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Parallels Between the Legal Contestation of Public Electricity and Municipal Broadband

By Asha Bazil

Asha Bazil is a second year City Planning student concentrating in Smart Cities. After graduating from the George Washington University with degrees in economics and international affairs in 2015, she worked in consulting in Washington, D.C., New York, and Medellín. Her current work focuses on leveraging data and technology to support equitable development, as well as to support community advocates in constructing their own narratives. She spends her free time baking, people watching, and collecting too many plants.


[1] Cebul, Brent. “Creative Competition: Georgia Power, the Tennessee Valley Authority, and the Creation of a Rural Consumer Economy, 1934–1955.” Journal of American History105, no. 1 (2018): 45–70.
LEFT: A rural household in the Tennessee Valley circa 1943 where a meter has just been installed to measure electricity delivered from the TVA transmission line in the background. The difference in size and material between the transmission line and the house is stark—visually representing the scale and ambition of the rural electrification project.
Source: Shutterstock


In the United States, the expansion of utility services from the private to the public realm has not been smooth. The most notable public service expansion—that of electricity—emerged in the wake of the Great Depression. The New Deal, responding to the economic crisis, fundamentally altered the role of the US government through a complex series of policies and interventions, enabling programs like rural electrification. Public utility services must continue to evolve in tandem with society, expanding to encompass emerging needs. 

Today, the COVID-19 pandemic shows that reliable internet access is paramount. Without it, working and learning from home, connecting with loved ones, and consulting medical experts may not be possible. To borrow language from New Deal policymakers, access to the internet is “a right of modern citizenship.”[1]  

Several similarities emerge between the expansion of electric grids in the 1930s and 1940s and the expansion of internet services today. The first is that, historically, the policy window for increased government involvement in utility markets was created by catastrophic events—the Great Depression and the COVID-19 pandemic. Second, marginalized groups are consistently left out of private service delivery—rural communities then and now, as well as urban areas that continue to suffer the detrimental effects of redlining and other racially exclusionary policies of the 20th century. 

Third, the arguments opposing increased public intervention in internet service markets are similar to those that were made against intervention in the electricity market. That is, private actors in both markets and both time periods protest public participation and lean on parallel legal arguments. Chief among these is the argument that the government should not be able to compete within private markets, regardless of inefficiencies present in the private markets. 

This paper addresses the complexity and conflict regarding the actors and methods of internet service provision—specifically, the private legal action brought against state actors as a means of combating public involvement in electricity and internet service. It begins by examining the municipal internet service achieved in Chattanooga, Tennessee through favorable rulings in lawsuits brought by private internet service providers (ISPs) and how these victories did not establish a meaningful precedent for future municipal internet services. It then unpacks the legal battles fought in the 1930s over the expansion of rural electricity by the Tennessee Valley Authority (TVA), which was eventually affirmed by the US Supreme Court. Finally, this paper identifies that explicit legislative and judicial preemption of states’ ability to restrict municipal internet service is necessary for the meaningful expansion of equitable internet access. 

LEFT: A poster for the Rural Electrification Administration
Source: Wikimedia Commons
[2] TCTA v. ELECTRIC POWER BOARD, No. M2008-01692-COA-R3-CV (Tenn. Ct. App. Aug. 26, 2009)

[3] Subramanian, Samanth. “The Best Broadband in the US Isn't in New York or San Francisco. It's in Chattanooga.” Quartz.

[4] Taplin, Jonathan. “Chattanooga Has Its Own Broadband-Why Doesn't Every City?” The Daily Beast. The Daily Beast Company, July 24, 2017.

[5] Subramanian, S.
[6] Tenn. Code § 7-52-601. Authority to operate services. (n.d.).

