Changes in Domestic Mail Classifications

AGENCY:

Postal Service.

ACTION:

Notice of implementation of changes to the Domestic Mail Classification Schedule.

SUMMARY:

This notice sets forth the changes to the Domestic Mail Classification Schedule to be implemented as a result of the Decision of the Governors of the United States Postal Service on the Opinion and Recommended Decision of the Postal Regulatory Commission Approving Negotiated Service Agreement with Bank of America Corporation, Docket No. MC2007-1.

DATES:

Effective Date: April 1, 2008.

FOR FURTHER INFORMATION CONTACT:

Matthew J. Connolly, (202) 268-8582.

SUPPLEMENTARY INFORMATION:

On February 7, 2007, in accordance with 39 U.S.C. 3622(f) as amended by the Postal Accountability and Enhancement Act, Public Law 109-435, and former sections 3622 and 3623 of the Postal Reorganization Act (39 U.S.C. 101, et seq.), the United States Postal Service filed a request with the Postal Regulatory Commission (“PRC”) for a decision recommending a negotiated service agreement (“NSA”) with Bank of America Corporation. The PRC designated this filing as Docket No. MC2007-1. On October 3, 2007, pursuant to chapter 36 of title 39 of the U.S. Code, the PRC issued to the Governors of the Postal Service its Opinion and Recommended Approving the NSA with Bank of America Corporation.

Pursuant to former 39 U.S.C. 3625, the Governors of the United States Postal Service acted on the PRC's recommendation on December 17, 2007. In the Decision of the Governors of the United States Postal Service on the Opinion and Recommended Decision of the Postal Regulatory Commission Approving Negotiated Service Agreement with Bank of America Corporation, Docket No. MC2007-1, the Governors of the Postal Service approved the recommended decision. In accordance with Resolution 07-7, the Board of Governors established an implementation date of April 1, 2008 on which the approved changes to the classification schedule for NSAs will take effect. The attachments to the Governors' Decision, setting forth the classification changes ordered into effect by the Governors, are set forth below.

In accordance with the Decision of the Governors and Resolution No. 07-7 of the Board of Governors, the Postal Service hereby gives notice that the classification changes set forth below will become effective at 12:01 a.m. on April 1, 2008.

Attachment A to the Decision of the Governors of the United States Postal Service on the Opinion and Recommended Decision of the Postal Regulatory Commission Approving Negotiated Service Agreement With Bank of America Corporation, Docket No. MC2007-1

Approved Changes in Rate Schedules

The following represent the changes to the rate schedules recommended by the Postal Regulatory Commission and approved by the Governors of the Postal Service in Docket No. MC2007-1. The changes require the addition of five new rate schedules—630A, 630B, 630C, 630D, and 630E. The italicized text signifies that the text is new, and shall appear in addition to all other rate schedule text.

SCHEDULE 630A NOTES

1. All discounts will be paid in the form of a refund at the end of each Postal Fiscal Quarter in accordance with section 630.4 of the Domestic Mail Classification Schedule (DMCS).

2. Per-piece rate incentives deducted from per-piece rates for letter-rated items in Rate Schedule 221.

SCHEDULE 630B NOTES

1. All discounts will be paid in the form of a refund at the end of each Postal Fiscal Quarter in accordance with section 630.4 of the Domestic Mail Classification Schedule (DMCS).

2. Per-piece rate incentives deducted from per-piece rates for letter-rated items in Rate Schedule 221.

SCHEDULE 630C NOTES

1. All discounts will be paid in the form of a refund at the end of each Postal Fiscal Quarter in accordance with section 630.4 of the Domestic Mail Classification Schedule (DMCS).

2. Per-piece rate incentives deducted from per-piece rates for letter-rated items in Rate Schedule 221.

SCHEDULE 630D NOTES

1. All discounts will be paid in the form of a refund at the end of each Postal Fiscal Quarter in accordance with section 630.4 of the Domestic Mail Classification Schedule (DMCS).

