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Notice

Plan for Secure Postage Meter Technology

Document Details

Information about this document as published in the Federal Register.

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This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

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AGENCY:

Postal Service.

ACTION:

Notice of final plan.

SUMMARY:

The Postal Service has already completed the first phase of a plan to remove insecure postage meters from use with the decertification of mechanical postage meters. The second phase of the plan, the retirement of manually reset electronic meters, is now underway in accordance with the notice published in the Federal Register on December 13, 2000 (Volume 65, Number 240, page 77934-77938). This notice publishes the final plan for phases III and IV of the Postal Service's Plan for Secure Postage Meter Technology. There may be additional phases of the plan beyond phase IV. Upon completion of all phases of the plan, meters in service will offer enhanced levels of security, thereby greatly reducing the Postal Service's exposure to meter fraud, misuse, and loss of revenue. These new meters also provide advanced customer features and convenience.

DATES:

This plan is effective November 15, 2001.

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FOR FURTHER INFORMATION CONTACT:

Wayne Wilkerson by fax at (703) 292-4073.

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SUPPLEMENTARY INFORMATION:

In 1995, the Postal Service, in cooperation with all authorized postage meter manufacturers, began a phaseout of all mechanical postage meters because of identified cases of indiscernible tampering and misuse. Postal Service revenues were proven to be at serious risk. The completion of this effort, which resulted in the withdrawal of 776,000 mechanical meters from service, completed phase I of the Plan for Secure Postage Meter Technology. Phase II of the plan, the retirement of electronic meters that are manually set by Postal Service employees, is now being implemented. Phases III and IV of the plan are described in the current notice.

The proposed plan for phases III and IV, describing the retirement of meters with nondigital or letterpress indicia, was published for comment in the Federal Register, August 21, 2000 (Vol. 65, No. 163, page 50723-50724). The Postal Service requested that comments on the proposed plan be submitted by October 5, 2000. The Postal Service received four written comments from postage meter manufacturers by the closing date. One comment, from an industry association, was received after the closing date but was still considered in our response.

The Postal Service gave thorough consideration to the comments, modified the proposed plan as appropriate, and now announces the adoption of the final plan. It is the Postal Service's intent to make this an orderly process that minimizes impacts on meter users and the meter manufacturers. Publication of the final plan for phases III and IV gives both postage meter manufacturers and postage meter users ample time to make timely and intelligent decisions on the selection of postage meters and associated mailing equipment.

The Postal Service's evaluation of the comments follows. The final plan, as revised, follows the discussion of comments. The comments are organized to reflect common topics addressed by the commenters.

Discussion of Comments

1. Timetable for Meter Retirement

Manufacturers questioned the timetable for withdrawal of letterpress meters, suggested various alternatives, and requested a “date certain” by which meters already placed with customers must be removed from service.

The Postal Service reviewed the various suggestions and revised the withdrawal timetable to ensure that all users will have appropriate technology available to meet their mail processing needs. The plan adds dates for customer notification to ensure ample time for customers to make timely and intelligent decisions on replacement meters and adds a date by which meters already placed with customers must be removed from service.

2. Realizing Return on Investment in Meter Technology

Meter manufacturers and the mailing industry association expressed concern that the early retirement of meters using letterpress technology would prevent them from receiving adequate return on their investments. The comments noted that the proposal must be sensitive to the requirements of users of high-volume/high-speed meters and the unique relationship these mailers have with the Postal Service, since these users tend to make longer-term determinations regarding postage and metering technology needs.

The retirement plan schedule gives customers 5 years from the date of notification to the date that nonenhanced, letterpress (phase III) meters already placed must be removed from service. Any newly placed phase III meter placed in accordance with the schedule may remain in service for at least 4 years before it must be removed. Users of enhanced letterpress (phase IV) meters have 51/2 years from the date of notification to the date that phase IV meters already placed must be removed from service. Any newly placed phase IV meter placed in accordance with the schedule may remain in service for at least 41/2 years before it must be removed. For manufacturers, publication of this notice provides at least 5 years to recover investments on nonenhanced letterpress technology, and over 7 years to recover investments on enhanced letterpress metering technology before the units must be removed from service.

