32 comments received on new postal law: PRC's Blair

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The Postal Regulatory Commission to date has received comments from 32 parties about the Postal Accountability and Enhancement Act.

The PRC has asked mailers for their input as it begins developing and implementing a modern system of rate regulation now that the postal reform bill has been signed into law.

"The commission is now fully engaged in implementing the strengthened regulatory functions assigned by the PAEA," said Dan Blair, chairman of the PRC, who spoke on April 17 before the House Subcommittee on Federal Workforce, Postal Service and the District of Columbia. "This effort involves completing pending business under previous law, as well as developing an organization adapted to the commission's new responsibilities."

A critical requirement the PAEA assigns to the PRC is the establishment of a modern system for regulating rates and classes of market-dominant postal products, Mr. Blair said.

As a result, the PRC published an Advance Notice of Proposed Rulemaking on Jan. 30, soliciting comments on how the PRC can best fulfill its responsibilities and achieve the objectives of the PAEA. The initial round of comments was due April 6 and reply comments are due May 7.

The postal legislation enacted Dec. 20, 2006, strengthens the authority of the renamed PRC and changes the form of regulatory oversight in many ways. In addition, it grants the Postal Service more autonomy in setting rates, particularly for its competitive products.

However, the Postal Service's ability to increase rates for market-dominant products is limited by changes in the U.S. Consumer Price Index. Moreover, the legislation streamlines the Postal Service's ability to introduce new postal products.

The PAEA also directs the USPS, in consultation with the PRC, to establish service standards for market-dominant products. It assigns regulatory oversight to the commission. The legislation also directs the USPS and the PRC to consult on developing a plan for meeting these standards, including any necessary changes to the Postal Service's processing, transportation, delivery and retail networks.

"Consequently, we will revisit these infrastructure issues in the context of service standards to be established under the PAEA," Mr. Blair said. He said that the PRC appreciate the opportunity for PRC personnel to observe meetings of the Mailers Technical Advisory Committee to become better informed on mailers' views of their service needs.

"We look forward to full consultation with the Postal Service, as envisioned by the act, later this spring and summer," he said.

The PRC is also advancing toward performance of its auditing and reporting responsibilities under the PAEA. In the next two years, the responsibilities will require the following essential actions.

-- A review and report examining universal Postal Service and the postal monopoly in all regions of the United States, including an assessment of likely future needs and recommended changes.

--A review of all non-postal products offered by the Postal Service, followed by a determination whether each of them should continue, based on an assessment of public need for the service and the private sector's ability to meet any such need.

-- Annual notice-and-comment proceedings followed by commission determinations on whether any rates, fees and service standards failed to comply with applicable requirements during the preceding year.

--A report to the president and to the Congress on the first year of the Postal Regulatory Commission's operations.

Mr. Blair said the PRC has already begun discussions with the Departments of Treasury and State, the Federal Trade Commission, U.S. Customs and Border Protection, the U.S. Postal Service's Office of Inspector General and the Government Accountability Office regarding implementation of the new law.

Mr. Blair said the PRC is also moving on other fronts to meet its new regulatory responsibilities. One critical effort is organizational, that is, adapting the PRC into the regulatory body envisaged in the PAEA. With the enactment of the PAEA, the commission will need to undergo changes in its organizational structure, workforce size and skills mix, areas of functionality and expertise, and policies and procedures.

Besides the PAEA, Mr. Blair also said the PRC is working on the current rate case and two mail classification proceedings, one of which concerns a Negotiated Service Agreement.

"To date, the commission has completed proceedings on six proposed NSAs and approved each of them, with the exception of one that was withdrawn at the request of the Postal Service and the co-proponent," he said.

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