Ganesh Sitaraman (Vanderbilt Law School) has posted Public Utility Law as Anti-Oligarchy Regulation, Vanderbilt Law Research Paper (forthcoming), on SSRN. Here is the abstract:
In the last decade, there has been increasing concern that the United States is becoming, or is already, an oligarchy. In particular, there are growing concerns about “tech oligarchy” and about the wealthiest people in the world wielding political power to favor themselves and their friends. During this same time period, there has also been a revival in the study of networks, platforms, and utilities (NPU) law, often known as public utility law or regulated industries law. My aim in this Essay is to bring together these two developments and to show that NPU law is an essential form of anti-oligarchy regulation. Scholars have connected NPU law to democracy, republicanism, and the control of economic power in general. But they have not shown how these arguments have played out historically, spelled out the mechanisms by which NPU law advances anti-oligarchy goals, or addressed common counterarguments. To show the relationship between NPU law and anti-oligarchy vividly, this Essay offers the debate over the Interstate Commerce Act of 1887 as an illustration. As Part I explains, participants in the debates over federal regulation of the railroads regularly saw and described their aims in political economy terms and linked specific NPU tools to their potential to redress or prevent oligarchic behaviors. Part II then turns to the specific mechanisms by which NPU law addresses oligarchic tendencies. First, contra the goal of oligarchs to defend and expand their income and wealth, NPU rules limit income and wealth accumulation directly and indirectly. Both rate regulation and market structure rules serve this function. Second, NPU rules prevent gatekeeping and economic coercion. Market structure and nondiscrimination rules limit the ability of oligarchs to curtail private freedoms, pick winners and losers, and determine the fates of entire businesses. Third, NPU law disperses economic activity, further deconcentrating economic and political power, through a combination of universal service requirements and market structure rules that deliberately prevent consolidation. Finally, NPU law’s market structure rules also shape the political ecosystem of interest groups. In a pluralistic, republican system, this is critical because the structure of the interest group ecosystem can have a significant impact on policymaking. Enumerating these mechanisms demonstrates some of the political and “small c” constitutional benefits of this body of law and shows how these economic policies can have political consequences. Part III turns to some of the more notable objections. There is a long tradition of scholars concerned that NPU regulations contribute to oligarchy, rather than forestall it, largely through regulatory capture. I address these criticisms, arguing that while they channel real concerns, they do so without comparison to the appropriate baseline, which is an unregulated monopolist with control over the utility enterprise.
Highly recommended.