2. Per-piece rate incentives deducted from per-piece rates for letter-rated items in Rate Schedules 321B or 322.

SCHEDULE 630E NOTES

1. All discounts will be paid in the form of a refund at the end of each Postal Fiscal Quarter in accordance with section 630.4 of the Domestic Mail Classification Schedule (DMCS).

2. Per-piece rate incentives deducted from per-piece rates for letter-rated items in Rate Schedule 321B or 322.

Attachment B to the Decision of the Governors of the United States Postal Service on the Opinion and Recommended Decision of the Postal Regulatory Commission Approving Negotiated Service Agreement With Bank of America Corporation, Docket No. MC2007-1

Approved Changes in the Domestic Mail Classification Schedule

The following material represents changes to the Domestic Mail Classification Schedule recommended by the Postal Regulatory Commission and approved by the Governors of the Postal Service in Docket No. MC2007-1. The italicized text signifies that the text is new, and shall appear in addition to all other Domestic Mail Classification Schedule text.

NEGOTIATED SERVICE AGREEMENTS CLASSIFICATION SCHEDULE

630 BANK OF AMERICA CORPORATION NEGOTIATED SERVICE AGREEMENT.

630.1 Definitions.

The following terms shall have the meanings ascribed to them in the Negotiated Service Agreement (NSA or Agreement) between Bank of America Corporation (Bank of America) and the United States Postal Service (Postal Service): Bank of America mail, Confirm service, Courtesy Reply Mail, eDropship, FAST (Facility Access and Shipment Tracking System), Four-State Barcode (OneCode), Letter-Rated Mail, OneCode ACS, PostalOne!®, Qualifying Permit Numbers, Schedule A First-Class Mail, Schedule B First-Class Mail, and Seamless Acceptance.

630.2 Eligible Mail.

630.21 Bank of America. Bank of America mail eligible for discounts under Rate Schedules 630A, 630B, 630C, 630D, and 630E is limited to letter-rated mail that (1) is entered by or on behalf of Bank of America or a subsidiary or affiliate, (2) relates to the business activities of Bank of America or a subsidiary or affiliate, and (3) complies with the machinability requirements specified in the Agreement. Such mail includes cooperative mailings and mail entered pursuant to marketing arrangements with other entities.

630.22 Other Mailers. Functionally equivalent NSAs, involving worksharing discounts for performance-based improvements resulting from (1) the implementation of Four-State Barcode, OneCode ACS, Confirm service, Seamless Acceptance, FAST, and eDropship, (2) the barcoding of Courtesy Reply Mail, Business Reply Mail, and Qualified Business Reply Mail, and (3) the adoption of electronic Address Correction Service in lieu of physical returns for letter-rated First-Class Mail that would otherwise be eligible for Standard Mail rates, may be entered into with other customers, as specified by the Postal Service, and implemented pursuant to proceedings under chapter 36 of title 39 of the United States Code.

630.3 Operational Commitments of Bank of America.

630.31 Four-State Barcode. Bank of America will use the Four-State Barcode on all Bank of America mail entered under a Qualifying Permit Number as letter-rated First-Class Mail or Standard Mail.

630.32 OneCode ACS. Bank of America will place OneCode ACS markings on all Bank of America mail entered under a Qualifying Permit Number as letter-rated First-Class Mail and Standard Mail, subject to the conditions and exceptions set forth in the text of the NSA.

630.33 Waiver of Physical Return of Certain Letter-Rated Mailpieces. Bank of America will accept electronic information about certain kinds of undeliverable-as-addressed letter-rated mailpieces instead of their physical return, as specified in the text of the NSA.

630.34 Confirm Service. Bank of America will implement use of Confirm service in accordance with section 991. Bank of America will use Confirm service for all Bank of America mail entered under a Qualifying Permit Number as letter-rated First-Class Mail and Standard Mail.

