[Federal Register: January 15, 2009 (Volume 74, Number 10)]
[Notices]
[Page 2636-2637]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15ja09-145]
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POSTAL REGULATORY COMMISSION
[Docket No. MC2008-1 (Phase II); Order No. 168]
Review of Nonpostal Services
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
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SUMMARY: The Commission is establishing a docket to develop a complete
record on three matters that were not resolved in a recent docket. This
will allow the Postal Service and others an opportunity to present
their views prior to final Commission decision on the status of the
underlying services.
DATES: January 29, 2009: Deadline for the Postal Service and other
participants to file supporting evidence. February 10, 2009: Deadline
for new interventions. February 11, 2009: Prehearing conference will be
held on at 10 a.m. in the Commission's hearing room.
ADDRESSES: Submit filings electronically via the Commission's Filing
Online system at http://www.prc.gov.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel,
202-789-6820 and stephen.sharfman@prc.gov.
SUPPLEMENTARY INFORMATION: Regulatory History, 72 FR 73909 (December
28, 2007).
In Order No. 154, the Commission authorized 14 nonpostal services
to continue.\1\ Finding the record insufficient in certain respects,
the Commission deferred ruling on three issues more fully addressed
below, involving licensing, the warranty repair program, and sales of
music compact discs. This order establishes procedures to develop a
more complete record on these issues beginning with an opportunity for
the Postal Service to present its case on these issues and followed by
an opportunity for interested persons to respond.\2\
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\1\ PRC Order No. 154, Review of Nonpostal Services Under the
Postal Accountability and Enhancement Act, December 19, 2008 (Order
No. 154).
\2\ The Commission also indicated a separate docket would be
established to develop regulations applicable to authorized
nonpostal services. That docket will be initiated shortly.
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Licensing. In Order No. 154, the Commission generally authorized
the licensing of the Postal Service's intellectual property to continue
as a nonpostal service. Id. at 73. As an interim measure, however, the
Commission grandfathered the licenses of the Postal Service's brands on
products relating to the Postal Service's operations, categorized by
the Postal Service as Mailing & Shipping, pending the outcome of Phase
II. This issue was brought to the forefront late in the first phase of
this proceeding by Pitney Bowes upon learning that Postal Service-
branded postage meter ink cartridges were being sold.\3\ The Commission
found that the record on licenses related to Postal Service operations
to be insufficiently developed for it to determine whether those
licenses should be terminated or authorized to continue.\4\
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\3\ Pitney Bowes Inc. Motion to Compel United States Postal
Service to File a Complete List of Nonpostal Services, October 15,
2008. Pitney Bowes' motion, supported by pleadings responsive to the
matter, challenged the appropriateness of the Postal Service
licensing its trademark for products related to Postal Service
operations. See also PRC Order No. 126, Order Granting, In Part,
Pitney Bowes Inc. Motion to Compel, November 4, 2008.
\4\ Order No. 154 at 76. Order No. 154 directed the Postal
Service to ``promptly notify the Commission of any other such
licenses [that relate to postal operations] that may exist.'' Id.,
n.146. This order is not intended to modify that directive. The
Postal Service indicates five vendors are licensed to sell Mailing &
Shipping products bearing the Postal Service's intellectual
property. Initial Response of the United States Postal Service to
Order No. 74, June 9, 2008, at 22. See also Response of the United
States Postal Service to Order No. 126 Regarding Licensing
Agreements and Notice of Filing of Sworn Statement, November 17,
2008; and Errata to Response of the United States Postal Service to
Order No. 126 Regarding Licensing Agreements, November 19, 2008.
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Further proceedings in this Phase II are needed to develop a more
complete record regarding licensing programs for products related to
Postal Service operations generally, as well as the
[[Page 2637]]
specific meter ink cartridge license cited by Pitney Bowes. Other
related issues may also be explored.\5\ The Postal Service shall file a
sworn statement(s) by a knowledgeable individual(s) on or before
January 29, 2009, providing details of each Mailing & Shipping services
license and any additional information and evidence deemed relevant in
support of its continuing the commercial licensing of products related
to Postal Service operations.\6\ The sworn statement shall also address
the requirements of section 404(e)(3) of title 39. Interested persons,
including any licensees, who support continuing Postal Service branding
of such products may also submit relevant evidence by January 29, 2009.
Such sworn statements shall address the requirements of section
404(e)(3) of title 39 and may address any other matter deemed relevant
to issues before the Commission in this Phase II. As discussed below,
interested persons will be afforded an opportunity to respond to these
submissions.
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\5\ See Order No. 154 at 75, n.145. The relevant market and the
Postal Service's regulatory role in the production and distribution
of postage evidencing systems may be addressed.
\6\ Sworn statements submitted in Phase II are subject to the
Commission's Rules of Practice and Procedure. 39 CFR 3001.1 et seq.
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Warranty repair program. In Order No. 154, the Commission concluded
that the warranty repair program, under which the Postal Service is
compensated by the original equipment manufacturer (OEM) for repairs by
the Postal Service of the OEM's equipment still under warranty was,
with one possible exception, not subject to review under 39 U.S.C.
