Postal Regulatory Commission Proceedings

Operating under its statutory authority, the Postal Service filed cases with the PRC that modified the pricing and classification of products and services, established mailing and shipping services contracts for domestic and international mail, and described market tests of experimental products. The Postal Service also participated in PRC rulemaking proceedings, rate or service complaint cases, and other dockets, and submitted required reports, documents, rulemakings and studies.

This section summarizes the most significant cases, which can be viewed in detail at


R2010-1, Notice of Price Adjustment and Classification Changes Related to Move Update Assessments. Established a Move Update assessment charge of 7 cents for First-Class Mail and Standard Mail pieces that are not updated for Change of Address orders, subject to a tolerance of 30 percent. Effective January 4, 2010.

R2010-2, Market Dominant Product Prices Canada Post-United States Postal Service Contractual Bilateral Agreement for Inbound Market Dominant Services (MC2010-12) Negotiated Service Agreement. Established prices for inbound letter post items tendered by Canada Post. Effective January 1, 2010.

R2010-3, Notice of Price Adjustment for Standard Mail Incentive Pricing Program (“Summer Sale 2010”). A temporary price reduction was implemented on incremental volume for Standard Mail letters and flats from July 1 through September 30, similar to the initial “Summer Sale.” This initiative sought to promote new volume growth during the low-volume summer months while using excess processing capacity and decreasing the effects of the recession. The incentive gave eligible mailers a 30 percent rebate on Standard Mail volume above a predetermined threshold equal to 5 percent over the amount the mailer sent during the same period last year.

R2010-4, Rate Adjustment Due to Extraordinary or Exceptional Circumstances. Filed in accordance with 39 U.S.C. § 3622(d)(1)(E), this case sought price changes exceeding the Consumer Price Index cap. The PRC rejected the proposals based on its determination that while the recent recession was an extraordinary or exceptional circumstance, the Postal Service did not establish that the revenue shortfall to be recovered through the price increases was “due to” the economic recession. The Postal Service has appealed the PRC’s order to the U.S. Court of Appeals.

R2010-5, Market Dominant Product Prices Strategic Bilateral Agreement Between United States Postal Service and Koninklijke TNT Post BV and TNT Post Pakketservice Benelux BV (MC2010-35) Negotiated Service Agreement. Established prices for inbound letters tendered by the Netherlands postal operator. Effective October 1, 2010.

R2010-6, Market Dominant Product Prices China Post Group - United States Postal Service Letter Post Bilateral Agreement (MC2010-35) Negotiated Service Agreement. Established prices for letters tendered by China Post Group. Effective October 1, 2010.


CP2010-10, et seq., Various Domestic and International Competitive Negotiated Service Agreements. The Postal Service sought to add numerous types of competitive negotiated service agreements (NSAs) to the list of competitive products, and filed the following with the PRC:



Number of Contracts


Express Mail


Priority Mail



Canada Post Bilateral - Competitive


Global Direct


Global Expedited Package Services


Global Plus 1 & 2


Global Reseller Expedited Package


Inbound Competitive Multiproduct Agreements with Foreign Posts


Inbound EMS


International Business Reply Service


CP2010-8, Competitive Products Price Changes. In November 2009, the Postal Service gave notice of changes in rates of general applicability and of classification changes for competitive products including Express Mail, Priority Mail, Parcel Select, Priority Mail International, GXG, and Express Mail International. Effective January 4, 2010.

CP2010-11, Establishment of Prices and Classifications for Inbound Air Parcel Post at UPU Rates. The Governors established inward land rates for competitive inbound air parcels tendered by foreign posts based on the outcome of the Universal Postal Union (UPU) rate-setting process. This decision, filed for PRC review, authorizes management to annually file with the PRC inward land rates resulting from UPU Rates formulas.

CP2010-72, Competitive Product Prices Global Expedited Package Service Contracts Non-Published Rates. This would establish minimum and maximum prices for Global Expedited Package Service agreements, and avert the need for separate filings of each NSA since the minimum and maximum prices by cell would be predetermined. At the end of FY 2010, this is pending before the PRC.