630.35 Seamless Acceptance. Bank of America will use seamless acceptance for Bank of America mail entered under a Qualifying Permit Number as letter-rated First-Class Mail and Standard Mail. Bank of America will use a Mail.dat file (or Web-services) in conjunction with Four-State Barcodes to enable the Postal Service to use performance-based verification procedures for mail entered by Bank of America, subject to the conditions and exceptions set forth in the text of the NSA.

630.36 FAST and eDropship. Bank of America will use the automated scheduling services provided to the FAST system through the PostalOne! electronic data exchange services to enter its letter-rated Standard Mail mailpieces with destination entry discounts, subject to the conditions and exceptions set forth in the text of the NSA.

630.37 Barcoding of Courtesy Reply Mail, Business Reply Mail, and Qualified Business Reply Mail. Bank of America will implement use of the Four-State Barcode on all Courtesy Reply Mail, Business Reply Mail, and Qualified Business Reply Mail envelopes enclosed in its mail. All mailpieces will be machinable, automation compatible, and properly marked with a OneCode Four-State Barcode. This requirement is subject to certain conditions and exceptions as provided in the text of the NSA.

630.4 Discounts.

630.41 General Terms and Conditions. The Postal Service shall pay rate discounts in the form of refunds to Bank of America for improved address quality and mail processing in accordance with the text of the NSA. Discounts shall be calculated as adjustments to the rates of postage otherwise established by the DMM. Discounts shall be determined quarterly, over the life of the Agreement, based on Bank of America's actual mail volumes and address quality for each quarter just ended, subject to the conditions in the text of the NSA.

630.42 First-Class Mail Discounts.

630.421 Discounts for Improved Mail Processing. Eligible mail that is sent via First-Class Mail is subject to the otherwise applicable First-Class Mail postage in Rate Schedule 221, less the discounts shown in Rate Schedule 630A for improved mail processing performance for letter-rated First-Class Mail mailpieces.

630.422 Discount Formula for Improved Mail Processing. The Postal Service will use the following formula to calculate the rate discounts Bank of America will receive pursuant to Rate Schedule 630A:

a. The Postal Service will determine the total number of letter-rated First-Class Mail mailpieces of Bank of America mail that are read and accepted during their first pass through Postal Service mail sorting equipment during an applicable quarter.

b. The Postal Service will divide the number identified in section 630.422(a) above by the total number of letter-rated First-Class Mail mailpieces of Bank of America mail that receive a first pass through Postal Service mail sorting equipment during the same quarter.

c. The Postal Service will subtract the baseline value set forth in the agreement from the percentage obtained in section 630.422(b) to obtain the incremental improvement within the meaning of the table in Rate Schedule 630A.

630.423 Discounts for Reduced Return Rates. Eligible mail that is sent via First-Class Mail is subject to the otherwise applicable First-Class Mail postage in Rate Schedule 221, less the discounts shown in Rate Schedule 630B for reduced return rates for letter-rated First-Class Mail mailpieces.

630.424 Discount Formula for Reduced Return Rates. The Postal Service will use the following formula to calculate the rate discounts Bank of America will receive pursuant to Rate Schedule 630B:

a. The Postal Service will identify the number of undeliverable-as-addressed letter-rated First-Class Mail mailpieces of Bank of America mail that have been returned to the sender by the Postal Service, as determined through OneCode ACS, for the applicable quarter.

b. The Postal Service will divide the number identified in section 630.424(a) above by the total number of letter-rated First-Class Mail mailpieces of Bank of America mail for the applicable quarter.

c. The percentage obtained in section 630.424(b) will be subtracted from the applicable baseline undeliverable-as-addressed rate set forth in the Agreement, and the difference divided by that baseline undeliverable-as-addressed rate. The result, expressed as a percentage, will serve as the incremental improvement percentage used to determine the applicable rate incentive in Rate Schedule 630B.

630.425 Discount for Reduced Forwarding Rates. Eligible mail that is sent via First-Class Mail is subject to the otherwise applicable First-Class Mail postage in Rate Schedule 221, less the discounts shown in Rate Schedule 630C for reduced forwarding rates for letter-rated First-Class Mail mailpieces.

