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Rule

New Postal Product

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Start Preamble

AGENCY:

Postal Regulatory Commission.

ACTION:

Final rule.

SUMMARY:

The Commission is adding a bilateral agreement between the U.S. Postal Service and Canada Post for inbound market dominant services. This action is consistent with a postal reform law. Republication of the Market Dominant List and Competitive Product List is also consistent with statutory provisions.

DATES:

Effective February 2, 2010 and is applicable beginning December 30, 2009.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

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

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Regulatory History, 74 FR 64771 (December 8, 2009).

Table of Contents

I. Introduction

II. Background

III. Comments

IV. Commission Analysis

V. Ordering Paragraphs

I. Introduction

The Postal Service seeks to add a new product identified as Canada Post-United States Postal Service Contractual Bilateral Agreement for Inbound Market Dominant Services to the Market Dominant Product List. For the reasons discussed below, the Commission approves the Request.

II. Background

On November 19, 2009, the Postal Service filed a request pursuant to

39 U.S.C. 3622(c)(10) and 3642, and 39 CFR 3010.40 et seq. and 3020.30 et seq. to add the Canada Post-United States Postal Service Contractual Bilateral Agreement for Inbound Market Dominant Services (Bilateral Agreement or Agreement) to the Market Dominant Product List.[1] This Request has been assigned Docket No. MC2010-12.

The Postal Service contemporaneously filed notice that the Governors have authorized a Type 2 rate adjustment to establish rates for inbound market dominant services as reflected in the Bilateral Agreement.[2] More specifically, the Bilateral Agreement, which has been assigned Docket No. R2010-2, governs the exchange of inbound air and surface letter post (LC/AO).[3]

Request. In support of its Request, the Postal Service filed the following materials: (1) Proposed Mail Classification Schedule (MCS) language;[4] (2) a Statement of Supporting Justification as required by 39 CFR 3020.32;[5] (3) a redacted version of the agreement;[6] and (4) an application for non-public treatment of pricing and supporting documents filed under seal.[7] Request at 2.

In the Statement of Supporting Justification, Lea Emerson, Executive Director, International Postal Affairs, reviews the factors of section 3622 and concludes, inter alia, that the revenues generated will cover the attributable costs of the services offered under the Bilateral Agreement; that the rates are preferable to default rates set by the Universal Postal Union; and that the rates represent a modest increase over those reflected in the existing bilateral agreement with Canada Post. Id., Attachment 2, at 2-3.

In its Request, the Postal Service provides information responsive to part 3010, subpart D, of the Commission's rules. To that end, it addresses the requirements of section 3622(c)(10) as well as certain details of the negotiated service agreement. Id. at 2-7. The Postal Service asserts that the Bilateral Agreement satisfies all applicable statutory criteria. Id. at 6-8.

The Postal Service filed much of the supporting materials, financial analysis, and the Bilateral Agreement under seal. Id. at 2. In its Request, the Postal Service maintains that the Bilateral Agreement and related financial information should remain under seal. Id.

The Postal Service has an existing bilateral agreement with Canada Post, which is set to expire December 31, 2009.[8] Id., Attachment 3, at 7. The instant Bilateral Agreement is a two-year agreement comparable to the existing agreement, with some modifications. The modifications include differences in specific operational details and the Postal Service's decision to classify Canada Post's “Xpresspost-USA” as a competitive product instead of a market dominant product as in the existing bilateral agreement.[9] The Agreement states it has an effective date of January 1, 2010. Id. at 3. The Request states that the inbound market dominant rates are scheduled to become effective on January 4, 2010. Id.

The Postal Service urges the Commission to act promptly to add this product to the Market Dominant Product List to allow rates to be implemented under 39 CFR 3010.40. Id. at 7.

