In late June, Sen. Mike Lee (R-Utah) sent a letter to Assistant Attorney General Jonathan Kanter arguing that the U.S. Justice Department (DOJ) needs to investigate the Tennessee Valley Authority (TVA) and its local power companies (LPCs) on grounds that abuses of the pole-attachment process appear to be slowing broadband deployment.
Given that Congress has prioritized subsidizing broadband access and deployment through the $42.5 billion Broadband Equity, Access, and Deployment (BEAD) program, it makes little sense to allow these entities to effectively thwart those goals with excessively high pole-attachment rates and refusals to deal with broadband providers on reasonable and nondiscriminatory terms.
Together with my International Center for Law & Economics (ICLE) colleagues Geoffrey Manne and Kristian Stout—respectively, ICLE’s president and director of innovation policy—we examine these issues in a newly published ICLE issue brief. Our brief argues that Sen. Lee is onto something with his letter, but that there may be legal obstacles to using antitrust law against the TVA and its LPCs.
Two notable hurdles to DOJ action here are the doctrines of sovereign immunity and state-action immunity. We argue that policymakers (i.e., Congress) should clarify that antitrust law does apply to government entities when they act pursuant to their “commercial function” or as “market participants.”
Moreover, we make the case that state-owned enterprises like the TVA and its LPCs have both incentive and a unique ability to act anti-competitively by charging excessive rates or refusing to deal with broadband providers who wish to attach to their poles. This is especially pertinent given that many LPCs have entered (or are contemplating entering) into the provision of municipal broadband, where they would then be direct competitors with private broadband providers.
We also argue that Congress should consider giving the Federal Communications Commission (FCC) jurisdiction over the TVA and its LPCs when it comes to pole-attachment rates and processes.
For more, see the full issue brief here.