[7] Tenn. Code § 7-52-603. Separate division to provide services –Costs and charges. (n.d.).
 [8] (ID at page 3)

[9] Comcast v. Elec. Power Bd., No. E2008-01788-COA-R3-CV (Tenn. Ct. App. May. 13, 2009)

[10] Comcast of the South v. Elec. Power Bd., 2009 Tenn. App. LEXIS 212, 2009 WL 1328336 (Court of Appeals of Tennessee, At KnoxvilleMay13, 2009, Filed).
[11] Legal Information Institute. “Preemption.” Cornell University.

[12] Congressional Research Service. “Federal Preemption: A Legal Primer.” July 23, 2019.
[13] Subramanian, S.

The Road to Municipal Broadband in Chattanooga 


Chattanooga, Tennessee provides publicly operated cable and internet service that is much faster and cheaper than the services offered by private ISPs in the region. The legal path to public internet service was challenged due to the potential subsidization of the public internet service by the public electric service revenue, something that is prohibited by Tennessee state law. A federal court of appeals affirmed that the municipality of Chattanooga could provide internet service, timidly introducing the notion that federal authority can preempt restrictive state laws. 

The Electric Power Board (EPB) is a municipal utility that was the pivotal actor in the creation of Chattanooga’s municipal broadband. The EPB provided electric power to Chattanooga, most of Hamilton County, and part of eight other Tennessee counties.[2] In response to power outages caused by damage to above ground electrical infrastructure during storms, the EPB began to revamp the grid in the early 2000s. The EPB moved electrical infrastructure underground, making it quite simple to build out a fiber-optic network in tandem with the updated electric grid.[3] This would have placed fiber-optic cable less than one hundred feet away from 50,000 homes.[4] The installation of fiber-optic cable, the main capital investment needed to begin providing internet service, would create the infrastructure for internet access to essentially mirror electrical access in the region. The EPB submitted a plan to do just this in 2007. 

The Tennessee Cable Telecommunications Association (TCTA), which includes the two major ISPs operating in Chattanooga: Comcast and AT&T,  sued the city in response.[5] Under Tennessee statute 7-52-601(a),


A municipality operating an electric plant…has the power and is authorized within its service area….to acquire, construct, own, improve, operate, lease, maintain, sell, mortgage, pledge or otherwise dispose of any system, plant, or equipment for the provision of cable service,… Internet services, or any other like system, plant, or equipment within or without the corporate or county limits of such municipality, and, with the consent of such other municipality, within the corporate or county limits of any other municipality.[6] 

However, the authorization for The EPB to provide internet service is restricted in a few key ways by Tenn. Code Ann. § 7-52-603(a)(1)(A).[7] 

First, there is a funding restriction that prevents the utility division (the electrical service arm of The EPB) from funding the operation of the cable or internet network (the new service being proposed). That is, the restriction prohibits cross subsidy of the internet service division by the utility operations division. However, the utility operations may lend money to the cable/internet division for capital expenses–including the initial installation of the fiber. Second, there is a complex statutory procedure that must be followed for an electric operation to provide cable and internet service. This includes filing a detailed business plan, feasibility analysis, and notice of intent. The EPB followed this procedure, and had its plan approved on September 5, 2007 by Chattanooga’s city council. 

In TCTA v. EPB, the TCTA alleges that: “the Plan underestimates operating costs while overestimating revenue. Since the cable/internet service will not be able to generate sufficient revenue to repay the loans [from the electric division], TCTA argues, the Plan violates the prohibition of cross-subsidy in Tenn. Code Ann. § 7-52-603(a)(1)(A).” [8] This case was dismissed by the Chancery Court for Davidson County, and the dismissal was affirmed by the Court of Appeals of Tennessee, at Nashville, at which time Comcast filed an identical lawsuit in the Davidson County Chancery Court – Comcast of the South v. Electric Power Board of Chattanooga.[9] The Trial Court dismissed this case as well (the dismissal again upheld and affirmed by the Court of Appeals), holding that “because the Plan at issue had specifically been approved by the federal Tennessee Valley Authority, the state law claim was preempted. Because the state law claims were not ripe for review and, even if they were, because they were preempted by federal law, the Trial Court granted The EPB's motion to dismiss.”[10] 

