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Federal Register / Vol. 86, No. 235 / Friday, December 10, 2021 / Rules and Regulations TABLE 1PENDING PERIODICALS AND ASSOCIATED RATESContinued Periodical
Periodicals Flats
Periodicals Flats

Associated class/subclass
Priority Mail Commercial Flats 6.
Priority Mail Commercial Flats 6.

Average price for associated class/subclass
Reason for associated class/subclass
Average periodicals price 1

%
Difference
Commercial Flats weighs under 1 pound

7.650

0.333

2,197

Commercial Parcels weighs over 1 pound but under 2 pounds.

7.780

0.333

2,236

1 Average
revenue per piece from Shape Indica for FYQ3FY21Q2: With August approved Prices.
Price based on Q3FY2020Q2Fy2021.
piece with weight at least 1 pound and up to 15 pounds based on Q3FY2020Q2Fy2021.
4 Average Price based on Q3FY2020Q2Fy2021.
5 Average Price based on Q3FY2020Q2Fy2021 Ground and Destination Entry excluding light weight parcels.
6 Average Price based on Q3FY2020Q2Fy2021.
2 Average
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3 Average
For example, for Periodicals under one pound that meet the size requirements for Flats, mailers pay Marketing Mail Flats prices, achieved by multiplying the applicable Periodicals Flats price by 1.63, i.e., adding an additional 63 percent of the Periodicals price to the average per-piece Periodicals price to reach the average, per-piece Periodicals Flats price and not, as some commenters understood it, by paying only 63 percent of the Periodicals price. For Periodicals weighing more than one pound or that are more than 0.75 thick, mailers pay Bound Printed Matter Parcels prices, achieved by multiplying the Periodicals Parcels price by 2.46. All of this is detailed on the Periodicals postage statement, PS Form 3541.
The non-Periodicals prices to be paid are expressed as the percentage difference between the current, average per-piece price for Periodicals and the current, average per-piece price for the corresponding product. The average prices are derived from volume and revenue data for the previous four quarters, and thus the Postal Service may update the percentages in Exhibit 5.2.3 each quarter to reflect quarterly changes in volumes and revenues.
For all of the foregoing reasons, the Postal Service disagrees with the commenters contention that the September 30 proposal for calculating pending Periodicals prices is a price increase and is making no changes as a result of the comment. The Postal Service is, however, revising the pending postage table from the proposed rule Exhibit 5.2.3 by adding Nonprofit USPS Marketing Mail Parcels as an option for eligible Periodicals during the pending authorization process. This option was inadvertently omitted from the proposal.
Comment: The two remaining commenters oppose the proposal on a number of grounds, though they stated that they generally support the intent to simplify and improve the current
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process for calculating rates for pending Periodicals.
Primarily, these commenters state that the proposed rule appears to be a price change that must first be approved by the Commission. If the Postal Services intent was to apply existing prices, that was not clear from, or supported by, information or discussion in the proposed rule.
The commenters also state that the proposal would result in widely divergent, often too-high, prices and, therefore, that the Postal Service should either reduce the percentages given or provide an intermediate appeals process for the mailer to seek review of the pending Periodicals price charged.
USPS Response: The Postal Service appreciates the commenters support for improving the process for assessing prices for pending Periodicals.
As explained in its response to the previous comment, the Postal Service disagrees that the proposal for changing the methodology for calculating prices for pending Periodicals also proposed a change in prices. Again, the Postal Service proposed an alternative method of assigning prices to mailings while a mailers application for Periodicals mailing privileges is pending. The new methodology assigns closely applicable non-Periodicals prices to pending Periodicals, and these prices are expressed as a percentage difference between the current, average per-piece price for Periodicals and the corresponding current, average perpiece price for the corresponding product, based upon volume and revenue for the previous four quarters.
The overall result is to assess, averaged across all mailings, the same amount before and after the proposal is adopted.
Looked at somewhat differently, just as the proposal makes no direct changes in prices, it makes no indirect changes in prices either. Nothing about the proposal will force pending Periodical mailings into a higher price category because existing, associated prices are already applied, nor has the Postal
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Service eliminated any rate cells or categories. United States Postal Service v. Postal Regulatory Commission, 785
F.3d 740, 75152 D.C. Cir. 2015;
United States Postal Service v. Postal Regulatory Commission, 886 F.3d 1261, 1273 D.C. Cir. 2018 indirect changes in prices. In short, with no changes in prices or in available rate categories or cells, the proposal can have no price cap implications. Moreover, there is no technical way to map the changes described here on to the billing determinantsa prerequisite for any price cap analysisbecause billing determinants data do not separately set out non-Periodicals rates paid by pending Periodicals volume.
The Postal Service apologizes that the proposal was not sufficiently clear and trusts that this explanation shows that it is not seeking to change prices for pending Periodicals.
As to wide fluctuation or variability in prices under the new methodology, the Postal Service does not agree that the proposed methodology results in higher prices. Because the proposed methodology is based upon historical volumes and current, average prices, it is possible that for any given mailing, a mailer may pay a different price than it would have paid under the existing methodology. But those prices may be higher than, lower than, or unchanged from the existing methodology, though the Postal Service expects the prices to be close to those given by the present methodology.
Over multiple mailings during the pendency of an application for Periodicals privileges, however, mailers should collectively be paying approximately the same prices under both the previous and proposed methodologies. As such, the Postal Service disagrees that it should reduce the proposed percentage multipliers in DMM Exhibit 5.2.3.
For that same reason, the Postal Service disagrees that it should provide an additional opportunity for review of pending Periodicals pricing. What is
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