Negotiated Service Agreement
Notice And Order Concerning Reconsideration And Establishing Procedures.
This document informs the public that at the request of the United States Postal Service Governors, the Commission will reconsider its opinion and recommended decision approving a negotiated service agreement in docket number MC2004-3. The Postal Service has been allowed until April 15, 2005, to submit arguments in favor of reconsideration. The dates for further procedural steps will be determined after the Postal Service submission has been reviewed.
Table of Contents Back to Top
DATES: Back to Top
The Postal Service's memorandum and proposal is due April 15, 2005.
FOR FURTHER INFORMATION CONTACT: Back to Top
Stephen L. Sharfman, general counsel, at 202-789-6818.
SUPPLEMENTARY INFORMATION: Back to Top
Procedural History Back to Top
Negotiated Service Agreement Proposed Rule, 68 FR 52546 (September 4, 2003).
Negotiated Service Agreement Final Rule, 69 FR 7574 (September 4, 2003).
Rate and Service Changes To Implement Functionally Equivalent Negotiated Service Agreement, 69 FR 39520 (June 25, 2004).
On December 17, 2004, the Commission issued its Opinion and Recommended Decision Approving Negotiated Service Agreement in Docket No. MC2004-3 (Bank One Negotiated Service Agreement). On March 7, 2005, the Postal Service informed the Commission of the Governors' direction  for the Postal Service to initiate proceedings on reconsideration consistent with the Governors' decision.  The Postal Service also proposed procedures and requested leave to file a memorandum on reconsideration.
In the Governors' decision, the Governors conclude that the changes recommended by the Commission to give effect to the negotiated service agreement warrant implementation. However, the Governors disagree with the Commission's determination to place an overall limit on the discounts available to Bank One during the course of the agreement. The Governors ask the Commission to reconsider the recommendation of an overall limit (stop-loss cap) in light of the Governors' views and based on the existing record. The Governors do not ask the Commission to reopen the record to receive additional testimony, but do expect that the Commission will solicit comments from participants in this matter.
If the Commission again recommends that the negotiated service agreement includes a stop-loss cap, the Governors request that the Commission clarify and explain further the comments in its Opinion and Recommended Decision, and in its separate Concurring Opinion, regarding the potential for uncapped negotiated service agreements that are functionally equivalent to the agreement with Capital One Services, Inc. approved in Docket No. MC2002-2.
The Governors also request that the Commission elaborate on the type and level of proof that the Commission might find persuasive in avoiding stop-loss caps in future baseline negotiated service agreement cases.
Finally, the Governors ask the Commission to discuss the role of settlement in uncontested cases involving functionally equivalent negotiated service agreements.
The Postal Service has proposed procedures to facilitate the Commission's reconsideration of its recommendations. The Postal Service proposes to present its views on the questions raised by the Governors in their decision in the form of a memorandum addressing the pertinent legal, economic, and practical issues. It also is prepared to propose an evidentiary approach that could serve as a standard for future negotiated service agreement proposals.
The Postal Service requests until April 15, 2005, to prepare its memorandum. It explains it needs this fairly lengthy period of time to prepare its submissions because it is simultaneously involved in preparation for the filing of an omnibus rate case. Participants as well as prospective negotiated agreement partners would then be allowed to comment on the Postal Service's views. The Postal Service suggests that the Commission next would address the Postal Service's and other participant's comments and proposals, and also would propose an approach to overcome its concerns that led to imposing a stop-loss cap in this case. Participants then would be allowed to comment on the Commission's views. Finally, the Commission would issue a further recommended decision including further explanations and guidance for future cases.
The Commission understands the need to promptly respond to the issues raised by the Governors upon reconsideration. Nonetheless, the Commission assumes that the Governors are aware of the multiple obligations of the Postal Service legal staff, and that if an omnibus rate case is filed this will impose heavy time pressure on participants most likely to seek to present thoughtful suggestions on negotiated service agreement policies to the Commission.
As a first step, the Commission grants the Postal Service's motion to file a memorandum addressing the pertinent legal, economic, and practical issues in regard to the questions raised by the Governors in their decision. The Postal Service also may include a proposal for an evidentiary approach that could serve as a standard for future negotiated service agreement proposals. The Postal Service shall file this material by April 15, 2005.
As the Postal Service must accommodate the time pressures involved with preparing for an omnibus rate case, participants in this proceeding for reconsideration also will face time pressures once the omnibus rate case is filed. For this reason, until the scope of the Postal Service comments and proposals can be evaluated it is premature to map out a procedural schedule for issuing an Opinion and Further Recommended Decision in this case.
The Commission will review and evaluate the scope and potential impact of the initial material submitted by the Postal Service before determining an appropriate procedural path to bring this docket to a conclusion, with due consideration to the scheduling difficulties all parties and the Commission face when an omnibus rate case is pending. After the Commission determines an appropriate procedural path, a procedural schedule will be established.
This notice and order initiates the reconsideration of the Commission's Opinion and Recommended Decision Approving Negotiated Service Agreement in Docket No. MC2004-3. The Secretary shall arrange for its publication in the Federal Register.
Ordering Paragraphs Back to Top
It is ordered:
1. The Commission will reconsider its Opinion and Recommended Decision Approving Negotiated Service Agreement in Docket No. MC2004-3 and issue a further recommended decision.
2. United States Postal Service Motion for Leave to File Memorandum on Reconsideration and for Proposed Procedures, March 7, 2005, is granted consistent with the text of this order. The Postal Service shall file its memorandum and proposal by April 15, 2005.
3. The Secretary shall arrange for publication of this notice and order in the Federal Register.
Issued: March 16, 2005.
By the Commission.
Steven W. Williams,
[FR Doc. 05-5504 Filed 3-18-05; 8:45 am]
BILLING CODE 7710-FW-P
Footnotes Back to Top
1. Decision of the Governors of the United States Postal Service on the Opinion and Recommended Decision of the Postal Rate Commission Approving Negotiated Service Agreement with Bank One Corporation, Docket No. MC2004-3, February 16, 2005 (Governors' decision).Back to Context
2. United States Postal Service Motion for Leave to File Memorandum on Reconsideration and for Proposed Procedures, March 7, 2005.Back to Context