Mailers Perplexed by USPS Decision to Move Forward on Postal exigency Request
Filed under: mailers, postal, postal news, rate increase, usps
The following has been sent by the Alliance of Nonprofit Mailers, the Association for Postal Commerce, the Direct Marketing Association, and the Association of Magazine Media to the Postmaster General of the United States regarding the Postal Service’s decision to move forward with a postal exigency request.
We are perplexed. In your presentations to the mailing community in recent months, we have heard you say repeatedly that you do not want an exigent price increase; an exigent increase will not occur; and mailers should budget for 2012 price increases at the CPI level, because a larger increase would be self-defeating due to its negative effects on mail volume. Simultaneously, however, the Postal Service has continued to file pleadings and signed statements with the Postal Regulatory Commission in Docket No. R2010-4 claiming that the Service still seeks a $2.3 billion exigent increase.
Under the current circumstances, the only prudent course for mailers is to assume that the Postal Service is still seeking Commission approval of an exigent rate increase in this docket, and that an increase approved by the Commission may very well be implemented by the Board of Governors. As long as the Postal Service’s exigent increase request remains in active litigation, the Commission must consider the request and issue a decision on it. Moreover, if the Commission ultimately authorizes any part of the requested increase, any portion of the authorized increase not implemented by the Postal Service could still end up as banked rate authority—rate authority that would force your customers to plan for above-CPI postage increases for the next five years, and adjust their mailing plans accordingly.
For these reasons, the mailing industry must continue to oppose the exigent rate request as long as it remains pending before the Commission. The resulting litigation will force both the Postal Service and the mailing community to divert precious time, energy, and resources to litigating an increase that you profess not to want – time, energy, and resources that would be far better deployed constructively collaborating to solve the Postal Service’s financial problems and pushing for Congressional action in our common interest. Further, the continuing pendency of this litigation—and the mere possibility that mailers may face an above-CPI rate increase in 2012 or 2013—has cast a pall of uncertainty over the industry’s budgeting and mailing plans. This business uncertainty almost certainly will cost the Postal Service mail volume and revenue.
These harmful consequences can be easily avoided. If you do not want an exigent increase and you do not want mailers to plan for one, withdraw the case. Actions speak louder than words.
Unless and until the Postal Service publicly withdraws its formal request for Commission approval of exigent rate increases, mailers must assume that the Postal Service is serious about seeking them. For the good of the Postal Service and the mailing community, we urge you to pull the exigent request.
source: PostCom.org
USPS FAQ For 2012 Domestic and International Mailing Services Price Change
USPS released the following “Frequently Asked Questions” on Prices Changes effective January 22,2012
On October 18, 2011, the Postal Service™ announced new prices and product features for the following domestic and international mailing services:
- First-Class Mail®.
- First-Class Mail International®.
- Periodicals.
- Standard Mail®.
- Package Services:
- Bound Printed Matter.
- Media Mail®/Library Mail.
- Parcel Post®.
- Extra Services and Fees.
The new prices take effect January 22, 2012.
According to the Postal Accountability and Enhancement Act of 2006, on average, Mailing Services prices can increase no more than the rate of inflation based on the Consumer Price Index (CPI). Mailing Services prices will increase by an average of 2.1 percent across each class of mail. Individual prices within a mail class may have an increase that is higher or lower than 2.1 percent.
Highlights of Changes
Single-piece, 1-ounce First-Class Mail letters will increase $0.01, to $0.45 (additional ounces remain at $0.20). The price for mailing a First-Class Mail postcard will increase $0.03 to $0.32, and the cost of stamped postcards will increase $0.03 to $0.35. Read more
Senator Collins Urges PRC to Consider Congress Intent In Postal Rate Increase Case
Filed under: politics, postal, postal news, PRC, press releases, rate increase, usps
Press release from Susan Collins, Senate Homeland Security and Governmental Affairs Committee Ranking Member , R-Maine:
WASHINGTON, July 25 —U.S. Senator Susan Collins, Ranking Member of the Senate Homeland Security and Governmental Affairs Committee, today urged the Postal Regulatory Commission (PRC) to consider Congressional intent as it determines how closely proposed rate hikes must be linked to an exigent circumstance to warrant an increase above the rate of inflation.
The 2006 postal reform law, which Senator Collins authored, capped postal rate increases at the rate of inflation, but allowed a narrow exception for extraordinary or exceptional circumstances such as a terrorist attack or catastrophic natural disaster.