            This decision is notable as it has the potential to provide support for other municipalities seeking to provide internet services, but it ultimately delivers a muddled path forward. Broadly, federal preemption refers to the invalidation of a US state law that conflicts with federal law. Federal preemption applies regardless of where the conflicting laws come from – be it legislatures, courts, administrative agencies, or constitutions.[11] While the Comcast of the South v EPB decision introduces federal preemption of state restrictions on municipal broadband service, the preemption is implied. That is, nothing in the federal legislation creating the TVA gives it explicit power to preempt state laws. The shortcoming of implied preemption is that it presents more room for interpretation. One interpretation is that preemptive power can be exercised “where states attempt to regulate a field where there is clearly a dominant federal interest.”[12] A litmus test commonly used to determine whether federal preemption is valid is whether the federal law “occupies the field” that the state legislation is attempting to regulate, leaving “no room” for the state law.   

Identifying the TVA’s approval of The EPB’s Plan as implied preemption of Tennessee state law provides a new perspective from which to examine state-delivered services. The TVA is commonly associated with its historic role during the New Deal, yet it still operates as a federally-owned electric utility corporation – essentially a regional planning agency of the federal government. Leveraging the TVA, or indeed creating new regional planning agencies that hold federal authority, is  one way for the federal government to keep the door open for municipal broadband if its authority explicitly preempts State laws related to internet service provision. 

After the EPB of Chattanooga won its case, it began constructing the fiber-optic network in 2009, with the help of federal loans and grants. Notably, this amounted to the federal public subsidization of a utility service, which was distinctly allowed while internal EPB subsidization was distinctly not. The EPB was able to offer one gigabyte broadband speeds for $70 per month almost immediately after network completion. It was only in 2015 that Comcast finally offered something that could compare to that speed – and still at a higher price point. It was estimated that the EPB would need 30,000 customers to break even annually. As of April 2021, it has 120,000.[13] This huge increase in customers is indicative of the gap between what private ISPs can provide and the outstanding demand in underserved regions. 

LEFT: A spool of fiber optic cable about to be installed underground. The physical placement of fiber is the most capital-intensive portion of internet service expansion projects.
Source: Shutterstock
[14] Verizon v. FCC, 740 F.3d 623, 408 U.S. App. D.C.92, 2014 U.S., 59 Comm. Reg. (P & F) 975 (United States Court of Appeals for the District of Columbia Circuit January 15, 2014, Reissued).

[15] Advanced telecommunications incentives, 47 USCS § 1302 (Current through Public Law 117-79, approved December 23, 2021, with a gap of Public Law 117-58. Title 26 provisions are current through Public Law 117-79.).

[16] Federal Communications Commission FCC 21-25 before the ...(n.d.). Retrieved December 2, 2021, from

[17] Brodkin, Jon. “FCC overturns state laws that protect isps from local competition”. Ars Technica.February 26, 2015.
[18] Tennessee v. FCC, 832 F.3d 597, 2016 U.S. 2016 FED App. 0189P (6th Cir.), 65 Comm. Reg. (P & F) 330 (United States Court of Appeals for the Sixth CircuitAugust 10, 2016, Filed)..

Blocked from Expanding 

 The EPB’s success within its electric service area was followed by requests from surrounding communities for EPB internet service. Due to the aforementioned statute, (7-52-601(a)), the EPB could only provide internet service within its electrical service area. An opportunity arose in 2014 when federal appeals judge Laurence Silberman wrote in an opinion that the FCC has the authority to preempt “state laws that prohibit municipalities from creating their own broadband infrastructure to compete against private companies.” [14] This opinion supported the broader holding that the FCC is vested with affirmative authority to enact measures encouraging the deployment of broadband infrastructure, as described in the United States Code (U.S.C.) pertaining to telecommunications.[15] 

