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broadband. The positive effect is expected from the way in
which, in the Commission’s eyes, the new rules encourage
demand for and supply of content, which it believes will
indirectly spur demand for and investment in broadband
access.
The direct effect, of which the Commission doesn’t really
speak, seems unequivocally negative, as petitioner United
States Telecom Association (“USTA”) argues. USTA Pet’rs’
Br. 4 (“Individually and collectively, these rules will
undermine future investment by large and small broadband
providers, to the detriment of consumers.”); see also id. 54.
Besides imposing the usual costs of regulatory compliance,
the Order increases uncertainty in policy, which both reason
and the most recent rigorous econometric evidence suggest
reduce investment. Scott R. Baker, Nicholas Bloom & Steven
J. Davis, Measuring Economic Policy Uncertainty, 131
QUARTERLY JOURNAL OF ECONOMICS (forthcoming 2016).
(Though the paper is focused on economy-wide policy
uncertainty and effects, it is hard to see why the linkage
shown would not apply in an industry-specific setting.) In
fact, the Order itself acknowledges that vague rules threaten to
“stymie” innovation, Order ¶ 138, but then proceeds to adopt
vague rules.
Here, a major source of uncertainty is the Internet
Conduct Standard, which forbids broadband providers to
“unreasonably interfere with or unreasonably disadvantage”
consumer access to internet content. 47 C.F.R. § 8.11. All of
these
terms—“unreasonably,”
“interfere,”
and
“disadvantage”—are vague ones that increase uncertainty for
regulated parties. Indeed, the FCC itself is uncertain what the
policy means, as indicated by the FCC Chairman’s admission
that even he “do[esn’t] really know” what conduct is
proscribed. February 26, 2015 Press Conference, available at
http://goo.gl/oiPX2M (165:30-166:54).
The Commission
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