule
List of Subjects
39 CFR Part 3030
Administrative practice and procedure, Fees, Postal Service.
For the reasons stated in the preamble, the Commission proposes to
amend 39 CFR part 3030 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 only 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. Amend Sec. 3030.123 by revising 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):
(i) The terms and conditions of the rate incentive;
(ii) The factors that determine eligibility for the rate incentive;
(iii) A statement that affirms that the rate incentive will not
benefit only a single mailer;
(iv) 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;
(v) A statement describing the purpose of the rate incentive; and
(vi) An estimate of the effect of the rate incentive on mailers in
the affected class that do not participate in the rate incentive and
all information and calculations relied upon to develop such estimate.
* * * * *
0
4. Amend Sec. 3030.128 by:
0
a. Revising paragraph (f)(2);
0
b. Adding paragraph (f)(3); and
0
c. Revising paragraph (g)(1).
The addition and revisions read as follows:
Sec. 3030.128 Calculation of percentage change in rates.
* * * * *
(f) * * *
[[Page 79491]]
(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); and
(iii) The rate incentive is either:
(A) A rate of general applicability; or
(B) A rate not of general applicability that satisfies the
following requirements:
(1) 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;
(2) The rate incentive is applicable to all mail meeting standards
established by the Mail Classification Schedule, the Domestic Mail
Manual, and the International Mail Manual;
(3) The rate incentive does not benefit only a single mailer;
(4) The rate incentive is designed to increase volume; and
(5) A mailer's eligibility for the rate incentive depends on the
mailer's sending, in a specified period of time (which must not be less
than three months) a volume of mail of specified products that exceeds
a specified threshold volume of mail, provided that such threshold
volume of mail is not less than the volume of the specified products
that the mailer sent in the specified period of time in the immediately
preceding fiscal year or calendar year.
(3) The Commission may require submission of such information as it
deems necessary to ensure that rate incentives included in the
percentage change in rates calculation comply with the requirements of
this section.
(g)(1) Mail volumes sent at rates under a negotiated service
agreement or a rate incentive that is not a rate of general
applicability are to be included in the calculation of the percentage
change in rates under this section as though they paid the appropriate
rates of general applicability, except as provided in paragraph (f)(2)
of this section. Where it is impractical to identify the rates of
general applicability (e.g., because unique rate categories are created
for a mailer), the volumes associated with the mail sent under the
terms of the negotiated service agreement or the rate incentive that is
not a rate of general applicability shall be excluded from the
calculation of the percentage change in rates.
* * * * *
By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2024-22125 Filed 9-27-24; 8:45 am]
BILLING CODE 7710-FW-P
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