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Chapter 1
Compliance with Statutory Policies

Prior to filing its Request, the Postal Service began efforts to obtain a settlement agreement by consulting potential participants. Only one participant other than the Postal Service filed a direct case providing alternative proposals. As of September 2005, 35 of the active parties agreed to support the Postal Service's proposals; an additional five participants did not oppose the proposals. Only two participants opposed the settlement on general grounds. Two individual participants opposed very specific elements of fees related to two special services.

The PRC issued its Recommended Decision on November 1, 2005. While the PRC did not recommend a 5.4 percent across-the-board increase for all rate-classes, the majority of the recommended rate increases fall within that range. On November 14, 2005, the Postal Service Governors voted to accept the PRC's Opinion and Recommended Decision, with the new rates effective January 8, 2006.

2. Experimental Premium Forwarding Service:
Docket No. MC2005-1

On November 19, 2004, the Postal Service filed a request with the Postal Rate Commission seeking approval of a 2-year, experimental Premium Forwarding Service (PFS). PFS was designed to meet the needs of customers who establish temporary residences and would like their mail sent to them there. PFS sends all of a customer's mail, generally through a weekly Priority Mail shipment, to a temporary address from 2 weeks up to 1 year. The service was proposed as an experiment to gather information about demand, operations, and the average weight and zone of weekly shipments. An unopposed Stipulation and Agreement settling the case was filed with the PRC. On April 15, 2005, the PRC issued an Opinion and Recommended Decision based on the settlement agreement, which the Governors approved on May 12, 2005. PFS was implemented on August 7, 2005.

3. Rate and Service Changes to Implement Functionally Equivalent Negotiated Service Agreement with HSBC North America Holdings Inc.:
Docket No. MC2005-2

On February 23, 2005, the Postal Service filed a request with the PRC seeking an Opinion and Recommended Decision on rate and classification changes designed to implement a negotiated service agreement (NSA) with HSBC North America Holdings Inc. (HSBC). An NSA is a contract between the Postal Service and a customer which provides for rates and classifications that are unique to that customer. This filing was the third case seeking approval of a "functionally equivalent" NSA related to the baseline Capital One NSA.

After the request was filed, five parties intervened. The PRC issued its Opinion and Recommended Decision to the Governors on May 20, and the Governors approved the NSA on June 14. Implementation is scheduled for January 1, 2006.

4. Experimental Priority Mail Flat-Rate Box:
Docket No. MC2004-2

On June 3, 2004, the Postal Service filed a request for an Opinion and Recommended Decision on a 2-year experimental classification establishing a Priority Mail flat-rate box rate. Priority Mail users are able to mail items using either of two Postal Service-supplied boxes for a flat-rate, regardless of weight or distance to destination. The flat-rate is $8.10 as of January 8, 2006.

All but two of the case participants entered into a settlement agreement. The PRC issued an Opinion and Recommended Decision on October 6, 2004, recommending the Postal Service's proposal. The Board of Governors approved the proposal on October 27, 2004, and the rates and classification were implemented on November 20, 2004.

5. Rate and Service Changes to Implement Functionally Equivalent Negotiated Service Agreement with Bank One Corporation:
Docket No. MC2004-3

On June 21, 2004, the Postal Service filed a request with the PRC seeking a Recommendation on rate and classification changes designed to implement a 3-year NSA between the Postal Service and Bank One Corporation (Bank One). The PRC considered the Bank One NSA request under its rules for NSAs which are functionally equivalent or structured similarly to that of an already existing NSA. Volume thresholds and other specifics may be revised to reflect the specific circumstances of the new customer. The Bank One NSA was proposed as functionally equivalent to the baseline NSA with Capital One, previously approved. The PRC issued an Opinion and Recommended Decision on December 17, 2004. On February 16, 2005, the Governors issued their decision, which allowed under protest the recommended rate and fee changes, but returned the Opinion and Recommended Decision to the PRC for reconsideration. Implementation occurred on April 1, 2005.

On May 16, 2005, the Postal Service filed a Memorandum on Reconsideration which included three declarations discussing pertinent factual issues. On August 23, 2005, the PRC issued Order No. 1443 in which it declined to reopen the record to consider the declarations and requested comments on reconsideration based upon the existing record. On September 14, 2005, JP Morgan Chase & Co., a successor company to Bank One, petitioned the PRC to reopen the record.

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