404(e). Id. at 84-85. The exception concerns plans (which may already
be implemented) by the Postal Service to expand the activity to other
customers of the OEM.\7\ Order No. 154 deferred a determination on this
issue to Phase II.
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\7\ Statement of Patrick R. Donahoe on Behalf of United States
Postal Service (Donahoe Statement), June 23, 2008, at 15. See also
Initial Response of the United States Postal Service to Order No.
74, June 9, 2008, at 28-29.
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Assuming it wishes to offer the expanded warranty repair service,
the Postal Service shall provide details of this service in the form of
a sworn statement(s) by a knowledgeable individual(s). The statement(s)
shall also identify the commencement date of such service, provide
annual revenues for fiscal years 2006 through 2008, address the
requirements of section 404(e) of title 39, and any other matter the
Postal Service believes is relevant to the issue before the Commission.
Interested persons who support the Postal Service providing such
services may also submit sworn statements by January 29, 2009, that
address any matter deemed relevant to issues before the Commission.
Sales of CDs. In Order No. 154, the Commission addressed the Postal
Service's proposal to classify greeting cards and other stationery
items as postal services. Order No. 154 at 34-35. While the Commission
found that greeting cards and stationery may be classified as a
competitive postal service, it expressed reservations about the sale of
compact discs (CDs) featuring various recording artists, specifically
noting that they ``are not authorized as `greeting cards'.'' Id. at 35.
Recognizing the scale of the Postal Service operations, the Commission
observed that details of certain activities may have been overlooked in
response to Order No. 74.\8\ Thus, the Commission suggested that the
Postal Service review its various retail programs and provide details
of any omissions, including those related to CD sales, for
consideration in Phase II of this proceeding.
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\8\ PRC Order No. 74, Order Granting Motion to Compel and
Revising the Procedural Schedule, April 29, 2008 (Order No. 74).
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To the extent it wishes to pursue this issue, the Postal Service
shall file by January 29, 2009, a sworn statement(s) by a knowledgeable
individual(s) which provides complete details of each retail program
for which information may have been inadvertently omitted in response
to Order No. 74 and which the Postal Service seeks to have classified
as a postal service or, alternatively, to continue to offer as a
nonpostal service. In either case, the Postal Service should provide
sufficient justification to support its proposed treatment, i.e., that
it may be appropriately classified as a postal service or,
alternatively, that it satisfies section 404(e)(3). In addition, the
Postal Service should also provide the commencement date of each
program (product or service) and the annual revenues for fiscal years
2006 through 2008. Interested persons who support the Postal Service
providing such services may also submit sworn statements by January 29,
2009, that address any matter deemed relevant to issues before the
Commission.
Prehearing conference and additional procedures. Phase II is
designed to provide the Postal Service and interested persons an
opportunity to present evidence and arguments in support of their
respective positions.\9\ Following the submission of the sworn
statements discussed above, the Commission will convene a prehearing
conference on February 11, 2009, to discuss the balance of the
procedural schedule. This shall include the need for hearings, the due
dates for responses to the statements due January 29, 2009, the
opportunity for rebuttal thereto, and briefing dates.
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\9\ The record already compiled in the first part of this
proceeding may be incorporated by reference or adopted as part of a
separate statement. If the Postal Service continues to rely upon the
information in that record, it shall be subject to written and oral
cross-examination in this Phase II proceeding.
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It is Ordered:
1. Docket No. MC2008-1, Phase II, is established to develop a more
complete record on the activities discussed in the body of this order
concerning Postal Service branding of Mailing & Shipping products, the
warranty repair program, the retail sale of recorded music, and any
other retail activities which, upon further consideration, may be
identified by the Postal Service for review in this proceeding.
2. The Commission will sit en banc in this proceeding.
3. The Postal Service and other participants that support
continuation of such services shall file supporting evidence as
provided in the body of this order on or before January 29, 2009.
4. Any interested persons may file a notice of intervention
pursuant to rule 20 or 20a of the Commission's Rules of Practice and
Procedure, 39 CFR 3001.20 and 3001.20a, no later than February 10,
2009. The notice shall state whether the intervenor requests a hearing.
Any person who submitted a filing in the initial phase of this
proceeding will be deemed to be a participant in Phase II and need not
submit a notice of intervention.
5. A prehearing conference will be held in the Commission's hearing
room on February 11, 2009, at 10 a.m., to establish dates, as
necessary, for the completion of discovery, need for hearings, filing
of rebuttal evidence, and other matters related to this proceeding as
set forth in the body of this order.
6. Robert Sidman is designated as Public Representative to
represent the interests of the general public in this proceeding.
7. The Secretary shall arrange for publication of this notice and
order in the Federal Register.
By the Commission.
Steven W. Williams,
Secretary.
[FR Doc. E9-771 Filed 1-14-09; 8:45 am]
BILLING CODE 7710-FW-P