MT2010-1, Experimental Product Samples Showcase. Consumer packaged goods companies (CPGs) often give consumers trial-size samples of their products as a way to build brand awareness. While sample distribution is a large and growing industry, the Postal Service’s “shape and weight” pricing structure makes the mailing of samples expensive. Accordingly, CPGs tend to use less expensive sample distribution methods, such as grocery store distribution and bundling with newspapers. To gain information on operations, costs and potential market, the Postal Service conducted a market test in May 2010 of a parcel box containing an assortment of product samples from multiple CPGs mailed to the companies’ target consumers; the CPGs shared the cost of postage rather than paying it individually.


MC2009-19, Modification of Mail Classification Schedule Product Lists in Response to Order No. 154. During 2010 the PRC added classification language to the Mail Classification Schedule (MCS) for Address Enhancement Services, Address Management Services, and Stamp Fulfillment Services.

MC2010-20, Transferring Selected Post Office Box Service Locations to the Competitive Product List. Transferred to the competitive product list. Post Office Box service for 49 Post Office locations within one-half mile of a private competitor. Effective June 17, 2010.

MC2010-22, Modification of Mail Classification Schedule Regarding Forever Stamps. Modified the MCS to allow more than one design for Forever stamps. Effective May 6, 2010.

MC2010-33, Minor Classification Changes Related to Canada PostUnited States Postal Service Contractual Bilateral Agreement for Inbound Competitive Services. The Postal Service filed notice of a minor classification change concerning the Bilateral Agreement, proposing that inbound surface parcels tendered by Canada Post would be handled as Priority Mail and subject to the rates for Xpresspost merchandise established in this Agreement. Effective August 23, 2010.


RM2009-3, Consideration of Workshare Discount Rate Design. This rulemaking concerned a provision of the law — 39 U.S.C. § 3622(e) — that limits workshare discounts to the costs avoided by worksharing. The PRC’s final rule, issued in September 2010, concluded, among other things, that this pricing constraint on workshare discounts: may apply within or across products, implements a substantial portion of the policies that underlie the Efficient Component Pricing rule, and requires the identification, within a market of mail that is distinguished from other mail predominantly by avoided costs due to worksharing activity. The PRC also concluded that the selection of an appropriate base or reference group from which to calculate the costs avoided by worksharing depends on which of the base group’s components are likely to shift to the workshared group in response to changes in their relative prices. The PRC further concluded that there is a worksharing relationship between presort First-Class Mail and Single-Piece First-Class Mail that is metered or bears Information-Based Indicia, and that the worksharing provision does not apply to Standard Saturation Mail because it serves a unique market.

RM2009-11, Periodic Reporting of Service Performance Measurements and Customer Satisfaction. This concerned the PRC’s rules for reporting service performance measurement and customer satisfaction survey results, which followed earlier proceedings aimed at developing modern service standards for market dominant products, as required by the Postal Act. The Postal Service was instrumental in helping craft feasible and transparent rules issued by the PRC in May 2010.

RM2009-12, Regulations Establishing Procedures for Obtaining Information from the Postal Service. This rulemaking concerned implementation of rules governing the PRC’s subpoena authority. The Postal Service offered suggestions to clarify the proposed rules, the final version of which was issued by the PRC in April 2010.

RM2010-1, Request to Initiate a Proceeding to Consider a Proposed Change in Analytic Principles. The Postal Service requested in October 2009 that the PRC consider a proposal involving the use of updated density factors for the purpose of distributing certain transportation and vehicle service driver costs to products. The PRC accepted the proposal in January 2010.

RM2010-2, Order Revising Rule for Service of Complaints. The PRC adopted a direct final rule to change the email address that complainants must use to serve their complaints on the Postal Service:

RM2010-3, Request for Authorization to Utilize Pro Forma Accounting Data in Periodic Reporting. In October 2009 the Postal Service sought the PRC’s authorization to rely on pro forma portions of audited financial statements consistent with the retroactivity provision in the Postal Act, for the purpose of preparing 2009 and 2010 periodic reports, as well as preparing filings in other dockets in which reliance on those pro forma statements is necessary. A month later, the PRC dismissed the petition as moot after being informed by the Postal Service that the concern underlying the request was no longer pertinent.