Senator Collins’ committee has jurisdiction over the U.S. Postal Service. In January, she filed an amicus brief urging the U.S. Court of Appeals for the District of Columbia Circuit to uphold the PRC’s unanimous decision to reject the Postal Service’s requested rate hikes, which on average, would have increased rates by four to six percent. The Court of Appeals largely agreed with the PRC’s and Senator Collins’ position, but remanded to the PRC the narrow question of how close the causal link must be between a proposed rate increase and the exigent circumstances used by the Postal Service to justify the increase.
“The economy and technology are affecting the Postal Service and, indeed, most businesses. But in writing postal reform legislation in 2006, my intention was not to permit rate increases above the inflation-based cap as relief from chronic, ordinary, or unexceptional circumstances and general Postal Service red ink,” said Senator Collins. “I urge the PRC to require that the nexus between the exigent circumstances and the proposed rate hike be close. This is necessary to preserve the stability and predictability of rates that the 2006 law sought to establish.
“Excessive rate increases coupled with service cutbacks will only drive customers away. The Postal Service needs to redouble its efforts to cut costs, develop new services to increase volume, re-invent its business model, and work with the Administration to remedy an overpayment to the federal retirement fund. I will continue to press the Administration and the Postal Service on these vital reforms.”
Postal Service Price Adjustments Set for April 17
Filed under: postal, postal news, press releases, rate increase, usps
Stamp Price Remains 44 Cents; Impact to Retail Customers Minimal
WASHINGTON — The Postal Regulatory Commission has notified the U.S. Postal Service that price changes announced Jan. 13 satisfy the requirements of the law and will take effect April 17.
The first U.S. Postal Service mailing services price change in two years will have minimal impact on retail customers who will continue to pay only 44 cents for a stamp.
Price changes of note for retail customers include the following:
* First-Class Mail letters (1 oz.) remain unchanged at 44 cents,
* First-Class Mail additional ounces increase to 20 cents,
* Postcards will cost 29 cents,
* Letters to Canada or Mexico (1 oz.) increase to 80 cents, and
* Letters to other international destinations will remain unchanged at 98 cents.
“Postal Service products and services offer a great value to the American public,” said Postmaster General Patrick R. Donahoe. “For a very affordable price, you can send letters, bill payments, packages, and other mail across town or across the nation.”
The 1.7 percent average increase is at or below the rate of inflation as measured by the Consumer Price Index — although actual percentage price increases for various products and services vary.
Prices will also change for other mailing services, including Standard Mail, Periodicals, Package Services and Extra Services. Larger volume business mailers will see price increases in a variety of categories. Detailed pricing information is available online at www.usps.com/prices.
The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations.
PRC Seeks Public Comment on Price Increase Proposed by USPS
Washington, DC – The Postal Regulatory Commission has established Docket R2011-2, to receive comments on postal rate changes for market dominant products filed January 13 by the U.S. Postal Service. The rate changes, which include maintaining the current First-Class, first ounce rate at $.44, are scheduled to take effect on April 17, 2011.
“The Commission will carefully review the Postal Service’s pricing proposals to ensure that the increases comply with the price cap and are consistent with statutory pricing policies,” said Commission Chairman Ruth Y. Goldway. “We encourage the public to participate in the process by sharing with the Commission their views on the requested postage increases.”
Commission rules require that action be taken within 45 days of receipt of the Postal Service’s filing and permit a 20-day public comment period. The comment period allows the public to address the consistency of the new rates with statutory requirements, including a CPI-based price cap.
Comments from interested parties are due by February 2, 2011. Information on the filing of comments and the calculation of the annual CPI price cap – which is 1.741% in this Docket – is available on the Commission’s website, www.prc.gov. Market dominant products include First-Class letters and cards, advertising mail, Periodicals, and single piece parcels.
Within 14 days of the conclusion of the public comment period, the Commission will determine whether the planned rate adjustments are lawful and issue an order announcing its findings. Kenneth E. Richardson, an attorney in the Commission’s Office of General Counsel, will represent the interests of the public in this proceeding.
Postal Service continues rate case appeal
Filed under: postal, postal news, PRC, rate increase, usps
As it appeals the denial of an “exigent” rate increase, the U.S. Postal Service is arguing that the Postal Regulatory Commission’s decision was “arbitrary and capricious,” according to a brief filed late this afternoon with the U.S. Circuit Court of Appeals for the District of Columbia.