In Order No. 346, the Commission gave notice of the docket, appointed a Public Representative, and provided the public with an opportunity to comment.[10]

On December 4, 2009, Chairman's Information Request No. 1 (CHIR No. 1) was issued, which sought clarification of various elements related to the proposed Bilateral Agreement. A response was due from the Postal Service by December 10, 2009. The Postal Service filed its responses to Start Printed Page 5237CHIR No.1, questions 1-7 and 9-11, on December 10, 2009.[11]

On December 11, 2009, the Postal Service filed the response to question 8 as required.[12]

III. Comments

Comments were filed by the Public Representative.[13] No other interested person submitted comments. The Public Representative states that the Commission may want to consider adding additional rules specific to bilateral agreements with foreign postal administrations. Id. at 2. The Public Representative observes that because there are no similarly situated mailers comparable to Canada Post, compliance with 39 CFR 3010.40 may be at issue. Id.

The Public Representative also notes that the rates set under the UPU Convention may need further examination and suggests that the Commission continue to promote efficient pricing. Id. at 3.

The Public Representative relates that performance requirements in the Agreement such as presorting of airmail items and providing transportation to multiple mail acceptance centers increase efficiency and are a benefit to the Postal Service and the general public. Id. He also notes that the Commission determined in Docket Nos. MC2009-7 and R2009-1 that inbound Letter Post from Canada should be classified as two separate products, Air LC and Surface AO as market dominant, and Xpresspost as a competitive product. The Public Representative observes that in accordance with the Commission finding, the Postal Service has not included the Xpresspost product in this filing. Id. at 3-4. The Public Representative states that the Commission will glean further information on international mail services in the future from the Postal Service's filing of its Annual Compliance Report. Id. at 3. The Public Representative concludes that the Bilateral Agreement appears to comport with the applicable provisions of title 39.

IV. Commission Analysis

The Commission has reviewed the Agreement, supporting documentation, the financial analysis provided under seal that accompanies it, responses to the Chairman's Information Request and the comments filed by the Public Representative.

Statutory requirements. The Commission's statutory responsibilities in this instance entail assigning the Bilateral Agreement to either the Market Dominant Product List or to the Competitive Product List. 39 U.S.C. 3642. As part of this responsibility, the Commission also reviews the proposal for compliance with the Postal Accountability and Enhancement Act (PAEA) requirements. This includes, for proposed market dominant products, a review of section 3622(c)(10).

Product list assignment. In determining whether to assign the Bilateral Agreement as a product to the Market Dominant Product List or the Competitive Product List, the Commission must consider whether “the Postal Service exercises sufficient market power that it can effectively set the price of such product substantially above costs, raise prices significantly, decrease quality, or decrease output, without risk of losing a significant level of business to other firms offering similar products.” 39 U.S.C. 3642(b)(1). If so, the product will be categorized as market dominant. The competitive category of products shall consist of all other products.

The Commission is further required to consider the availability and nature of enterprises in the private sector engaged in the delivery of the product, the views of those who use the product, and the likely impact on small business concerns. 39 U.S.C. 3642(b)(3).

The Postal Service notes that the performance responsibilities in the instant agreement are consistent with the precursor agreement in Docket Nos. MC2009-7 and R2009-1. Id. at 5. As stated above, it notes that the current Bilateral Agreement continues to include work-sharing arrangements and providing transportation for inbound airmail items to multiple Postal Service International Service Centers for acceptance. Id. The Postal Service relates that the rates in the Bilateral Agreement provide superior cost coverage to the default rates set by the UPU and represent a modest increase over those in the previous agreement. It also states the new rates will have little effect on either Canada Post or American recipients. Request, Attachment 2, at 3.

The Postal Service contends that its monopoly on certain inbound letters from Canada within certain price and weight limits make it fairly certain that private entities would not be able to serve the United States market for Inbound Letter Post from Canada. Id. at 5. It also states that there are no similarly situated entities to Canada Post with the ability to tender Letter Post from Canada under similar operational conditions, nor any other entities that serve as a designated operator for Letter Post originating in Canada. Id. at 7. Therefore, the Postal Service states that it cannot envision a similarly situated mailer which could enter into a similar agreement. Id.

