USCA Case #11-1117 APPELLATE AND COMMERCIAL LITIGATIONDocument OFFICE OF THE GENERAL COUNSEL

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February 10, 2012 Mark J. Langer Clerk of the Court U.S. Court of Appeals for the D.C. Circuit 333 Constitution Ave., N.W. Washington, DC 20001-2801 RE: U.S. Postal Service v. Postal Regulatory Commission, No. 11-1117

Dear Mr. Langer: Pursuant to Rule 28(j) and D.C. Circuit Rule 28(f), the United States Postal Service respectfully submits these additional citations to respond to questions raised at oral argument. With respect to Judge Williamss Ramsey pricing questions, the PRC concluded, under prior law, that [a]pplication of a Ramsey pricing formula to a multi-product firm that includes captive, monopoly products, would be contrary to the policies of the Act . Opinion & Recommended Decision, Vol. 1, at 210-211 (PRC No. R2000-1, Nov. 13, 2000) (available at http://www.prc.gov/Docs/26/26350/R2000-1-V1-Rev.pdf). With respect to the waiver questions asked by Judge Garland, the argument that Section 3622(c)(2), rather than Section 101(d), governs whether a market-dominant product must cover its costs has not been waived. Neither the PRC nor intervenors argued that this issue was waived, presumably because a reasonable Commission necessarily would have seen the question raised before [this Court] as a part of the case presented to it. Time Warner Entmt Co. v. FCC, 144 F.3d 75, 81 (D.C. Cir. 1998). Indeed, the Valpak intervenors recognized that the Postal Services analysis assumes, sub silentio, that the Commissions review of the pricing of underwater products is limited to the requirements set forth in section 3622(c)(2) (JA 166), which is the Postal Services position in this Court, and went on to argue that 3622(c)(2) applies at the product level. See also JA 236-39. In reply to Valpaks comment, the Postal Service noted that the PRC had recently appeared to decide that the product level is not the appropriate level for applying pricing standards, suggesting instead that the class level is the appropriate level and thus Commission action to remedy product-level cost coverage shortfalls may not be necessary. JA 15-16.

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MICHAEL.J.ELSTON@USPS.GOV

USCA Case #11-1117

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Until the 2010 ACD itself, the PRC had not interpreted section 101(d) to impose requirements that are contrary to the specific requirements of chapter 36. Unlike other regulatory schemes with which the Court may be familiar, there is no statutory reconsideration procedure in the PAEA that would toll the time to appeal, and the Postal Service is obliged to petition for review within 30 days. 39 U.S.C. 3663. Respectfully submitted, /s/ Michael J. Elston Michael J. Elston Chief Counsel Appellate and Commercial Litigation

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