Among other points, USPS lawyers contend that the five-member commission established “new requirements that were not shared with or explained to the Postal Service,” according to an agency summary.
“Instead, the PRC simply denied the request as a whole and punted the Postal Service’s entire financial crisis to Congress,” the brief concludes.
full story: Federal Times
Appeals Court Sets Schedule For USPS Appeal Of PRC’s Denial Of Rate Increase
The U.S. Postal Service on October 22, 2010 appealed the Sept. 30 ruling of the Postal Regulatory Commission denying the Postal Service exigent price request.
According to court records:
The United States Postal Service hereby petitions this Court for review of Order Number 547 of the Postal Regulatory Commission (PRC), issued on September 30, 2010, which denied the Postal Service’s request for exigent rate adjustments. The United States Court of Appeals For the District Of Columbia Circuit has set a preliminary schedule for submitting documents.
FURTHER ORDERED that respondent submit the documents listed below by the dates indicated.
Entry of Appearance Form November 29, 2010
Procedural motions, if any November 29, 2010
Certified Index to the Record December 13, 2010
Dispositive Motions, if any (Original and 4 copies) December 13, 2010
It is FURTHER ORDERED that briefing in this case be deferred pending further order of the court.
USPS Takes PRC To Court Over Denied Request For Rate Increase
News Alert from Business Mailers Review
In a surprise move the Postal Service announced it will appeal the Postal Regulatory Commission’s (PRC’s) Sept. 30 decision rejecting a request for a 5.6% rate hike – the first such request under the 2006 postal reform law’s exigent rate clause.
The PRC found the deep recession and resulting drop in mail volume represented the type of exception to the annual CPI-based cap on rate hikes the 2006 law envisioned. However, the commission said, USPS failed to show a direct link between its specific request and the exceptional circumstance.
In its appeal to the U.S. Court of Appeals for the District of Columbia Circuit, the Postal Service will argue that the PRC misread the statute and applied an incorrect standard in evaluating the request for an exigent price increase.
USPS said it is hoping for a quick result and is also asking the court to affirm that it has the right to pursue the exigent rate increase as originally filed with the PRC.
USPS says this appeal is independent of any decision to increase prices at the rate of inflation within the CPI cap.
From USPS Government Relations:
On October 22, 2010, the Postal Service filed an appeal with the U.S. Court of Appeals for the D.C. Circuit regarding the September 30, 2010 ruling of the Postal Regulatory Commission (PRC) denying the Postal Service exigent price request.
The Postal Service is requesting a review of the PRC’s interpretation of the law that governs how prices can be set under “extraordinary and exceptional” circumstances –an exigent” price increase. The Postal Service is also requesting that the Court of Appeals confirm that the Postal Service has the right to the exigent price increase, as
originally filed with the PRC.The Postal Service disagrees with the PRC’s interpretation of the statutory language and believes that the PRC applied an incorrect standard in evaluating the request for an exigent price increase.
The Postal Service believes we need clarity regarding the exigent price increase rules under current law should the Postal Service find itself in a similar situation in the future. The Court of Appeals will ask for briefs from both the Postal Service and the PRC. Oral arguments also may be scheduled by the court.
The Postal Service continues to evaluate other options to address the PRC’s ruling. The exigent price request would have generated about $2.3 billion in much needed revenue for the first nine months of calendar year 2011.
As laid out in the Postal Service’s March 2nd Action plan, requesting an exigent price increase was the one option the Postal Service could exercise under current law to help address its current dire financial situation.
Increasing revenue is only one part of the solution. The long-term financial viability of the Postal Service will remain questionable unless the actions recommended on March 2nd are implemented. These include:
- Addressing the statutory retiree health benefit pre-funding requirement, averaging $5.5 billion;
- Allowing the Postal Board of Governors to direct the Postal Service to move to five day delivery;
-Requiring an arbitrator to consider the financial health of the Postal Service when making a determination;
- Allowing the Postal Service greater freedom to close Post Offices;
- Permitting the Postal Service to offer new products and services; and
- Giving the Postal Service greater pricing flexibility
source: Postcom.org
Affordable Mail Alliance Argues PRC Ruling Allows USPS To Exploit The Unused Rate Authority
Filed under: postage rates, postal, postal news, rate increase, usps
Affordable Mail Alliance Comments on informal ruling issued by a Postal Regulatory Commission lawyer Oct 12, 2010 regarding USPS possibly raising postage rates.