Following this ruling, the EPB petitioned the Federal Communications Commission to preempt the Tennessee statute prohibiting its internet service expansion. Per the Telecommunications Act of 1996, the FCC is required to encourage the expansion of broadband to all citizens by using “measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.”[16] Leveraging this barrier removal ability, recently upheld by the 2014 ruling, the FCC voted to preempt the Tennessee law as well as a similar law in North Carolina in February of 2015. Before the vote, FCC official Gregory Kwan stated that “EPB is an island of competitive high speed broadband service surrounded by areas for the most part with single or no provider of advanced broadband.”[17] 


However, the hopes of expanding this island of broadband were short-lived, as the US Sixth Circuit Court of Appeals overturned the FCC preemption in August 2016. The court held that the Telecommunications Act of 1996 did not give the FCC the power to preempt State laws, and that “the FCC order essentially serves to re-allocate decision-making power between the states and their municipalities.” [18] As a result the EPB’s ability to expand is currently at a stalemate over where the decision to allow municipally-provided broadband should be made. The TVA, a regional planning entity that holds federal authority, can preempt state laws in Tennessee. On the other hand, The FCC, a federal entity that holds federal authority cannot preempt state laws in Tennessee because it interferes with the power dynamic that exists between the state and its municipalities. 

The difference between the EPB’s win in the 2000s and its loss in the 2010s lies in the distinction between which federal authorities have the power to preempt state laws. TVA approval can — hypothetically, as the case was not ripe — override state limits on municipal broadband, but the direct preemption of limitation laws by the FCC is not acceptable. The mixed precedents from various courts demand that a clear standard be set. This can be done through a combination of judicial and legislative actions at the federal level that explicitly preempts states from prohibiting municipal internet service. The use of the TVA to expand electricity access in the 1930s is a model for how federal authority can be leveraged. In that case, it took a Supreme Court decision to clarify the role of the federal government in electric utility service. 

TVA_stamp copy.png
LEFT: A stamp celebrating the 50th anniversary of the Tennessee Valley Authority, displaying a dam and transmission line. The imagery used on this stamp commemorates the legacy of TVA electrification half a century after its success. Source: Shutterstock
[19] Cebul, B
[20] Cebul, B.
[21] Ashwander v. TVA,297 U.S. 288, 56 S. Ct. 466, 80 L. Ed. 688, 1936 (, 1936 ).
[22] ID at page 10)
[23 + 24] Tennessee Electric Power Co. v. Tennessee Valley Authority, 306 U.S. 118, 59 S. Ct. 366, 83 L. Ed. 543, 1939 (, 1939 ).
[25] Cebul, B.
[26] Stewart, Emily. “Give Everybody the Internet.” Vox. Vox, September 10, 2020.
[27] The United States Government. “Fact sheet: The American jobs plan.”The White House.May 4, 2021.

The TVA’s Legal Journey and Lessons for Today 

The backlash to, and eventually affirmation of, TVA-driven electrification was based on an evaluation of whether the profits of private utility providers took priority over the larger societal goals of rural electrification. It also illustrates that a similar process—an explicit federal action that serves to reduce the power of private ISPs within state legislatures—is likely a necessary component for achieving universal internet access. 

The Tennessee Valley, home to Chattanooga, is not a new site for fundamental challenges to the infrastructure accessibility status quo. The Tennessee Valley Authority (TVA) was created as a New Deal era experiment in federally subsidized electricity generation and distribution, which facilitated the expansion of electricity into rural areas. The goal of New Deal policymakers in creating the TVA was to “diffuse an emerging set of social goods—electricity, consumer appliances, and, they hoped, higher-wage industrial employment—that they believed were rights of modern citizenship.”[19] At the time of the TVA’s creation, in 1933, only 9 percent of the nation’s 6.5 million farms were electrified. Private utilities had quite literally left rural Americans in the dark, mainly because they thought it to be unrealistically expensive to connect them to the grid. The stark divide between urban and rural electrical access is what spurred the government’s involvement in the electric market. Brent Cebul writes, “New Deal officials and private utility officers diagnosed an almost total stalemate in rural markets: energy distribution and electric consumer goods were prohibitively expensive and there seemed little elasticity in the price demand for energy.”[20] This picture of electrification in the 1930s should sound familiar. In fact, it is akin to the “island” of quality, affordable internet access created by Chattanooga, contrasting sharply with the patchwork of connectivity in rural municipalities surrounding the city. 