3. Security of Meters

One industry association asked for information to support the Postal Service claim of increased security benefits from postage meters that have a timeout feature and use digital indicia, and for information on the actual risk to Postal Service revenue from meters that print indicia using letterpress technology, with or without a timeout feature.

The presence of a feature that disables letterpress meter operations when certain preprogrammed criteria are met increases its security but does not compensate for the insecurity inherent in letterpress technology. The printing die used for letterpress indicia is open to tampering in ways that the process used to print digital indicia is not. Digital printing technology also enables the printing of unique indicia, which permits the Postal Service to establish enhanced processes to identify counterfeit indicia.

4. Communications with Meter Users

One postage meter manufacturer was concerned about inadequate, misleading, or confusing communications to meter users, and suggested that phases III and IV be combined to avoid possible confusion that might arise from having multiple retirement dates.

The retirement schedule for phase III meters will differ from that for phase IV meters. The Postal Service is working to ensure the integrity of the meter retirement process with expeditious, accurate, and informative communications to postage meter users, Postal Service employees, and postage meter manufacturers, and it expects manufacturers to provide accurate, clear, and timely information to their customers.

5. Multiple Dates for Completing the Retirement of Letterpress Meters

One manufacturer suggested that the plan be sensitive to the needs of those mailers with multiple meters with different lease expiration dates.

The plan provides for one date by which all nonenhanced letterpress meters must be withdrawn from service, and one date by which all enhanced letterpress meters must be withdrawn from service.

6. Increased Cost

One industry association expressed concern with the increased cost of printing digital postage indicia compared with the cost of preparing mail using letterpress metering technology, as well as increased equipment costs, especially the need for new mailing equipment if the new digital meter is incompatible with the mailer's existing mailing equipment.

The Postal Service recognizes that there may be a slight increase in cost initially but believes this increase in cost will diminish as competition increases. Any additional costs for users are determined on a manufacturer-by-manufacturer basis and not by the Postal Service. Customers have choices in a competitive meter marketplace if they are not satisfied with the costs of a given manufacturer's technology. Individual Start Printed Page 57494meter manufacturers can provide detailed information about their products and services.

7. Classification of Meter Models as Nonenhanced or Enhanced

Some meter manufacturers questioned whether specific meter models would be classified as nonenhanced (phase III) or enhanced (phase IV) based on the presence of a feature that disables meter operations when certain preprogrammed criteria are met.

These issues involve company proprietary information. The Postal Service responded directly to the manufacturers concerned.

8. How the Retirement Plan for Letterpress Meters Will Be Enforced

One manufacturer asked about the enforcement of the retirement plan for letterpress meters.

After the date by which a meter must be withdrawn from service, the Postal Service, in coordination with the meter manufacturers, will prevent postage resets, and manufacturers will be required to take possession of the meter.

Final Postal Service Plan for the Retirement of Letterpress Postage Meters

Phases III and IV of the Postal Service proposed Plan for Secure Postage Meter Technology affect nondigital, or letterpress, meters that are remotely reset under the Computerized Meter Resetting System (CMRS). If such a meter has a feature that automatically disables the meter if it is not reset within a specified time period or when certain preprogrammed criteria are met, it is called an enhanced meter. Phase III of the proposed plan requires that the users of nonenhanced CMRS letterpress meters are notified of the schedule for the retirement of their meters by December 31, 2001. The placement of nonenhanced CMRS letterpress meters must cease by December 31, 2002, and these meters must be off the market by December 31, 2006. Phase IV of the proposed plan requires that the customers of enhanced CMRS letterpress meters are notified of the schedule for the retirement of their meters by June 30, 2003. The placement of enhanced CMRS letterpress meters must cease by June 30, 2004, and these meters must be off the market by December 31, 2008.

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Stanley F. Mires,

Chief Counsel, Legislative.

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[FR Doc. 01-28553 Filed 11-14-01; 8:45 am]

BILLING CODE 7710-12-P