The Postal Service also contends that there is no significant competition in this market. As a result, it believes the Bilateral Agreement does not pose competitive harm in the marketplace.[14] Id., Attachment 2, para. (h). It states that there have been agreements between the United States and Canada Post for these services (under rules set by the UPU) since 1888. Id., para. (g).

The Postal Service asserts that the parties to this agreement serve as their designated entities for the exchange of mail, inclusive of Letter Post. Id. at 5. It contends that the Bilateral Agreement allows it to continue to offer Canada Post and small businesses in the United States affordable, reliable options for mailing letters and merchandise to the United States. Id. It states because there is no significant direct competition for Inbound Letter Post from Canada, it expects there will be no significant impact on small business competitors. The Postal Service also states that it is unaware of any small business concerns that offer competing services. Therefore, the Postal Service concludes that there can be no reasonable expectation of any competitive harm to the marketplace. Id. at 6.

No commenter opposes the proposed classification of the Bilateral Agreement as market dominant. Having considered the statutory requirements and the support offered by the Postal Service, the Commission finds, for purposes of this proceeding, that the Canada Post-United States Postal Service Contractual Start Printed Page 5238Bilateral Agreement for Inbound Market Dominant Services may be classified as a market dominant product and added to the Market Dominant Product List.

Additionally, in CHIR No. 1, Question 4, the Commission sought a more comprehensive description of the product “Canada Post-United States Postal Service Contractual Bilateral Agreement for Inbound Market Dominant Services” suitable for inclusion in the Mail Classification Schedule. While the level of detail in the Postal Service's response may not be optimal, the Commission will incorporate the Postal Service's proposed language into the draft Mail Classification Schedule subject to change.

Section 3622(c)(10) compliance. The Postal Service's filing seeks to establish a new international mail product. The requirements of 39 U.S.C. 3622(c)(10) obligate the Commission, when reviewing a negotiated service agreement, to determine whether such an agreement (1) Improves the net financial position of the Postal Service or enhances the performance of operational functions; (2) will not cause unreasonable harm to the marketplace; and (3) will be available on public and reasonable terms to similarly situated mailers. The Commission concludes that the requirements of 39 U.S.C. 3622(c)(10)(A) are met. The Agreement provides delivery and scanning performance objectives and incentives to promote operational improvement. Id. at 4-5. The Postal Service filed information under seal regarding costs, volumes, and anticipated revenues. The Postal Service represents that the new Agreement “includes performance-based incentives to promote cost reduction, increase efficiency, and improve service performance.” Id., Attachment 2, at 2.

The Postal Service observes that the Bilateral Agreement provides incentives to encourage operational improvement. Additionally, the Postal Service asserts that the rates in the Bilateral Agreement result in a higher cost coverage than the default rates set by the UPU. Id. at 3.

Finally, the Postal Service asserts that the instant Agreement will not result in unreasonable harm to the marketplace because, among other things, Canada Post and the Postal Service are their respective countries' designated operators for the exchange of letter mail, and it states that the market is limited to these parties. Id., para. (f). The Commission accepts the Postal Service representations and finds that the Bilateral Agreement is consistent with 39 U.S.C. 3622(c)(10).

To facilitate analysis, the Public Representative suggests that perhaps the Commission should develop new rules that are specific to bilateral agreements with foreign posts. The Commission acknowledges that the criterion that negotiated service agreements must be available on public and reasonable terms to similarly situated mailers (section 3622(c)(10)) is inapplicable to this Bilateral Agreement. However, other provisions of the rule do apply, and accordingly, the Commission need not specifically address additional requirements for bilateral agreements between postal administrations in its rules. The PAEA establishes the policy objectives of the Commission for international postal arrangements, and the current rules for negotiated service agreements are sufficient for determining the Postal Service's compliance at this time.