RM2010-4, Request to Initiate a Proceeding to Consider a Proposed Change in Analytic Principles. In October 2009 the Postal Service asked the PRC to consider four proposals to improve analytic principles relating to periodic reports. Proposals sought to: remedy a previously undetected inconsistency in the treatment of window service costs with respect to international versus domestic money orders; streamline the presentation of the unit cost detail chart filed as part of USPS-FY08-30; adopt an estimation of the incremental costs of competitive products, and modify the Flats Costs Models previously presented in USPS-FY08-12. In January 2010, the PRC accepted all proposed changes with the exception of certain modifications described in the body of the Order that pertained to one of the proposals.

RM2010-5, Request to Initiate a Proceeding to Consider a Proposed Change in Analytic Principles. In December 2009, the Postal Service requested that the PRC consider three proposals to improve analytic principles relating to the periodic reports. The proposals, all of which were accepted by the PRC in January 2010, included: a change in the methodology used by the Revenue, Pieces, and Weight (RPW) system to generate estimates for Alaska Bypass mail; a change to the methodology used for estimation of the CSBCS productivity, and an advance notification that the 2009 ACR would not include any Single-Piece Parcel Post models.

RM2010-6, Request to Initiate a Proceeding to Consider a Proposed Change in Analytic Principles; and RM2010-7, Request to Initiate a Proceeding to Consider a Proposed Change in Analytic Principles. In January 2010, the PRC accepted the proposals made by the Postal Service in December 2009 to initiate proceedings to consider a change in the Flats Costs Models for Periodicals and adjustment of 2009 Quarter 4 Parcel Select billing determinants used in cost models (RM 2010-7).

RM2010-8, Request to Initiate a Proceeding to Consider a Proposed Change in Analytic Principles. In February 2010, the Postal Service asked the PRC to authorize elimination of the rail portion of TRACS sampling and instead to distribute rail costs using the Inter-BMC highway distribution factors. The PRC accepted the proposal with modifications, and ordered the Postal Service to use the 2009 Freight Rail distribution key to distribute the costs of freight rail to products in 2010 and subsequent reporting years.

RM2010-9, Estimating Volume Changes from Pricing Incentive Programs. The Postal Service conducted three pricing incentive programs in the past year to generate new volume and additional revenue. Rebates were offered to mailers who mailed more pieces than they would have without rebates. Each pricing incentive program proposed or used various methodologies to estimate its profitability. In June 2010, the PRC initiated a proceeding to investigate these methodologies for estimating volume changes due to pricing incentive programs. Upon consideration of all the methodologies proposed, and if a change in analytical principles is warranted, the PRC may propose the adoption of a specific methodology. The case is active.

RM2010-10, Request to Initiate a Proceeding to Consider a Proposed Change in Analytic Principles. In June 2010, the Postal Service requested that the PRC initiate a proceeding to consider a proposal seeking a 20 percent reduction in the ODIS-RPW sample size and allocation of 10 percent of the ODIS-RPW sample size to a special study using an alternative sampling frame. The case is active.

RM2010-11, Semi-Permanent Exceptions from Periodic Reporting of Service Performance Measurement. This rulemaking concerned the Postal Service’s request for semi-permanent exceptions from reporting the service performance of 32 market dominant products and product components. In September 2010, the PRC approved the request as to 27 products and product components, primarily covering market dominant ancillary services, and confirmed that separate measurement is not necessary for another two products.

RM2010-12, Request to Initiate a Proceeding to Consider a Proposed Change in Analytic Principles. The Postal Service requested in September 2010 that the PRC initiate a proceeding to consider six proposals to change analytic principles relating to periodic reports. The proposals included: assigning relevant costs for direct bundles to products that utilize them (related to City Carrier costs); assigning IOCS acceptance costs to the host mailpiece when a piece is accepted at the window, has non-retail indicia, and hosts an Extra Service (other than Registered Mail); utilizing more detailed information regarding collected prepaid parcels that the Rural Carrier Cost System is capturing; changing the calculation procedures (involving ICRA); introducing a mailflow-based model of processing costs for Standard Parcels and NFMs (Not Flat Machinables), and improving the distribution key for empty equipment. The case is active.

