Postal Regulatory Commission Submitted 12/26/2013 8:00:00 AM Filing ID: 88648 Accepted 12/26/2013 BEFORE THE POSTAL REGULATORY COMMISSION WASHINGTON, D.C. 20268-0001 COMPETITIVE PRODUCT LIST ) Docket No. MC2013-57 ADDING ROUND-TRIP MAILER ) COMPETITIVE PRODUCT PRICES ) Docket No. CP2013-75 ROUND-TRIP MAILER (MC2013-57) ) SUPPLEMENTAL COMMENTS OF GAMEFLY, INC. ON USPS PROPOSAL TO RECLASSIFY DVD MAILERS AS COMPETITIVE PRODUCTS David M. Levy Matthew D. Field Robert P. Davis VENABLE LLP 575 7th Street, N.W. Washington DC 20004 (202) 344-4800
[email protected] Counsel for GameFly, Inc. September 12, 2013 (refiled December 26, 2013) CONTENTS INTRODUCTION AND SUMMARY ..................................................................................1 ARGUMENT .....................................................................................................................5 I. THE POSTAL SERVICE HAS FAILED TO SHOW THAT COMPETITION FOR THE ENTERTAINMENT CONTENT OF RENTAL DVDS, EVEN IF EFFECTIVE TO CONSTRAIN THEIR DELIVERED PRICE, WOULD EFFECTIVELY CONSTRAIN THE PRICE OF THE MAIL INPUT SUPPLIED BY THE POSTAL SERVICE. ..............................................................5 II. THE POSTAL SERVICE’S OWN PRICE ELASTICITY DATA CONFIRM THE ABSENCE OF EFFECTIVE COMPETITION FOR THE MAIL INPUT SUPPLIED BY THE POSTAL SERVICE. ............................................................13 III. THE CORE GROUP OF CONSUMERS WHO STILL RENT DVDS BY MAIL DO NOT REGARD THE “DIGITIZED ENTERTAINMENT CONTENT” AVAILABLE FROM OTHER CHANNELS AS AN ACCEPTABLE