Premature motion: PRC dismisses bid to view non-public Amazon docs

SteveBlog, Jamison Articles

MARK JAMISON

Almost three months ago, I filed a request with the Postal Regulatory Commission seeking access to documents filed under seal in the docket that dealt with the Postal Service’s deal with Amazon to deliver its parcels on Sundays.  Last week, the PRC finally responded to the request.

The Commission ruled that my motion was “dismissed without prejudice” as being “premature,” meaning I could resubmit the request again when the time was ripe — sometime next year.  I was also advised to confer with the Postal Service and Amazon “in an effort to resolve the request for access in a mutually agreeable fashion.”  The Postal Service and Amazon had both filed briefs vehemently opposing my request, but somehow we were supposed to confer together and thereby “resolve the dispute without court action.”

This seems like a strange way to respond to a request for access to non-public documents, and the whole story illustrates the disturbing lack of transparency in how the Postal Service conducts its business — and with PRC approval to boot.

Seeking access to materials under seal

News of a special Negotiated Service Agreement with Amazon first came out back in November, when the Postal Service announced that it would be delivering some Amazon parcels on Sundays.  It wasn’t clear at the time which PRC docket covered this NSA, since the filings in most competitive products cases like this don’t have enough specifics to determine what the docket is about or who is involved.

With a little investigative work and a tip from a reader, we were able to guess at the correct docket (after getting it wrong the first time), and I filed a request to get access to the materials under seal, which is permitted under PRC rules, so long as the individual seeking access signs a confidentiality agreement.  Both the Postal Service and Amazon  filed objections to my request, and it was only then that we got confirmation that this was indeed the Amazon docket.

I then filed responses to Amazon and the Postal Service, and then Amazon filed a response to my response.  My initial request was filed on November 22, 2013, and the final Amazon filing was on December 6, 2013.  (There’s more background on the case here.)

PRC rulings on competitive product cases can occur in as few as fifteen days.  More often than not, the PRC rules on motions within a couple of weeks.  There have been times when the PRC has waited much longer, such as a few recent cases involving post office appeals in which the PRC waited until the end of the 120-day period in the regulations before responding to a motion.  And in at least one case — the Glenoaks post office appeal — the Commission never ruled on a motion to dismiss and a motion for reconsideration at all.  For the most part, however, the Commission rules on motions in a timely manner, and I expected to get a response to my request sometime in mid December.

As of January 15, 2014 — almost two months after my request for access had been filed — I had not received a ruling, so I sent the PRC a letter asking for a response.  I acknowledged that my request may have been constructed improperly or failed to meet some other technical, procedural, or legal standard, but whatever the issues, I thought my request deserved some sort of response.  Either the Commission should rule on the request or tell me why a ruling wasn’t appropriate.  Simply allowing a motion to disappear into a bureaucratic abyss seemed unreasonable and, well, bureaucratic.

 

Finally a ruling

On Friday, February 7 — eleven weeks after my request had been filed — the PRC finally issued a ruling.  The Commission dismissed my motion “without prejudice” as being “premature,” meaning that I can re-submit the motion at some later date.  The PRC also suggested that I contact both Amazon and the Postal Service and attempt to gain access to the material in a way that was agreeable to them.

From what I have been able to determine by studying the ruling and talking to PRC staff, the case will “ripen” in about a year, when the Commission considers the Amazon docket (CP2014-1) as part of next year’s Annual Compliance Determination Report (ACDR).  The Commission is actually doing the 2013 ACDR right now, but the Amazon contract took effect on October 30, a a month after the 2013 fiscal year had ended, so it won’t be reviewed until the 2014 ACDR.

So now it appears that I am supposed to wait a year before I can request permission to examine a docket that may be problematic and could potentially give rise to a formal complaint.  If that’s the case, then there is no real transparency about what the Postal Service does and what the PRC approves.  The PRC has approved a potentially controversial deal, and no outside party can have access to materials required to render an independent judgment.  The Commission is essentially saying, “you’ll just have to trust us on this.”

 

Work it out yourselves

In its ruling on my motion, the PRC encourages me to contact Amazon and the Postal Service to see if we can “resolve the request for access in a mutually agreeable fashion.”  The PRC suggests that such contact would be in the spirit of Federal rules that encourage parties to resolve differences without court action.

It’s hard to take the PRC seriously.  Do the Commissioners truly imagine that Amazon and the Postal Service are going to grant me access to documents after they’ve filed motions opposing just that?  In its response to my original request, the Postal Service laid down criteria that would make virtually any request unacceptable.  For its part, Amazon engaged in ad hominem attacks essentially arguing that I was too insignificant to warrant approval for access to sensitive materials.

There is no indication that either of the other parties would engage in a fruitful discussion, and the Commission knows this.  Nonetheless, I will take the PRC’s advice and contact both Amazon and the Postal Service, not in hopes that things will work out but in order to make my re-filing as strong as possible.  I remain convinced that it is important for the details of such NSAs to be made more transparent, if not to the public at large, at least to individuals without a financial interest in the case.

The Amazon deal involved a troubled entity, the Postal Service, that’s known for being highhanded in terms of its responsibilities to the public. Amazon is one of our largest corporations, and it has become a very powerful collector of data and much more than a mere bookseller, as a recent article by George Packer points out.