Data issues. The Commission's review of the supporting data for the current Agreement raises several areas of concern. The first issue is that the Postal Service relies on outdated financial data in its supporting documentation for the Bilateral Agreement. When forecasting unit costs for the contract period, it is preferable to use the most recent data. In its filing, the Postal Service uses FY 2008 unit costs to forecast cost for CY 2010 and CY 2011. In its response to CHIR No. 1, Questions 3 and 4, the Postal Service stated that it is unable to provide even preliminary FY 2009 unit costs for processing, delivery, and other. Similarly, the Postal Service stated that per-kilogram costs for FY 2009 for domestic air transportation and domestic surface transportation are also unavailable. The Commission is concerned that using Global Insight indices to forecast three years into the future may produce inaccurate results. In future requests, the Commission requests the Postal Service to submit the most recent supporting data available even if it is unaudited, in addition to the most recent ACD data.

The second issue arising from the analysis of the supporting documentation is the occurrence of anomalies in the data. In its financial model, the Postal Service utilized a different methodology to forecast costs for the contract period than in the previous bilateral agreement. In the current filing, the Postal Service's financial model uses cost by shape to estimate processing, delivery, and “other” costs for the contract period. These costs by shape are developed using the weighted tallies from IOCS for distributing both Air LC and Surface AO attributable cost to letters, flats, and parcels. The Commission is concerned with anomalies in the resulting data. For example, the Surface AO letter unit processing cost is more than 130 times that of a Surface AO parcel. The Commission has seen such anomalies surface in the past with regard to international mail. The data obtained from IOCS may be inaccurate if the number of IOCS tallies is too few to produce figures with a reasonable margin of error. While the Commission recognizes the difficulties in dealing with a small sample size, for future filings, the Commission expects the Postal Service to improve shape-specific unit costs. If feasible, the Postal Service should perform a special study to determine unit cost by shape.

Finally, the Commission expects that the supporting documentation filed by the Postal Service will provide accurate source information to support data in the worksheets. The Postal Service should provide a complete explanation of the rationale in instances where “USPS pricing decision” is used to source information.

Based on the data submitted and the comments received, the Commission finds that the Bilateral Agreement comports with section 3622(c)(10). Thus, an initial review of the proposed Bilateral Agreement indicates that it comports with the provisions applicable to rates for market dominant products.

Other considerations. The Postal Service shall, no later than 30 days after the effective date of the new contract, provide cost, revenue, and volume data associated with the current contract.

The Postal Service submitted the Bilateral Agreement, which has not been executed by the parties. The Postal Service is directed to file the executed Bilateral Agreement with the Commission within 30 days of its execution.

The Postal Service shall promptly notify the Commission if the Agreement terminates earlier than the proposed two-year term, but no later than the actual termination date. The Commission will then remove the Agreement from the Mail Classification Schedule at the earliest possible opportunity.

In conclusion, the Commission approves the Canada Post-United States Postal Service Contractual Bilateral Agreement for Inbound Market Dominant Services as a new product. The revision to the Market Dominant Product List is shown below the signature of this order and is effective upon issuance of this order.

V. Ordering Paragraphs

It is ordered:

1. Canada Post-United States Postal Service Contractual Bilateral Agreement for Inbound Market Dominant Services Start Printed Page 5239(MC2010-12 and R2010-2) is added to the Market Dominant Product List as a new product under Negotiated Service Agreements, Inbound International.

2. The Postal Service shall notify the Commission if the Agreement terminates earlier than the proposed two-year term.

3. The Postal Service shall report the cost, revenue, and volume data under the expiring contract as set forth in this order.

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

Start List of Subjects

List of Subjects in 39 CFR Part 3020

End List of Subjects Start Signature

By the Commission.

Shoshana M. Grove,

Secretary.

