EI News and Notes

Economists Ink: A Brief Analysis of Policy and Litigation

International Tribunal Adopts Proposed Remedy In Lumber DisputeAn international tribunal ruled for the United States in a dispute with Canada over the proper remedy for Canada’s breach of the 2006 Softwood Lumber Agreement (SLA). The decision adopts a remedy laid out in the expert report of EI Principal Jonathan Neuberger. According to this remedy, Canada must collect an additional 10 percent export charge on its softwood lumber shipments from four eastern Canadian provinces until C$68.26 million has been accumulated. Jonathan Neuberger was assisted in the case by EI Senior Vice President Robert Stoner and EI Vice President Henry McFarland.Oasis Pipeline Prevails in FERC InvestigationThe Federal Energy Regulatory Commission (FERC) alleged that Oasis Pipeline gave undue preferences to a marketing affiliate and overcharged for transportation of interstate gas. FERC proposed to assess a civil penalty of $15 million and disgorgement of $267,122 in unjust profits. EI Principal John R. Morris testified that the alleged undue discrimination was a result of the Oasis dual contract program, dual contract holders were not similarly situated to other shippers, and Oasis did not overcharge for transportation of interstate gas. FERC later accepted a settlement with no admission of wrongdoing by Oasis, no civil penalty, and no disgorgement.Reforming the Universal Service High Cost FundEI Special Consultant Scott J. Wallsten testified before the House Energy and Commerce Committee, Subcommittee on Communications, Technology, and the Internet on reforming the universal service high-cost fund. Subsidies from the high-cost fund to rural telecommunications providers have increased from $1.7 billion in 1999 to nearly $5 billion today. Wallsten recommended moving from the current inefficient system to one that awards subsidies through competitive bidding. Such reverse auctions for universal service have been used successfully in other countries and could reduce subsidies and benefit consumers.