Proposed Rule2025-10758
System for Regulating Rates and Classes for Market Dominant 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
June 13, 2025
Issuing agencies
Postal Regulatory Commission
Abstract
The notice of proposed rulemaking proposes revisions to the system for regulating rates and classes for Market Dominant products (ratemaking system). In Order No. 8891, the Commission determined that the ratemaking system was not achieving the statutory objectives. Two proposed revisions address concerns: restricting rate adjustments to once per fiscal year from 2025 to 2030 and ensuring workshare discounts align with avoided costs to enhance efficiency by closing a regulatory gap allowing excessive passthrough reductions. These proposals aim to enhance predictability, reduce administrative burden, and maximize efficiency and cost reduction, ensuring a ratemaking system that better fulfills the statutory objectives. This document informs the public of the filing, invites public comment, and takes other administrative steps.
Full Text
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<title>Federal Register, Volume 90 Issue 113 (Friday, June 13, 2025)</title>
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[Federal Register Volume 90, Number 113 (Friday, June 13, 2025)]
[Proposed Rules]
[Pages 25006-25007]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-10758]
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POSTAL REGULATORY COMMISSION
39 CFR Part 3030
[Docket Nos. RM2021-2, RM2022-5, RM2022-6, and RM2024-4; Order No.
8893]
RIN 3211-AA37
System for Regulating Rates and Classes for Market Dominant
Products
AGENCY: Postal Regulatory Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The notice of proposed rulemaking proposes revisions to the
system for regulating rates and classes for Market Dominant products
(ratemaking system). In Order No. 8891, the Commission determined that
the ratemaking system was not achieving the statutory objectives. Two
proposed revisions address concerns: restricting rate adjustments to
once per fiscal year from 2025 to 2030 and ensuring workshare discounts
align with avoided costs to enhance efficiency by closing a regulatory
gap allowing excessive passthrough reductions. These proposals aim to
enhance predictability, reduce administrative burden, and maximize
efficiency and cost reduction, ensuring a ratemaking system that better
fulfills the statutory objectives. This document informs the public of
the filing, invites public comment, and takes other administrative
steps.
DATES: Comments are due: July 14, 2025.
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. 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 of Proposed Rules
III. Proposed Rules
I. Background
On April 5, 2024, the Commission issued an advance notice of
proposed rulemaking seeking comments on the Commission's review of the
system for regulating rates and classes for Market Dominant products
(ratemaking system).\1\ In Order No. 8891, the Commission determined
that the system for regulating rates and classes for Market Dominant
products was not achieving the objectives appearing in 39 U.S.C.
3622(b), taking into account the factors in 39 U.S.C. 3622(c) and has
determined to undertake a phased approach to considering modifications
necessary to achieve the statutory objectives.\2\
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\1\ Docket Nos. RM2021-2, RM2022-6, RM2022-5 and RM2024-4,
Advance Notice of Proposed Rulemaking on the Statutory Review of the
System for Regulating Rates and Class for Market Dominant Products,
April 5, 2024 (Order No. 7032) (89 FR 25554, April 11, 2024). The
Commission previously reviewed the ratemaking system and adopted
final rules via Order No. 5763. See generally Docket No. RM2027-3,
Order Adopting Final Rules for the System of Regulating Rates and
Classes for Marketing Dominant Products, November 30, 2020 (5763)
(85 FR 81124, December 15, 2020). After the final rules took effect
on January 14, 2021, the Postal Service filed several rate
adjustments for Market Dominant products, and Market Dominant volume
and pieces declined year-over-year. These declines and stakeholder
concerns prompted the Commission to initiate another review of the
ratemaking system. See generally Order No. 7032.
\2\ Order Presenting Findings on the Statutory Review of the
System for Regulating Rates and Classes for Market Dominant Products
(Phase 1 Completion), June 9, 2025 (Order No. 8891); Procedural
Order on Phased Rulemaking, June 9, 2025 (Order No. 8892).
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II. Basis of Proposed Rules
Pursuant to 39 U.S.C. 503 and 3622, the Commission considers
proposed revisions to its rules pertaining to two aspects of the
ratemaking system at this time.
First, in response to Order No. 7032, many commenters express their
concerns about the frequency of the Market Dominant rate adjustments
that the Postal Service has implemented since the issuance of Order No.