End Signature Start Amendment Part

For the reasons discussed in the preamble, the Postal Regulatory Commission amends chapter III of title 39 of the Code of Federal Regulations as follows:

End Amendment Part Start Part

PART 3020—PRODUCT LISTS

End Part Start Amendment Part

1. The authority citation for part 3020 continues to read as follows:

End Amendment Part Start Authority

Authority: Authority: 39 U.S.C. 503; 3622; 3631; 3642; 3682.

End Authority Start Amendment Part

2. Revise Appendix A to Subpart A of Part 3020-Mail Classification Schedule to read as follows:

End Amendment Part Start Appendix

Appendix A to Subpart A of Part 3020—Mail Classification Schedule

Part A—Market Dominant Products
1000 Market Dominant Product List
First-Class Mail
Single-Piece Letters/Postcards
Bulk Letters/Postcards
Flats
Parcels
Outbound Single-Piece First-Class Mail International
Inbound Single-Piece First-Class Mail International
Standard Mail (Regular and Nonprofit)
High Density and Saturation Letters
High Density and Saturation Flats/Parcels
Carrier Route
Letters
Flats
Not Flat-Machinables (NFMs)/Parcels
Periodicals
Within County Periodicals
Outside County Periodicals
Package Services
Single-Piece Parcel Post
Inbound Surface Parcel Post (at UPU rates)
Bound Printed Matter Flats
Bound Printed Matter Parcels
Media Mail/Library Mail
Special Services
Ancillary Services
International Ancillary Services
Address List Services
Caller Service
Change-of-Address Credit Card Authentication
Confirm
International Reply Coupon Service
International Business Reply Mail Service
Money Orders
Post Office Box Service
Negotiated Service Agreements
HSBC North America Holdings Inc. Negotiated Service Agreement
Bookspan Negotiated Service Agreement
Bank of America Corporation Negotiated Service Agreement
The Bradford Group Negotiated Service Agreement
Inbound International
Canada Post—United States Postal Service Contractual Bilateral Agreement for Inbound Market Dominant Services (MC2010-12 and R2010-2)
Market Dominant Product Descriptions
First-Class Mail
[Reserved for Class Description]
Single-Piece Letters/Postcards
[Reserved for Product Description]
Bulk Letters/Postcards
[Reserved for Product Description]
Flats
[Reserved for Product Description]
Parcels
[Reserved for Product Description]
Outbound Single-Piece First-Class Mail International
[Reserved for Product Description]
Inbound Single-Piece First-Class Mail International
[Reserved for Product Description]
Standard Mail (Regular and Nonprofit)
[Reserved for Class Description]
High Density and Saturation Letters
[Reserved for Product Description]
High Density and Saturation Flats/Parcels
[Reserved for Product Description]
Carrier Route
[Reserved for Product Description]
Letters
[Reserved for Product Description]
Flats
[Reserved for Product Description]
Not Flat-Machinables (NFMs)/Parcels
[Reserved for Product Description]
Periodicals
[Reserved for Class Description]
Within County Periodicals
[Reserved for Product Description]
Outside County Periodicals
[Reserved for Product Description]
Package Services
[Reserved for Class Description]
Single-Piece Parcel Post
[Reserved for Product Description]
Inbound Surface Parcel Post (at UPU rates)
[Reserved for Product Description]
Bound Printed Matter Flats
[Reserved for Product Description]
Bound Printed Matter Parcels
[Reserved for Product Description]
Media Mail/Library Mail
[Reserved for Product Description]
Special Services
[Reserved for Class Description]
Ancillary Services
[Reserved for Product Description]
Address Correction Service
[Reserved for Product Description]
Applications and Mailing Permits
[Reserved for Product Description]
Business Reply Mail
[Reserved for Product Description]
Bulk Parcel Return Service
[Reserved for Product Description]
Certified Mail
[Reserved for Product Description]
Certificate of Mailing
[Reserved for Product Description]
Collect on Delivery
[Reserved for Product Description]
Delivery Confirmation
[Reserved for Product Description]