THE OCTOBER 12 LETTER-RULING OF THE OFFICE OF GENERAL COUNSEL IS EITHER UNLAWFUL OR INEFFECTIVE.
The OGC letter, if treated as a binding substantive ruling, violates the due process rights of AMA and its members. AMA’s members have a substantial economic interest in the CPI price cap formula. The methodology adopted in the OGC letter for computing the Postal Service’s unused rate authority under the CPI cap could subject users of market-dominant products to approximately $360 million per year in extra postage and fees compared with the computation of the price cap formula that AMA and the Postal Service believed was in effect until recently.2 As interested parties, AMA’s
The price cap provisions of Section 3622(d) are designed to protect mailers and the public by limiting price increases to changes in the rate of inflation over time. Order No. 547 at 10-14.
Maintaining the integrity of this structure requires that the price cap reflect periods of deflation as well as inflation. Recognizing increases in the CPI, while disregarding the “additional unused rate authority” accrued under Rule 3010.26(c)(2) whenever its value is negative, would allow the Postal Service to ratchet up its prices over time faster than inflation by refraining from rate adjustments following intervals of deflation.
The resulting distortion in price levels would be large. The difference between unused rate authority of 1.447 percent and unused authority of 0.873 percent, or 0.604 percent, is approximately $360 million per year. Moreover, postal price levels inflated by the use of an excessive rate adjustment factor would become the base rates for future price cap adjustments; hence, the original overcharge would recur in perpetuity (and would be inflated to reflect future changes in the CPI).
Moreover, the divergence between postal rates and the CPI would tend to widen over time. Recurring periods of deflation are not unlikely in the current economies of the United States and the world.5 If the economy alternates between periods of inflation and deflation that leave the CPI roughly flat, selective timing of CPI-based price adjustments could result in postal price increases substantially outpacing inflation over time.
Allowing the Postal Service to exploit the “unused rate authority for the 12 months represented by the annual limitation” (Rule 3010.26(c)(1)), while ignoring the negative “additional unused rate authority” accrued during earlier periods (i.e., the “additional unused rate authority” established under Rule 3010.26(c)(2)), would also violate 39 U.S.C. § 3622(d)(2)(C)(iii)(III), a provision of the PAEA included by Congress to prevent the Postal Service from gaming the price cap through selective application of unused rate authority from prior periods. The provision establishes a first-in-first-out rule: the Postal Service must “use the unused rate adjustment authority from the earliest year such authority first occurred and then each following year.” Id., (emphasis added). The approach embraced in the October 12 letter-ruling of the OGC turns this rule of priority on its head—allowing the Postal Service to exploit its unused rate adjustment authority from the most recent 12-month period first, while leaving implementation of negative unused rate adjustment authority from earlier periods for last—or, more likely, never.
No reviewing court is likely to find this nonsensical outcome consistent with the plain language of 39 U.S.C. § 3622(d)(2)(C)(iii)(III) or the policies of Section 3622(d). Having negative “unused rate adjustment authority” amounts to maintaining rates in excess of the CPI cap. The OGC’s interpretation of the rules would allow the Postal Service to maintain—and increase further—rates in excess of the CPI cap indefinitely.C.
Conclusion
The method of calculating the price cap limitation for the next notice of market-dominant rate adjustment that comports best with the language and structure of the Commission’s rules, and the policies underlying 39 U.S.C. § 3622(d) and the PAEA generally, is to add the interim unused rate authority to the annual price cap limitation, following the calculation method prescribed in 39 C.F.R. § 3010.26. Accordingly, the Commission should clarify that the Postal Service should use the method of calculating the price cap described in these comments—the same method that the Postal Service used in its July 6, 2010 Request in this docket.
Dead Tree Edition: Mailers Alliance Fights ‘Nonsensical’ Price-Cap Ruling
Postage Rates May Be Going Up In January 2011
Dead Tree Edition – Postage rates are likely to increase about 1.7% in January as a result of a letter that the Postal Regulatory Commission’s chief lawyer issued today. Postmaster General Jack Potter promised not to increase postage rates during 2010, but postal officials seem eager to bump up rates once the calendar changes over to 2011. The Postal Service only has to give 45 days’ notice before announcing price increases that comply with the rate cap. So it seems likely that USPS will announce increases by mid-November, and perhaps as early as Friday, that take effect in early January.
full story from Dead Tree Edition