Alliance Alert 5-28-26

The Postal Regulatory Commission (PRC) has issued its decision on the USPS proposed price changes to take effect July 12, 2026.  The PRC approved the USPS’ proposed changes with the exception of the USPS’ proposed new National Change of Address (NCOA) service.

“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 PRC said, “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 PRC said it was in “response to these conditions,” that it opened the ongoing procedure to review the ratemaking system.

PRC Says it Does Not Have Authority to Pause Price Change.  The Alliance in its comments on the USPS proposed Market Dominant price changes had asserted that all price changes should be paused until the PRC completes its review of the ratemaking system, particularly because the PRC has determined that the system is not achieving the objectives of the law.  The Alliance said that “it would be poor policy and an abdication of regulatory responsibility to allow the Postal Service to continue harming captive mailers through price increases significantly above CPI using a flawed rate-making system that the Commission has determined violates Congress’ objectives.” The Alliance argued that if the PRC has the authority to redesign the ratemaking system and to limit the USPS to one annual price increase for Market Dominant products, then the PRC also has “the authority to pause price increases until it completes its rate-making system review.” ANM said the PRC’s failure to do so “is at best . . . in tension with, and at worst is a clear violation of, its role to protect monopoly users of the mail.”  It said that not pausing the price increases is contrary to the PRC’s mission, as the magnitude of recent price increases has harmed nonprofits and rural and low-income Americans. 

The PRC responded to the concerns raised by the Alliance and others “are, by law, not addressable in this proceeding.”  “Although Docket No. RM2024-4, rather than this proceeding, is the appropriate forum to address the issues raised by commenters,” the PRC said, it reiterated “its ongoing concerns with the Postal Service’s proposed rate increases and other evident challenges facing the postal sector.”  “As the Commission raised when it opened Docket No. RM2024-4,” it said, “Market Dominant mail volume has declined substantially, service performance has remained an issue, and the Postal Service’s financial situation has failed to improve as net losses have increased since the modified Market Dominant ratemaking system went into effect.”  “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 these issues and is continuing to review these issues in Docket No. RM2024-4,” it stated.

“With respect to ANM’s and EMA’s suggestion that the Commission pause Market Dominant price increases during the pendency of Docket No. RM2024-4,” the PRC said, “the Commission declines to adopt this suggestion because it has no statutory or regulatory basis to do so.”  “As the Commission previously explained,” it said, “its review in this proceeding is limited to ensuring the proposed prices comply with the requirements of 39 C.F.R. part 3030, Commission directives and orders, and 39 U.S.C. §§ 3626, 3627, and 3629, which, as the Commission finds in this Order, the proposed price adjustments do.”  The PRC said it “does not have ‘authority’ as ANM suggests to pause proposed price increases that are consistent with applicable law.”

Periodicals Price and Structural Changes.  The PRC, despite extensive comments submitted by the Alliance concerning the magnitude of the USPS’ proposed price changes on nonprofit Periodicals mailers, offered little analysis or guidance.  “No commenter disputes that the proposed price adjustments comply with the price cap,” the PRC stated.  “Because the prices for both In-County and Outside County are increasing as a result of this proceeding,” it said, “the proposed prices comply with 39 C.F.R. § 3030.127(b).”   “The Commission recommends that the Postal Service continue to explore pricing strategies aimed at improving the cost coverage of the Periodicals class,” it said in reference to the additional rate authority assessed on Periodicals for being non-compensatory.

The Alliance in its comments had expressed concerns that many of its members are reporting that under the new Outside County price structure they will experience significant price increases, particularly for lighter weight pieces paying per piece rates.  ANM also noted that the new price structure “reverses the incentives for mailer behavior, going from a structure that assesses additional charges for every bundle and container to one that offers delivery sort and container discounts.” It stated that “these changes will force Outside County Periodicals mailers to totally reassess and change their mail preparation and entry behaviors.” The Alliance said that it is “mystifying” that despite increases in workshare discounts, new workshare discounts, and increases in incentives, “the net price increases being seen by some [ANM] members are still in the double digits.”

The Alliance had requested that, if the USPS’ price cap calculations for the new Periodicals price structure are accurate, that the USPS and PRC “consider a phasing in of the new price structure in a manner that does not result in double digit price increases being implemented at one time because the impact on these mailers will be catastrophic . . . .” ANM asserted that because the increases individual mailers are facing exceed the 6.8 percent increase forecasted by the Postal Service, “nonprofit Periodicals mailers have not budgeted for the double-digit increases they likely are facing.”  

The PRC said it “has confirmed that the proposed price adjustments under the new rate structure are within the price cap limitation of 6.803 percent for Periodicals.” “As the Commission has previously observed,” it said, “under the ratemaking system, pricing design, including the ability to raise some prices while decreasing others, is within the scope of the Postal Service’s pricing flexibility as long as the proposed prices are consistent with applicable law.”  It noted that “the fact that some rate cells will experience higher increases than others is permitted by the class-level application of the price cap, which allows the Postal Service pricing flexibility to vary the size of rate changes at the class, product, and rate cell levels.”  The PRC reiterated that its review in this proceeding “is limited to ensuring the proposed prices comply with the requirements of 39 C.F.R. part 3030, Commission directives and orders, and 39 U.S.C. §§ 3626, 3627, and 3629, which the proposed price adjustments for Periodicals do.” 

“Nevertheless,” the PRC said, “the Commission acknowledges commenter concerns that certain mailers may be particularly negatively impacted by the proposed price adjustments and implementation of the new rate structure for Outside County Periodicals.  “The Commission encourages the Postal Service to consider the concerns raised by commenters when exercising its pricing flexibility in future price adjustment proceedings,” it said.

“In response to ANM’s request that the Postal Service and the Commission consider phasing in the new price structure,” the PRC said,  “the Commission notes that where proposed price adjustments are consistent with applicable law, the Commission’s rules do not allow for it to mandate phasing in price adjustments.”  “The Postal Service should consider whether it would be appropriate to phase in these price increases given the commenters’ concerns,” it said, “and should notify the Commission promptly if it would like to propose doing so.”

“With respect to ANM’s assertion that there are categories within Periodicals that it believes are compensatory and should not be penalized by the additional 2 percentage points of rate authority,” the PRC said, “the Commission notes that rate authority is granted and applied at the class level and that the Commission generally assesses compensatory status at the class and product level.”  “Nevertheless, the Commission encourages the Postal Service to consider whether there are compensatory categories within Periodicals as ANM suggests and, if so, to exercise its pricing flexibility to encourage the use of these compensatory price categories,” it said.

USPS Proposed National Change of Address Service.  Several mailing industry groups had opposed the new National Change of Address (NCOA) service proposed by the USPS, asserting – among other concerns – that it violates 39 U.S.C. 404a by creating an unfair USPS competitive advantage.  The PRC said the required timeline between comments and decision does not allow it to appropriately vet this type of mail classification change and that changes such as these are not typically included in a Market Dominant price change request.  Accordingly, the PRC did not approve the new NCOA service, and said that if the USPS desires to re-propose the introduction of the service, in should do so in an appropriate proceeding, and should include a “thorough and detailed explanation of the new service.”

Promotions and Incentives.  The PRC approved the USPS’ proposed Promotions and Incentives for 2027, including the increase in the Full-Service IMb and Seamless Acceptance incentives for Periodicals.

The full PRC decision can be found here:  https://prc.arkcase.com/portal/filings/140081