Insurance
[Reserved for Product Description]
Merchandise Return Service
[Reserved for Product Description]
Parcel Airlift (PAL)
[Reserved for Product Description]
Registered Mail
[Reserved for Product Description]
Return Receipt
[Reserved for Product Description]
Return Receipt for Merchandise
[Reserved for Product Description]
Restricted Delivery
[Reserved for Product Description]
Shipper-Paid Forward
[Reserved for Product Description]
Signature Confirmation
[Reserved for Product Description]
Special Handling
[Reserved for Product Description]
Stamped Envelopes
[Reserved for Product Description]
Stamped Cards
[Reserved for Product Description]
Premium Stamped Stationery
[Reserved for Product Description]
Premium Stamped Cards
[Reserved for Product Description]
International Ancillary Services
[Reserved for Product Description]
International Certificate of Mailing
[Reserved for Product Description]
International Registered Mail
[Reserved for Product Description]
International Return Receipt
[Reserved for Product Description]
International Restricted Delivery
[Reserved for Product Description]
Address List Services
[Reserved for Product Description]
Caller Service
[Reserved for Product Description]
Change-of-Address Credit Card Authentication
[Reserved for Product Description]
Confirm
[Reserved for Product Description]
International Reply Coupon Service
[Reserved for Product Description]
International Business Reply Mail Service
[Reserved for Product Description]
Money Orders
[Reserved for Product Description]
Post Office Box Service
[Reserved for Product Description]
Start Printed Page 5240
Negotiated Service Agreements
[Reserved for Class Description]
HSBC North America Holdings Inc. Negotiated Service Agreement
[Reserved for Product Description]
Bookspan Negotiated Service Agreement
[Reserved for Product Description]
Bank of America Corporation Negotiated Service Agreement
The Bradford Group Negotiated Service Agreement
Part B—Competitive Products
2000 Competitive Product List
Express Mail
Express Mail
Outbound International Expedited Services
Inbound International Expedited Services
Inbound International Expedited Services 1 (CP2008-7)
Inbound International Expedited Services 2 (MC2009-10 and CP2009-12)
Inbound International Expedited Services 3 (MC2010-13 and CP2010-12)
Priority Mail
Priority Mail
Outbound Priority Mail International
Inbound Air Parcel Post (at non-UPU rates)
Royal Mail Group Inbound Air Parcel Post Agreement
Inbound Air Parcel Post (at UPU rates)
Parcel Select
Parcel Return Service
International
International Priority Airlift (IPA)
International Surface Airlift (ISAL)
International Direct Sacks—M—Bags
Global Customized Shipping Services
Inbound Surface Parcel Post (at non-UPU rates)
Canada Post—United States Postal Service Contractual Bilateral Agreement for Inbound Competitive Services (MC2009-8 and CP2009-9)
International Money Transfer Service
International Ancillary Services
Special Services
Premium Forwarding Service
Negotiated Service Agreements
Domestic
Express Mail Contract 1 (MC2008-5)
Express Mail Contract 2 (MC2009-3 and CP2009-4)
Express Mail Contract 3 (MC2009-15 and CP2009-21)
Express Mail Contract 4 (MC2009-34 and CP2009-45)
Express Mail Contract 5 (MC2010-5 and CP2010-5)
Express Mail Contract 6 (MC2010--6 and CP2010-6)
Express Mail Contract 7 (MC2010--7 and CP2010-7)
Express Mail & Priority Mail Contract 1 (MC2009-6 and CP2009-7)
Express Mail & Priority Mail Contract 2 (MC2009-12 and CP2009-14)
Express Mail & Priority Mail Contract 3 (MC2009-13 and CP2009-17)
Express Mail & Priority Mail Contract 4 (MC2009-17 and CP2009-24)
Express Mail & Priority Mail Contract 5 (MC2009-18 and CP2009-25)
Express Mail & Priority Mail Contract 6 (MC2009-31 and CP2009-42)
Express Mail & Priority Mail Contract 7 (MC2009-32 and CP2009-43)
Express Mail & Priority Mail Contract 8 (MC2009-33 and CP2009-44)
Parcel Select & Parcel Return Service Contract 1 (MC2009-11 and CP2009-13)
