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the Order notes that, after the Commission proposed tougher
rules, the stocks of telecommunications companies
outperformed the broader market. Order ¶ 360. This might
be interesting if the Commission had performed a
sophisticated analysis trying to hold other factors constant. In
the absence of such an analysis, the evidence shows only that
the threat of regulation was not so onerous as to precipitate
radical stock market losses. The Order also has a quotation
from the Time Warner Cable COO saying, in response to an
FCC announcement of possible Title II classification
(accompanied by some vague Commission assurances), “So
. . . yes, we will continue to invest.” Id. n.986 (emphasis
added by the Commission). Citation of this remark would be
an apt response to a strawman argument that there would have
been no investment in broadband if the new rules had always
applied, but not to the argument that a significant portion of
the current investment was made in reliance on the old
regime. Further, it is reasonable to expect that corporate
executives—with their incentives to enhance the firm’s
appearance as an attractive investment opportunity and thus to
keep its cost of capital down—would take the most favorable
view of a new policy consistent with their obligations to
investors not to paint too rosy a picture.
A more important (and logically prior) question is why
this evidence matters at all. I take Fox’s position on reliance
interests to be addressed to both fairness and efficiency. If a
regulatory switch will significantly undercut the productivity
and value of past investments, made in reasonable reliance on
the old regime, rudimentary fairness suggests that the agency
should take that into account in evaluating a possible switch.
And a pattern of capricious change would undermine any
agency purpose of encouraging future investment on the basis
of new rules. But the effect of past policy on past investment
is quite different from future levels of investment. For
example, the Environmental Protection Agency’s new
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