New Postal Product

AGENCY:

Postal Regulatory Commission.

ACTION:

Notice.

SUMMARY:

The Commission is noticing a recently-filed Postal Service request to add a bilateral agreement with Canada Post to the Competitive Product List. A related contract affects the delivery of inbound surface parcel post and Xpresspost. This notice addresses procedural steps associated with these filings.

DATES:

Comments are due: December 14, 2009.

ADDRESSES:

Submit comments electronically via the Commission's Filing Online system at http://www.prc.gov. Commenters who cannot submit their views electronically should contact the person identified in “FOR FURTHER INFORMATION CONTACT” by telephone for advice on alternatives to electronic filing.

FOR FURTHER INFORMATION CONTACT:

Stephen L. Sharfman, General Counsel, 202-789-6820 or stephen.sharfman@prc.gov.

SUPPLEMENTARY INFORMATION:

I. Introduction

II. Notice of Filing

III. Ordering Paragraphs

I. Introduction

On November 25, 2009, the Postal Service filed a formal request pursuant to 39 U.S.C. 3642 and 39 CFR 3020.30 et seq. to add the Canada Post-United States Postal Service Contractual Bilateral Agreement for Inbound Competitive Services (Bilateral Agreement) to the Competitive Product List.¹ The Postal Service asserts that the Bilateral Agreement is a competitive product “not of general applicability” within the meaning of 39 U.S.C. 3632(b)(3). This Request has been assigned Docket No. MC2010-14.

The Postal Service contemporaneously filed notice, pursuant to 39 U.S.C. 3632(b)(3) and 39 CFR 3015.5, that the Governors have established prices and classifications not of general applicability for inbound competitive services as reflected in the Bilateral Agreement. More specifically, the Bilateral Agreement, which has been assigned Docket No. CP2010-13, governs the exchange of Inbound Parcel Post from Canada.

Existing agreement. The Postal Service acknowledges an existing bilateral agreement with Canada Post for inbound competitive services, which is set to expire at the end of calendar year 2009. Id. at 3. The Postal Service asserts that the proposed MCS language in Docket No. MC2010-14 “resembles the language” for the existing bilateral agreement and that the differences “reflect changes to certain operational details” including a reclassification of Canada Post's “Xpresspost-USA” product from a market dominant product to a competitive product. Id. The Commission reviewed and approved that bilateral agreement in Docket Nos. CP2009-9 and MC2009-8. The Commission had previously approved the “Xpresspost-USA” product as a market dominant product in Docket No. MC2009-7.² Qualifying that approval, however, the Commission noted that “Xpresspost exhibits characteristics of a competitive product.” Id. at 7.

Request. In support of its Request, the Postal Service filed the following materials: (1) A redacted version of the Governors' Decision including proposed Mail Classification Schedule (MCS) language, a management analysis of the Bilateral Agreement; certification of compliance with 39 U.S.C. 3633(a) and certification of the Governors' vote;³ (2) a Statement of Supporting Justification as required by 39 CFR 3020.32;⁴ (3) a redacted version of the agreement⁵; and (4) an application for non-public treatment of pricing and supporting documents filed under seal.⁶ Request at 2.

The Bilateral Agreement covers parcels arriving in the United States by surface transportation rather than air. Governors' Decision No. 09-16.⁷ The Bilateral Agreement also covers Xpresspost, a Canadian service for documents, packets, and light-weight packages. Id. The Bilateral Agreement allows Canada Post to tender surface parcels and Xpresspost to the Postal Service at negotiated prices rather than the default prices set by the Universal Postal Union. Id.

In the Statement of Supporting Justification, Lea Emerson, Executive Director, International Postal Affairs, asserts that “[t]he addition of the [Bilateral] Agreement as a competitive product will enable the Commission to verify that the agreement covers its attributable costs and enables competitive products, as a whole, to make a positive contribution to coverage of institutional costs.” Request, Attachment 2. Joseph Moeller, Manager, Regulatory Reporting and Cost Analysis, Finance Department, certifies that the contract complies with 39 U.S.C. 3633(a). Id., Attachment 1. He observes that the Bilateral Agreement “should not impair the ability of competitive products on the whole to cover an appropriate share of institutional costs.” Id.

II. Notice of Filing

The Commission establishes Docket Nos. MC2010-14 and CP2010-13 for consideration of the Request pertaining to the proposed Canada Post-United States Postal Service Contractual Bilateral Agreement product and the related Bilateral Agreement, respectively. In keeping with practice, these dockets are addressed on a consolidated basis for purposes of this Order; however, future filings should be made in the specific docket in which issues being addressed pertain.

Interested persons may submit comments on whether the Postal Service's filings in the captioned dockets are consistent with the policies of 39 U.S.C. 3632, 3633, or 3642, 39 CFR part 3015, and 39 CFR 3020 subpart B. Comments are due no later than December 14, 2009. The public portions of these filings can be accessed via the Commission's Web site (http//:www.prc.gov).

The Commission appoints Paul L. Harrington to serve as Public Representative in these dockets.

III. Ordering Paragraphs

It is ordered:

1. The Commission establishes Docket Nos. MC2010-14 and CP2010-13 for consideration of the matters raised in each docket.

2. Pursuant to 39 U.S.C. 505, Paul L. Harrington is appointed to serve as officer of the Commission (Public Representative) to represent the interests of the general public in these proceedings.

3. Comments by interested persons in these proceedings are due no later than December 14, 2009.

4. The Secretary shall arrange for publication of this order in the Federal Register.