The deal to deliver for Amazon on Sunday thus raises several questions.  Why is the deal being offered only to Amazon and its customers?  How is it appropriate for a government monopoly and a giant corporation to broker a secret deal?  Why should the Postal Service be making special deals like this one — or the NSA that gave Valassis special breaks — that favor certain large commercial entities?  How does this NSA conform to the promise of uniform service under the universal service obligation?

 

Proprietary and private

With the advent of competitive products and NSAs, much of the Postal Service’s business is done out of the public view.  Even though the Postal Service remains ostensibly a public service and a public institution, its course over the last four decades — particularly after the passage of PAEA in 2006 — has been towards a more corporate business model.   Information about the basic workings of the Postal Service is increasingly treated as proprietary and private.

In its role as regulator, the PRC is supposed to watch out for the public interest.  What that “public interest” entails, however, is ambiguous and subject to whatever the Commission and its Public Representatives decide.  Too often, it seems they believe that what’s good for the Postal Service — as determined by management — is good for the general public.  Sometimes the big stakeholders are also considered part of the “public interest,” but the broader public — the average citizen — seems to be getting left out.  The PRC’s role is further complicated by the fact that it is a Federal agency regulating another Federal agency, an unusual and perhaps confusing undertaking.  Nevertheless, there is clearly a role for a regulator in overseeing the nation’s postal infrastructure.

I filed my request to look at the materials in the Amazon Sunday delivery docket for several reasons.  It has been evident for quite awhile that NSAs are not the revenue-generating panacea that they’ve been touted to be.  The GAO and the OIG have often noted many problems with NSAs.  Because they are done in secret with only the Postal Service, the vendor, and the PRC having complete knowledge of their construction and implementation, there really isn’t the sort of transparent oversight one ought to expect.

For example, a recent OIG report on Metro-Post — the plan to offer same-day delivery in some urban markets — shows that the initiative was badly mishandled and ended up losing money.  It shouldn’t take an OIG report to uncover problems with a product that’s being overseen by the PRC.  When an individual like myself, someone with a demonstrated interest and expertise in postal affairs and no conflicts as defined by the statute, seeks to review a case, he shouldn’t have to wait a year.  The review will hardly be “timely” twelve months from now.

Even the big stakeholders have complained about the secrecy surrounding NSAs and competitive products dockets.  In its recent comments in the Annual Compliance Review, for example, UPS took note of my attempt to review sealed material and discussed the issues of secrecy and oversight in these dockets.

 

Basic principles

Besides the fact that individual NSAs and similar offerings like test products need more transparent oversight, there is the greater principle of just how much information the Postal Service ought to be able to keep secret.  Until and unless someone begins looking closely at the kinds of information that is maintained under seal, something I proposed to do in this case, there is no way to make a general argument that too much information is being hidden from the public.

The Postal Service has a predilection towards secrecy and opacity.  The Postal Service has been caught hiding information, like the market research study that did not support its case on behalf of the plant consolidation plan.  The Postal Service has also become notoriously difficult when responding to FOIA requests. This article details how the Postal Service has tried to charge outrageous sums for filling FOIA requests.  Doug Carlson, a postal watchdog, currently has a suit in Federal court regarding both the costs and the manner in which the Postal Service responds to FOIA requests.

In the Amazon case, the Commission had an opportunity to rule on basic principles of transparency. Both the Postal Service and Amazon claimed that the statute protects them from curiosity seekers.  They made at least part of this claim based on the requirement that an individual seeking access to materials under seal not have a financial interest or potential conflict in seeing the material.  The Postal Service and Amazon made assertions that, in effect, would bar anyone from ever looking at sealed materials in a competitive products case.  Those assertions merited a response and a clarification from the Commissioners — something they sidestepped, at least for the moment.

 

Assisting in its own demise

Maybe the Commission was being coy with this ruling.  I don’t mean that in a disrespectful way, but by dismissing my request in a way that allowed me to re-file at a (much) later date, perhaps the Commission was trying to put off a difficult decision during a time when its authority is being questioned.  The postal reform bill recently passed out of the Homeland Security and Governmental Affairs Committee relegates the PRC to a relatively minor role in reviewing postal rates.

The committee’s chair, Senator Carper, has admitted that his bill would marginalize the Commission, and the committee’s ranking minority member, Senator Coburn, has characterized PRC Chairman Goldway as a “globetrotting postal regulator” who has been “flying high on the taxpayer dime.”  Chairman Goldway’s opinions were pointedly not requested when Senators Coburn and Carper crafted their latest bill, and it seems clear that there are many legislators who don’t have a great deal of use for the opinions of the Commission.  Watch Ms. Goldway’s testimony before the Senate last September, and you’ll get a sense of how dismissive some senators can be.

Postal reform has not shown us Congress at its finest hour.   Many of our elected representatives — and not just Republicans like Darrell Issa — have seemed quite content to approve provisions that will inevitably lead to more piecemeal privatization of the postal network and ultimately to total privatization of the Postal Service itself.  Diminishing the role of the PRC will go a long way towards accomplishing that goal.

Congress may thus have reason to neuter the PRC, but the Commission shouldn’t assist in its own demise by avoiding difficult decisions.

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