USPS proposal to set scope of 10-year review denied–April 19, 2016

Even before its customers could experience the return to inflation-capped postage prices starting April 10, the Postal Service reminded them that it intends to continue trying to eliminate the cap through the 10-year regulatory review. On April 7, the USPS petitioned the Postal Regulatory Commission to start a “rulemaking” process over eight months before the 10-year anniversary of the December 20, 2006 law.

Primarily, the USPS wants to ensure that the CPI cap is within the scope of the regulatory review:

The Postal Service requests that the Commission promptly initiate a rulemaking proceeding to clarify the scope of its forthcoming review of the market-dominant regulatory system under 39 U.S.C. § 3622(d)(3). That review covers “the system for regulating rates and classes for market-dominant products established under this section [i.e., Section 3622],” and contemplates a process by which (1) the Commission must determine whether the existing “system” is achieving the statutory objectives, taking into account the statutory factors, and (2) if the Commission concludes that the existing “system” is not doing so, must modify the system or adopt an alternative system “as necessary to achieve the objectives.” The Commission is to conduct the review “[t]en years after the date of enactment of the Postal Accountability and Enhancement Act” (PAEA), meaning that the review proceeding must begin in December 2016.

The PRC denied the request on April 12 because it first must determine whether the current system is doing the job well enough before it initiates a second proceeding on how to change it. Discussing the scope of potential change would be premature before the PRC determines whether it needs to change or not:

1. CONCLUSION

The Commission finds the Postal Service’s Petition is premature and holds it in abeyance until after the 10-year review docket has been established. The Commission is familiar with and sensitive to the issues the Postal Service raises in its Petition concerning the 10-year review. As a result, the Commission intends to inform the public about its plans for the 10-year review (including proposed scheduling and opportunities for public comment) in advance of December 20, 2016, after which the review will begin.

1. ORDERING PARAGRAPH

The Postal Service’s Petition for a rulemaking is held in abeyance until after the Commission establishes the 10-year review docket after December 20, 2016, and the Commission determines it is appropriate or necessary to define its authority.

Contemporaneously with the PRC posting of its decision on April 12, without having read the PRC decision, the Alliance and its mailer allies filed our own response to the USPS petition and recommended it be denied for essentially the same reasons the PRC reached that decision.

We appreciate the PRC decision to wait until the December 20, 2016 10-year anniversary, and to begin with an appraisal of whether the current system is performing adequately before starting to define the scope of potential changes. Carefully following the specific requirements of the law will lead to superior and lasting results.