630.426 Discount Formula for Reduced Return Rates. The Postal Service will use the following formula to calculate the rate discounts Bank of America will receive pursuant to Rate Schedule 630C:

a. The Postal Service will identify the number of undeliverable-as-addressed letter-rated First-Class Mail mailpieces of Bank of America mail that have been forwarded by the Postal Service, as determined through OneCode ACS, for the applicable quarter.

b. The Postal Service will divide the number identified in section 630.426(a) above by the total number of letter-rated First-Class Mail mailpieces of Bank of America mail for the applicable quarter.

c. The percentage obtained in section 630.426(b) will be subtracted from the baseline forwarding rate set forth in the Agreement, and the difference divided by that baseline forwarding rate. The result, expressed as a percentage, will serve as the incremental improvement percentage used to determine the applicable rate incentive in Rate Schedule 630C.

630.43 Standard Mail Discounts.

630.431 Discounts for Improved Mail Processing. Eligible mail that is sent via Standard Mail is subject to the otherwise applicable Standard Mail postage in Rate Schedules 321B or 322, less the discounts shown in Rate Schedule 630D for improved mail processing performance for letter-rated Standard Mail mailpieces.

630.432 Discount Formula for Improved Mail Processing. The Postal Service will use the following formula to calculate the rate discounts Bank of America will receive pursuant to Rate Schedule 630D:

a. The Postal Service will determine the total number of letter-rated Standard Mail mailpieces of Bank of America mail that are read and accepted during their first pass through Postal Service mail sorting equipment during an applicable quarter.

b. The Postal Service will divide the number identified in section 630.432(a) by the total number of letter-rated Standard Mail mailpieces of Bank of America mail that receive a first pass through Postal Service mail sorting equipment during the same quarter.

c. The Postal Service will subtract the baseline value set forth in the Agreement from the percentage obtained in section 630.432(b) to obtain the incremental improvement percentage within the meaning of the table in Rate Schedule 630D.

630.433 Discounts for Reduced Undeliverable-As-Addressed Rates. Eligible mail that is sent via Standard Mail is subject to the otherwise applicable Standard Mail postage in Rate Schedules 321B or 322, less the discounts shown in Rate Schedule 630E for reduced undeliverable-as-addressed rates for letter-rated Standard Mail mailpieces.

630.434 Discount Formula for Reduced Undeliverable-As-Addressed Rates. The Postal Service will use the following formula to calculate the rate discounts Bank of America will receive pursuant to Rate Schedule 630E:

a. The Postal Service will identify the number of undeliverable-as-addressed letter-rated Standard Mail mailpieces of Bank of America mail that have been returned by the Postal Service, as determined through OneCode ACS, for the applicable quarter.

b. The Postal Service will divide the number identified in section 630.434(a) above by the total number of letter-rated Standard Mail mailpieces of Bank of America mail for the applicable quarter.

c. The percentage obtained in section 630.434(b) will be subtracted from the baseline undeliverable-as-addressed rate set forth in the Agreement, and the difference divided by that baseline undeliverable-as-addressed rate. The result, expressed as a percentage, will serve as the incremental improvement percentage used to determine the applicable rate incentive in Rate Schedule 630E.

630.5 Rounding Convention.

For the purposes of the Agreement, the following rounding convention will apply:

a. Numbers expressed as percentages will be rounded to the nearest tenth of a percent, and

b. Numbers expressed in dollars and cents will be rounded to the nearest thousandth of a cent.

630.6 Rates and Fees.

The rates applicable to this Agreement are set forth in the following Rate Schedules:

630A

630B

630C

630D

630E

630.7 Expiration.

The provisions of section 630 expire on April 1, 2011 at 12:01 a.m. (Eastern).

630.8 Precedence.

To the extent any provision of section 630 is inconsistent with any other provision of the Domestic Mail Classification Schedule, the former shall control.