RM2010-13, Consideration of Technical Methods to Be Applied in Workshare Discount Design. The PRC initiated this rulemaking (related to RM2009-3) to solicit comments on the appropriate base group for measuring First-Class Mail workshare discounts, the specific cost characteristics that the base category selected should have, and technical proposals to revise or refine the manner in which avoided costs are modeled. The case is active.

RM2010-14, Semi-Permanent Exceptions From Periodic Reporting Of Service Performance Measurement. This rulemaking, pending before the PRC at the end of FY 2010, concerns the Postal Service’s request for a semi-permanent exception from reporting on service performance for Applications and Mailing Permits.


C2009-1, Complaint of GameFly, Inc. The mailer of two-ounce First-Class Mail flat shaped pieces who initiated this case in April 2009 claimed to face undue discrimination by the Postal Service compared to Netflix, a mailer of one-ounce First-Class Mail letters. This proceeding remained active.

C2010-1, Complaint of Personal Assistance Service Council. The Commission docketed in December 2009 the complaint of Personal Assistance Service Council (PASC, a public authority chartered by the Los Angeles County Board of Supervisors). The complaint alleged that the Postal Service improperly denied PASC’s application to mail at Nonprofit Standard Mail rates on the basis that PASC is a government entity that receives taxpayer funds. The Postal Service filed an unopposed motion to dismiss PASC’s complaint for failing to comply with the regulatory requirements of these proceedings. The PRC quickly granted the Postal Service’s motion and dismissed PASC’s complaint without prejudice.

C2010-2, Complaint of Lance McDermott. In May 2010, the PRC docketed the complaint of Lance P. McDermott, which alleged that the Postal Service was planning to close the Seattle-Queen Anne Station without following procedures in 39 USC 404(d). The Postal Service sought dismissal on grounds that no decision had been made concerning retail operations at the station. The PRC granted the motion to dismiss in June.


N2010-1, Request for an Advisory Opinion on Six-Day to Five-Day Street Delivery and Related Service Changes. This request, filed on March 30, 2010, seeks a nonbinding advisory opinion regarding plans to eliminate the regular delivery of mail to street addresses on Saturdays and implement related service changes. Testimony of 11 witnesses, including 5 executive officers of the Postal Service, accompanied the filing. Hearings on the evidence submitted by the Postal Service were held in July 2010, following a series of field hearings in May and June during which the PRC heard from mail senders and recipients, postal union representatives, and members of the public, in eight locations. Additional evidentiary hearings were held in September and October 2010. The PRC’s advisory opinion is expected in early FY 2011.

PI2010-1, Investigation of Suspended Post Offices. The PRC initiated this case to investigate allegations that the Postal Service was suspending operations in Post Offices instead of following the administrative procedures prescribed by law for closing or consolidating Post Offices. Apart from the filing of periodic reports, this docket has been dormant since April 2010.

PI2010-2, PAEA Section 802(c) Request. The Postal Service requested that the PRC invoke its authority to engage the services of an actuary to review a matter previously reviewed by the Office of Personnel Management (OPM) and the Postal Service’s Office of the Inspector General (USPSOIG) regarding the Postal Service’s overpayment of its Civil Service Retirement System liabilities. The PRC responded to the request. An actuary reviewed the overpayment and provided a report with recommendations.

PI2010-3, Public Inquiry Concerning Procedures for Rate Cases Under Part 3010, Subpart E. This proceeding (which preceded the exigent filing, R2010-4) provided all interested parties an opportunity to explore and discuss procedural considerations unique to exigent rate cases before the first such case was filed.

A2010-1 through A2010-6, Post Office Closing or Consolidation Appeals: The PRC docketed six Post Office closing or consolidation appeals, four of which are concluded. Of the four, one involving the suspension rather than discontinuance of operations was effectively swept into a related docket with a directive to file monthly progress reports on the subsequent discontinuance study. Two appeals were dismissed by the PRC because they involved stations or branches, not Post Offices. The fourth matter involved a Post Office that had been formally discontinued more than a year before an appeal was attempted, making it untimely; the PRC dismissed it.

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