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"Well, it may be all right in practice, but it will never work in theory." -- Warren Buffett on how the academic community regards his investment approach.The Phoenix Center apparently thinks their latest paper is so good they named it three times. "Jobs, Jobs, Jobs" is a frothy mix of algebra and math jargon ("a 2 × 1 speed of convergence parameter vector, C is a matrix that defines the contemporaneous structural relationship among employment and investment expenditures, and et = [e1,t e2,t]' is a vector of mutually orthogonal structural shocks to these variables") apparently proving that investment creates jobs (or, "we have a one-way causal relationship, in a Granger causality sense, flowing from changes in capital expenditures to jobs"). So far, so obvious. Less well supported is the headline of the accompanying (mercifully equation-free) press release "FCC's Regulatory Agenda May Have Serious Adverse Impacts on New Job Creation.” Perhaps there is a typo, as for all the evidence in the paper, an equally appropriate title would be "FCC's Regulatory Agenda May Not Have Serious Adverse Impacts on New Job Creation." In fact, maybe we could just compromise and agree on an alternative bipartisan title: "23 Pages of Theory Actually Says Nothing at All About the Practical Effect of FCC's Agenda on New Job Creation."Indeed, rather than just asserting that "regulatory proposals under consideration at the FCC could have significant adverse affects on employment" our friends at the Phoenix Center might be well advised to descend from theory-world to look at the actual, concrete actions taken by this Commission over the last few months. FCC decisions in the Harbinger transaction and the Verizon-Frontier merger are already catalyzing billions of dollars in private investment and creating thousands of jobs. The FCC unleashed new spectrum for Super Wi-Fi technology that could enable entire new industries and grow America’s economy. And FCC actions on tower siting and pole attachments cut costs and red tape, making it easier for companies like AT&T and Verizon to invest in new infrastructure.While it would no doubt be fun to wander over to the Phoenix Center to sip lattes while using "the estimates from the vector error correction model [to] conduct a variety of simulations to measure the effect on jobs from a change in capital expenditures," this Commission would rather do the hard work of implementing real-world policies that help incumbents and innovators create real jobs and investments to strengthen our nation's broadband economy today and for the future.
While we always welcome the opportunity to sit down with our good friend Dr. de Sa to enjoy a beverage of his choice, we would like to make clear that our analysis was never meant to take away from the good work the FCC has done to develop and implement a truly excellent National Broadband Plan. As we and others have pointed out, the FCC risks sabotaging its own efforts by trying to impose common carrier regulation on broadband transport. Our paper simply provides an econometric multiplier to measure the effect of these proposed regulations on jobs, finds this effect to be significant, and will serve to undermine any good that they’ve done.
But Larry, your paper makes the leap of faith that returning last mile broadband transport back under a light TItle II umbrella will harm investment. You just assert it. You don't even note that the enterprise broadband market, one of the most competitive sectors in telecom, is today operating under Title II, yet investment there is more robust than in the duopoly residential broadband market.Larry, you are funded by AT&T and Verizon, and support their agenda. Even when their agenda was the total opposite (during the MCI, AT&T CLEC days) you supported the opposite policies you support now. You used to be a huge fan of Net Neutrality and open access policy, but now you are not. In short, of all the coin-operated shops in DC, yours has the least credibility. Verizon and AT&T can pay you and Dr. Ford close to $1 million a year for your econometric obviousness, but it can't hide the fact that your flip-flopping has made you the butt of jokes in this town.
We believe that if more folks focus on the merits of the work, rather than engage in ad hominem attacks, then the policy process would be far more constructive and civilized. By the way, if anyone wishes to provide a meaningful commentary on the merits of a Phoenix Center paper, we have a long-standing policy to post such comments on our webpage and provide a response, if necessary.
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