Age of Uncertainty Continues

The most oft-repeated word in my 2010 interviews was "uncertainty." What's holding the recovery back? "Uncertainty." What's the big drag on job creation? "Uncertainty." What's preventing all that sidelined money from getting into the game? "Uncertainty."

What has caused the uncertainty is the litany of federal legislation passed in 2010, and the government by administrative fiat that we are likely to witness in 2011. It's not the health care law itself that causes the trepidation, but the federal bureaucracy's seemingly eternal rule-making process. Ditto for the Dodd-Frank financial reform law.

At some point, the uncertainty cloud cover will pass, but methinks President Obama first will have to light a fire under his bureaucracy. Perhaps he is trying to do that with his recent executive order to address regulations that hamper economic growth, but saying and doing are two different things.

Case in point: a provision of the health care law that was supposed to be in clearer focus by now, but instead a moratorium has postponed the implementation of non-discrimination rules that apply to fully insured health plans. The rules were supposed to go into effect for non-grandfathered health plans those created after passage of the law on March 23, 2010. The IRS waited until late December to issue a notice that indefinitely delayed implementation of the applicable section, according to attorney Michael Taibleson, a shareholder with Whyte Hirschboeck Dudek.

New rules are needed to replace archaic ones that are hard to apply, given that benefits had to be identical for certain highly compensated individuals and non-highly compensated individuals. Prior to the moratorium, many employers had taken steps to implement the rules effective Jan. 1, only to have the rug pulled out. "To tell executives, with a few days left in the year, they could reintroduce an executive health care program for 2011, provided they could get it done before Jan. 1, after having already changed the health care coverage, and after individuals made new FSA elections … I don't know," Taibleson said.

Sometimes, the government tries to play Sir Galahad when there isn't a compelling reason, or the legal authority, to do so. The Federal Communications Commission's new net neutrality rules – which supposedly address non-discrimination, transparency, and access to lawful content and devices – strike me as a solution in search of a problem. Since these new rules aren't exactly set in stone – Congress and the Courts are likely to take them up – they practically invite more layers of uncertainty. But no matter, FCC Secretary Julius Genachowski, after having been admonished by the Courts to back off, bulldozed ahead.

Perhaps the Courts chastened him just enough to draft rules that wouldn't choke off innovation. Drew Petersen, director of legislative affairs and public relations for TDS Telecom, does not believe the new rules undermine TDS Telecom's flagship commercial product, the managed Internet protocol services that integrate broadband and voice service on your desktop, but the Commission's deliberations did cause some concern. "If the FCC would have said to curtail those activities, that would have had a chilling effect on our future revenue growth and product development activities," Petersen said.

The notion that any intervention was necessary is symbolic of the uncertainty problem. There already are laws on the books the FCC can use to correct provider misbehavior when they try to disrupt someone's network or stifle the availability of an application. The commercial Internet is about 15 years old, there have been less than a handful of violations, and they have been dealt with either by the FCC or the courts.

Barack Obama should be presiding over a booming, job-creating economy by now. He still might, if he's really serious about getting the bureaucracy out of the way.

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