5763. Since the issuance of Order No. 5763, the Postal Service
established a schedule of implementing rate adjustments twice each
year, with a few exceptions. Commenters generally assert that the
Postal Service's current schedule of twice-per-year Market Dominant
rate adjustments frustrates the achievement of the statutory objectives
to ``create predictability and stability in rates'' and to ``reduce the
administrative burden and increase the transparency of the ratemaking
process'' as provided by Objectives 2 and 6 respectively. See 39 U.S.C.
3622(b)(2) and (6). To address the observed weaknesses relating to
[[Page 25007]]
achieving these statutory objectives, the Commission proposes to
restrict the Postal Service from adjusting rates of general
applicability for Market Dominant products more than once per fiscal
year from October 1, 2025, through October 1, 2030, unless such rate
adjustment filings only include rate decreases or are de minimis rate
increases. See id. At this time, the Commission finds it prudent to
include a 5-year sunset period on the proposed rule (i.e., the proposed
rule will be effective from October 1, 2025, through October 1, 2030).
This would promote stability for mailers in the next 5 years while also
recognizing the uncertainties of the environment over which the
ratemaking system regulates and in which the Postal Service operates.
The Commission is interested in receiving comments from stakeholders on
the proposed sunset period and the proposed effective dates of October
1, 2025, through October 1, 2030. Depending on public comment, the
Commission may decide to consider potential adjustments to the proposed
sunset period and the proposed effective dates of October 1, 2025,
through October 1, 2030.
Second, in response to Order No. 7032, several commenters express
concerns that the Postal Service's approach to setting workshare
discounts under the Modified Ratemaking System undermines efficiency
and frustrates the achievement of multiple statutory objectives. As
noted several times in Docket No. RM2017-3, workshare discounts are
considered most efficient when discounts are set as closely as
practicable to the avoided costs of the particular workshare activity
(i.e., 100 percent passthroughs). See e.g., Order No. 5763 at 8. In
Order No. 5763, the Commission codified Sec. 3030.282, labeling it as
a ``do no harm'' principle, intended to prohibit the Postal Service
from making workshare discounts more inefficient. Order No. 5763 at
214. However, since its adoption of these rules, a regulatory gap in
Sec. 3030.282 inadvertently permits the Postal Service to reduce
workshare discounts with excessive passthroughs down to the 85 percent
passthrough floor found in Sec. 3030.284(e), frustrating the ``do no
harm principle.'' To correct this regulatory gap that directly affects
the achievement of Objective 1 (maximizing incentives to reduce costs
and increase efficiency), the Commission proposes an amendment to
ensure that workshare discounts remain as close to avoided costs as
possible. See 39 U.S.C. 3622(b)(1).
Each proposal is necessary to address areas that frustrate the
ability of the ratemaking system to achieve the statutory objectives
found in 39 U.S.C. 3622.
III. Proposed Rules
The Commission proposes revisions to the system for regulating
rates and classes for Market Dominant products (ratemaking system).
These proposals aim to enhance predictability, reduce administrative
burden, and maximize efficiency and cost reduction, ensuring a
ratemaking system that better fulfills the statutory objectives.
List of Subjects in 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
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1. The authority citation for part 3030 continues to read as follows:
Authority: 39 U.S.C. 503; 3622.
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2. Add Sec. 3030.103 to read as follows:
Sec. 3030.103 Implementation of rate adjustments.
(a) Except as described in paragraph (b) of this section, effective
October 1, 2025, through October 1, 2030, the Postal Service may not
adjust rates of general applicability for Market Dominant products
using the rate authorities provided under subparts C through H of this
part more than one time each fiscal year.
(b) Rate adjustment filings that only include rate decreases
calculated pursuant to Sec. 3030.244 or are de minimis rate increases
compliant with Sec. 3030.129 are not subject to paragraph (a) of this
section.
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3. In Sec. 3030.282, add paragraph (d) to read as follows:
Sec. 3030.282 Increased pricing efficiency.
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(d) No proposal to adjust a rate associated with a workshare
discount may increase the absolute value of the difference between the
workshare discount and the cost avoided by the Postal Service for not
providing the applicable service.
By the Commission. Commissioner Ann C. Fisher dissenting.
Erica A. Barker,
Secretary.
[FR Doc. 2025-10758 Filed 6-12-25; 8:45 am]
BILLING CODE 7710-FW-P
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