In the 1930s, the TVA faced numerous lawsuits in local courts, with two cases making it to the US Supreme Court. The first Supreme Court case was Ashwander et al. v. Tennessee Valley Authority (TVA), in 1936.[21] The plaintiffs were dissenting stockholders of the Alabama Power Company, which had entered into a contract with the TVA. The contract “expanded power lines from Wilson Dam to seven surrounding counties with a population of 190,000 and ten thousand electrical customers.”[22] A district court ruled in favor of the stockholders, but the Court of Appeals for the Fifth Circuit reversed the decision, setting the stage for a Supreme Court hearing in 1935. While the plaintiff presented a broad argument that the TVA had no legal right to exist, the Supreme Court narrowly ruled on the constitutional authority for construction of the dam and for the sale of the energy generated by the dam. The dam had been constructed in the exercise of the war and commerce powers of Congress. Article IV, Section 3 of the US Constitution granted Congress the authority to dispose of property constitutionally acquired by the US—in this case, the energy from the dam. 

The Supreme Court did not affirmatively uphold the legality of the TVA’s presence in the energy market until 1939, in Tennessee Electric Power Company v. TVA.[23] It specifically stated that  “the validity of a statutory grant of power cannot be challenged merely because its exercise results in harmful competition. The damage is “damnum absque injuria,”[24] that is, the TVA caused damage or loss to the plaintiff, but did not injure them by exercising their grant of power to distribute electricity. It should be noted that damage to private profits is not a grievance explicitly employed by ISPs today. Instead, their legal arguments and power derive from state legislation meant to curtail public competition and thus protect profits. This further underscores the necessity of both legislative and judicial action to create federal preemption of local restrictions on municipal broadband. 

Public receptiveness to government involvement in the electricity market, even among proponents of free enterprise, may have been the key to the TVA’s legal success. This was caused in part by the dramatic price disparities between public and private electricity costs and by severely restricted service areas that made it difficult to defend the exclusion of the TVA from the market. John H. Fahey, a former president of the US Chamber of Commerce said that “as a businessman I would prefer private ownership, but when the public cannot obtain the best possible service at the lowest possible cost, the advantages of private ownership disappear.”[25] The same could be said about the state of internet service today. 

The chief private sector rival of the TVA was Commonwealth and Southern (C&S). C&S was a private utility holding company that led the legal charge against the TVA through their subsidiary companies, which included the Alabama Power Company. When “faced with the TVA’s publicly subsidized prices….C&S began lowering all of its subsidiaries” rates as well. While consumers paid less, the company made up the difference through greater usage, which, in February 1934, was up 15.3 percent over the previous year. It is evident that the expansion of the market benefited the private utility, as well as the newly connected consumers. 

Legislative and Judicial Action 

Reflecting on the process of rural electrification in the 1930s and 1940s offers hope that seemingly hegemonic private actors can be counteracted in their efforts to keep publicly subsidized utilities out of the market. It required strong federal legal action—that is, a ruling from the Supreme Court instead of implied preemption by the FCC, TVA, or another federal agency. As with most Supreme Court rulings, the one that opens the door for municipal broadband will likely arrive during a policy window when the country is ready to accept the ruling and the precedent created. 