Parcel Select & Parcel Return Service Contract 2 (MC2009-40 and CP2009-61)
Parcel Return Service Contract 1 (MC2009-1 and CP2009-2)
Priority Mail Contract 1 (MC2008-8 and CP2008-26)
Priority Mail Contract 2 (MC2009-2 and CP2009-3)
Priority Mail Contract 3 (MC2009-4 and CP2009-5)
Priority Mail Contract 4 (MC2009-5 and CP2009-6)
Priority Mail Contract 5 (MC2009-21 and CP2009-26)
Priority Mail Contract 6 (MC2009-25 and CP2009-30)
Priority Mail Contract 7 (MC2009-25 and CP2009-31)
Priority Mail Contract 8 (MC2009-25 and CP2009-32)
Priority Mail Contract 9 (MC2009-25 and CP2009-33)
Priority Mail Contract 10 (MC2009-25 and CP2009-34)
Priority Mail Contract 11 (MC2009-27 and CP2009-37)
Priority Mail Contract 12 (MC2009-28 and CP2009-38)
Priority Mail Contract 13 (MC2009-29 and CP2009-39)
Priority Mail Contract 14 (MC2009-30 and CP2009-40)
Priority Mail Contract 15 (MC2009-35 and CP2009-54)
Priority Mail Contract 16 (MC2009-36 and CP2009-55)
Priority Mail Contract 17 (MC2009-37 and CP2009-56)
Priority Mail Contract 18 (MC2009-42 and CP2009-63)
Priority Mail Contract 19 (MC2010-1 and CP2010-1)
Priority Mail Contract 20 (MC2010-2 and CP2010-2)
Priority Mail Contract 21 (MC2010-3 and CP2010-3)
Priority Mail Contract 22 (MC2010-4 and CP2010-4)
Priority Mail Contract 23 (MC2010-9 and CP2010-9)
Outbound International
Direct Entry Parcels Contracts
Direct Entry Parcels 1 (MC2009-26 and CP2009-36)
Global Direct Contracts (MC2009-9, CP2009-10, and CP2009-11)
Global Expedited Package Services (GEPS) Contracts
GEPS 1 (CP2008-5, CP2008-11, CP2008-12, CP2008-13, CP2008-18, CP2008-19, CP2008-20, CP2008-21, CP2008-22, CP2008-23, and CP2008-24)
Global Expedited Package Services 2 (CP2009-50)
Global Plus Contracts
Global Plus 1 (CP2008-8, CP2008-46 and CP2009-47)
Global Plus 2 (MC2008-7, CP2008-48 and CP2008-49)
Inbound International
Inbound Direct Entry Contracts with Foreign Postal Administrations
Inbound Direct Entry Contracts with Foreign Postal Administrations (MC2008-6, CP2008-14 and MC2008-15)
Inbound Direct Entry Contracts with Foreign Postal Administrations 1 (MC2008-6 and CP2009-62)
International Business Reply Service Competitive Contract 1 (MC2009-14 and CP2009-20)
Competitive Product Descriptions
Express Mail
[Reserved for Group Description]
Express Mail
[Reserved for Product Description]
Outbound International Expedited Services
[Reserved for Product Description]
Inbound International Expedited Services
[Reserved for Product Description]
Priority
[Reserved for Product Description]
Priority Mail
[Reserved for Product Description]
Outbound Priority Mail International
[Reserved for Product Description]
Inbound Air Parcel Post
[Reserved for Product Description]
Parcel Select
[Reserved for Group Description]
Parcel Return Service
[Reserved for Group Description]
International
[Reserved for Group Description]
International Priority Airlift (IPA)
[Reserved for Product Description]
International Surface Airlift (ISAL)
[Reserved for Prduct Description]
International Direct Sacks—M-Bags
[Reserved for Product Description]
Global Customized Shipping Services
[Reserved for Product Description]
International Money Transfer Service
[Reserved for Product Description]
Inbound Surface Parcel Post (at non-UPU rates)
Start Printed Page 5241
[Reserved for Product Description]
International Ancillary Services
[Reserved for Product Description]
International Certificate of Mailing
[Reserved for Product Description]
International Registered Mail
[Reserved for Product Description]
International Return Receipt
[Reserved for Product Description]
International Restricted Delivery
[Reserved for Product Description]
International Insurance
[Reserved for Product Description]
Negotiated Service Agreements
[Reserved for Group Description]
Domestic
[Reserved for Product Description]
Outbound International
[Reserved for Group Description]
Part C—Glossary of Terms and Conditions [Reserved]
Part D—Country Price Lists for International Mail [Reserved]
End Appendix End Supplemental Information

