In a 288-page order issued May 27, the Postal Regulatory Commission approved as filed the prices for market-dominant products that were proposed by the Postal Service on April 9. The commission also approved all proposed incentives and promotions and related classification changes as filed, except for the proposed new NCOA+ service. Charts reflecting the approved rates are at the end of this issue.
Citing the applicable regulations and statutes, the PRC stated its official conclusion:
“The Commission concludes that the planned price adjustments, as described in the body of this Order, are consistent with the regulations of 39 CFR part 3030 and applicable Commission directives and orders. The planned price adjustments are also consistent with the pricing requirements appearing in 39 USC § 3626 and do not implicate the pricing requirements appearing in 39 USC §§ 3627 and 3629. The Commission’s regulations state plainly that ‘f the planned rate adjustments are found consistent with applicable law, they may take effect.’ With the exception of concerns regarding the proposed introduction of a new National Change of Address (NCOA) service … the Commission also concludes that the planned classification changes, with the revisions described in the body of this Order, may take effect as planned. All changes to the Mail Classification Schedule (MCS) resulting from this proceeding appear in the Attachment following the signature line of this Order.”
After listing the contents of the order, the commission devoted the remainder of the first 139 pages to a detailed review of the Postal Service’s proposed price and classification changes; the comments received on each; the commission’s analysis of the USPS position and those of the commenters; and, for each, its conclusion and decision. As the PRC stated, above, the final 149 pages were devoted to the specific revisions to the Mail Classification Schedule needed to reflect the approved prices and classification changes.
Interestingly, the PRC noted early in the order that
“Although the price adjustments proposed in this proceeding are consistent with applicable law and the Commission has no legal basis to reject the proposed changes, the Commission remains concerned about the substantial declines in Market Dominant volumes, overall service performance for Market Dominant products, and the Postal Service’s overall financial situation, issues that have all remained significant, if not worsened, since the current Market Dominant ratemaking system went into effect.”
The only aspect of the Postal Service’s April 9 filing that was not approved was the proposal for NCOA+. The PRC based its decision on the short time frame allowed to review the proposal and, perhaps more importantly, the competitive nature of the service as noted by commenters.
“In Market Dominant rate adjustment proceedings (including those like the instant proceeding that cover thousands of rate cells across the five mail classes), the Commission conducts an expedited review, allowing 30 days for public comment. … The Commission then has just 21 days from the day comments are filed to issue a final order determining ‘whether the planned rate adjustments are consistent with applicable law’ … . The focus of these expedited proceedings has been, and remains, review of the proposed price adjustments for consistency with applicable law.
“In this proceeding, the Postal Service proposes to add a new NCOA+ service and provides a one-paragraph description of the new service in the Notice. … Commenters raise a host of concerns about the introduction of the NCOA+ service, and in particular, assert that introduction of the service could violate 39 USC § 404a because the Postal Service is ‘establish[ing a] rule or regulation (including any standard) the effect of which is to preclude competition or establish the terms of competition’ while also ‘creat[ing] an unfair competitive advantage for itself[.]’
“In light of the comments received, the Commission finds that the proposed addition of NCOA+ is the type of classification change that given the issues raised and the record before the Commission cannot be appropriately vetted during an expedited rate adjustment proceeding. In particular, the 21-day period between the comment deadline and order issuance does not provide the Commission adequate time to vet the new service and the allegations that its introduction will violate 39 USC § 404a. The Commission notes that 39 USC § 404a is not among the statutory provisions typically implicated or assessed in Market Dominant rate adjustment proceedings. … Thus, the Commission is unable to approve the introduction of NCOA+ in this proceeding….”
The PRC added that the USPS can file separately for approval of NCOA+ but would need to prove that the service is neither discriminatory nor unfairly competitive.