Rule2025-03042
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
February 26, 2025
Effective
March 28, 2025
Issuing agencies
Postal Regulatory Commission
Abstract
The Commission is adopting amendments to its rules concerning rate incentives for Market Dominant products.
Full Text
<html>
<head>
<title>Federal Register, Volume 90 Issue 37 (Wednesday, February 26, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 37 (Wednesday, February 26, 2025)]
[Rules and Regulations]
[Pages 10689-10691]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-03042]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
========================================================================
Federal Register / Vol. 90, No. 37 / Wednesday, February 26, 2025 /
Rules and Regulations
[[Page 10689]]
POSTAL REGULATORY COMMISSION
39 CFR Part 3030
[Docket No. RM2020-5; Order No. 8708]
RIN 3211-AA27
Market Dominant Postal Products
AGENCY: Postal Regulatory Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Commission is adopting amendments to its rules concerning
rate incentives for Market Dominant products.
DATES: Effective: March 28, 2025.
FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at
202-789-6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Basis for Final Rules
III. Final Rules
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, unless mail volumes sent under it are
included as though they paid the appropriate rates of general
applicability.
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 proposed
further changes to its rules in Order No. 7559.\5\
---------------------------------------------------------------------------
\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 (D.C. 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).
\5\ Docket No. RM2020-5, Second Supplemental Notice of Proposed
Rulemaking to Amend Rules Regarding Rate Incentives for Market
Dominant Products, September 20, 2024 (Order No. 7559).
---------------------------------------------------------------------------
II. Basis for Rule Change
The Commission modifies its rules by revising the criteria that a
rate incentive must satisfy to be included in the percentage change in
rates calculation; revises the definition of ``rate of general
applicability;'' and revises filing and reporting requirements.
First, the Commission creates 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
removes the 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 revises the definition of ``rate of general applicability''
in Sec. 3030.101. This revision clarifies a potential ambiguity. The
Commission also revises the definition of ``rate of general
applicability'' 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
revises filing requirements to ensure that the Postal Service provides
sufficient information at the outset of a Market Dominant rate
adjustment proceeding. Fifth, the Commission adds 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 mechanism allowing certain rate incentives that are not rates
of general applicability to be included in the percentage change in
rates calculation allows a rate incentive for which a mailer's
eligibility depends on the mailer's increasing its volumes of a product
(or multiple products) to be included in the percentage change in rates
calculation. The Commission creates this mechanism to encourage the
Postal Service to develop and offer such rate incentives, with the goal
of combatting volume decline.
The Commission also removes the 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 removes this requirement because
fairness concerns can be addressed through other means and because this
requirement has the potential to cause confusion.
The Commission revises the definition of ``rate of general
applicability'' in Sec. 3030.101 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
[[Page 10690]]
Commission's intent in adding the sentence to the definition.
The Commission also adopts the changes to the definition of ``rate
of general applicability'' that it proposed in Order No. 6325. See
Order No. 6325 at 26-34. These changes to the definition of ``rate of
general applicability'' in Sec. 3030.101 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 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 wholly or
partially 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 modifies its rules for the technical documentation
required to support proposed rate incentives. These changes implement
changes conforming to the Commission's changes to its rules for
including rate incentives in the percentage change in rates
calculation. Thus, under the revision, the Commission's rules require a
statement describing the purpose of the rate incentive. Similarly, and
to conform with the change to the definition of ``rate of general
applicability,'' under the revision, the rule requires 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 requires 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 makes this change for transparency. This change ensures 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 adds 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 codifies its authority
to impose such reporting requirements.
III. Final Rules
List of Subjects in 39 CFR Part 3030
Administrative practice and procedure, Fees, Postal Service.
For the reasons stated in the preamble, the Commission amends 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:
0
a. Redesignating paragraphs (j) through (l) as paragraphs (k) through
(m);
0
b. Adding paragraph (j); and
0
c. Revising newly redesignated paragraph (k).
The addition and revisions read as follows:
Sec. 3030.101 Definitions.
* * * * *
(j) Rate incentive comparison period is a period of time in the
fiscal year or calendar year immediately before a rate incentive that
is not a rate of general applicability is offered. A rate incentive
comparison period must be not less than 3 months in length and not more
than 12 months in length. Except for a rate incentive that is not a
rate of general applicability that has a term of 1 calendar year, the
rate incentive comparison period is the same period of months and days
in the fiscal year or calendar year immediately before the rate
incentive is offered as the term of the rate incentive. For any rate
incentive that is not a rate of general applicability that has a term
of 1 calendar year, the rate incentive comparison period shall be
either: the calendar year that is most recently ended before the rate
incentive is offered; or the fiscal year that is most recently ended
before the rate incentive is offered.
(k) 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 new 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) * * *
(2) A rate incentive may be included in a percentage change in
rates
[[Page 10691]]
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, 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 rate incentive
comparison period.
(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. 2025-03042 Filed 2-25-25; 8:45 am]
BILLING CODE 7710-FW-P
</pre></body>
</html>Indexed from Federal Register on February 26, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.