Footnotes

1.  Request of United States Postal Service to Add Canada Post-United States Postal Service Contractual Bilateral Agreement for Inbound Market Dominant Services to the Market Dominant Product List, Notice of Type 2 Rate Adjustment, and Notice of Filing Agreement (Under Seal), November 19, 2009; and United States Postal Service Notice of Erratum to Application for Non-Public Treatment, November 20, 2009 (Request).

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2.  Type 2 rate adjustments involve negotiated service agreements. See 39 CFR 3010.5.

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3.  To elaborate, the Bilateral Agreement covers Letter Post, including letters, flats, packets, bags, containers, and International Registered Mail service ancillary thereto. Request at 3-4.

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4.  Attachment 1 to the Request.

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5.  Attachment 2 to the Request.

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6.  Attachment 3 to the Request.

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7.  Attachment 4 to the Request. The Postal Service filed United States Postal Service Notice of Erratum to Application for Non-Public Treatment, November 20, 2009 (Erratum). It explained that due to a drafting error, the application contained an erroneous reference to a nonexistent page of the Agreement and provided a corrected page.

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8.  The Postal Service maintains that the instant Bilateral Agreement is functionally comparable to the agreement in Docket Nos. MC2009-7 and R2009-1. Id.

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9.  The Postal Service included Xpresspost in its Request to Add Canada Post-United States Postal Service Contractual Bilateral Agreement for Inbound Competitive Services to the Competitive Product List. See Docket Nos. CP2010-13 and MC2010-14.

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10.  See PRC Order No. 346, Notice and Order Concerning Bilateral Agreement with Canada Post for Inbound Market Dominant Services, November 25, 2009 (Order No. 346).

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11.  See Notice of the United States Postal Service of Filing Responses to Chairman's Information Request No. 1, Questions 1-7 and 9-11, December 10, 2009.

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12.  See Notice of the United States Postal Service of Filing Response to Chairman's Information Request No. 1, Question 8, December 11, 2009. The Postal Service filed an accompanying Motion for Late Acceptance of Response to Chairman's Information Request No. 1, Question 8, December 11, 2009. The motion is granted.

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13.  See Public Representative Comments in Response to United States Postal Service Request to Add Canada Post-United States Postal Service Contractual Bilateral Agreement for Inbound Market Dominant Services to the Market Dominant Product List, Notice of Type 2 Rate Adjustment, and Notice of Filing Agreement (Under Seal), December 9, 2009 (Public Representative Comments).

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14.  The Postal Service notes that the arguments and assertions which were applicable in Docket Nos. MC2009-7 and R2009-1 have not changed on this point and incorporates those points by reference here. This includes the reference that under Canadian law, Canada Post has an exclusive privilege to carry outbound letters weighing less than 500 grams (17.64 ounces) and subsequently is the single entity that can enter into this type of agreement with the Postal Service.

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[FR Doc. 2010-2066 Filed 2-1-10; 8:45 am]

BILLING CODE 7710-FW-S