Indeed, this time has arrived. The Chattanooga public internet service nearly eliminated the disparity in internet access by race within the service area, and it ensured that customers’ service was not disrupted by inability to pay due to pandemic-related economic shocks. During the pandemic, the EPB set up over 130 Wi-Fi hotspots and initiated a program to provide internet service at no cost for economically-disadvantaged students. In many instances, the EPB replaced the internet service for families whose Comcast service had been cut off during the pandemic.[26] 

The Biden Administration’s American Jobs Plan (AJP) prioritizes “bring[ing] affordable, reliable, high-speed broadband to every American through a historic investment of $100 billion.”[27] This investment will go towards the creation of broadband infrastructure, not to subsidize the inflated cost of private internet service. The AJP specifically discusses removing barriers to municipal providers and requiring clarity on pricing from private and public providers. If this investment is to be effective, the legislation that authorizes it must also create explicit preemption of local barriers to public internet service. The legislation must be subsequently supported by the Supreme Court when it is inevitably challenged. 

The judges that comprise today’s Supreme Court might not be amenable to this shift in power from private companies and state legislatures to municipalities. However, the effects of the pandemic, combined with new federal funding opportunities, make this a strategic time to rethink the role of public internet service in the United States. A fundamental shift towards the public provision of internet service will bring the entire country online, just as public power electrified America nearly a century ago. 

Works Cited 

§ 1302. Advanced telecommunications incentives, 47 USCS § 1302 (Current through Public Law 117-79, approved December 23, 2021, with a gap of Public Law 117-58. Title 26 provisions are current through Public Law 117-79.).

Ashwander v. TVA, 297 US 288, 56 S. Ct. 466, 80 L. Ed. 688, 1936 U.S. LEXIS 947 (Supreme Court of the United States February 17, 1936 ).

Brodkin, Jon (2015, February 26). FCC overturns state laws that protect isps from local competition. Ars Technica. Retrieved from

Cebul, B. (2018). Creative competition: Georgia Power, the Tennessee Valley Authority, and the creation of a rural consumer economy, 1934–1955. Journal of American History, 105(1), 45–70. 

Comcast of the South v. Elec. Power Bd., 2009 Tenn. App. LEXIS 212, 2009 WL 1328336 (Court of Appeals of Tennessee, At KnoxvilleMay 13, 2009, Filed).

Comcast v. Elec. Power Bd., No. E2008-01788-COA-R3-CV (Tenn. Ct. App. May. 13, 2009) 

Federal Communications Commission FCC 21-25 before the ... (n.d.). Retrieved December 2, 2021, from

Patricia J. Cottrell, P. (2009, August 26). TCTA V. Electric Power Board. Legal research tools from Casetext. Retrieved December 2, 2021, from

Reagan, P. D. (2018, March 1). Ashwander et al. v. Tennessee Valley Authority (TVA). Tennessee Encyclopedia. Retrieved December 2, 2021, from

Stewart, E. (2020, September 10). Give everybody the internet. Vox. Retrieved from

Subramanian, S. (n.d.). The Best Broadband in the US isn't in New York or San Francisco. it's in Chattanooga. Quartz. Retrieved December 2, 2021, from

Taplin, J. (2017, July 24). Chattanooga has its own broadband-why doesn't every city? The Daily Beast. Retrieved from

Tenn. Code § 7-52-601. Legal research tools from Casetext. (n.d.). Retrieved from

Tenn. Code § 7-52-603. Legal research tools from Casetext. (n.d.). Retrieved from

Tennessee Electric Power Co. v. Tennessee Valley Authority, 306 U.S. 118, 59 S. Ct. 366, 83 L. Ed. 543, 1939 U.S. LEXIS 973 (Supreme Court of the United States January 30, 1939 ).

Tennessee v. FCC, 832 F.3d 597, 2016 U.S. App. LEXIS 14681, 2016 FED App. 0189P (6th Cir.), 65 Comm. Reg. (P & F) 330 (United States Court of Appeals for the Sixth CircuitAugust 10, 2016, Filed).

TCTA v. ELECTRIC POWER BOARD, No. M2008-01692-COA-R3-CV (Tenn. Ct. App. Aug. 26, 2009) 

The United States Government. (2021, May 4). Fact sheet: The American jobs plan. The White House. Retrieved from

Verizon v. FCC, 740 F.3d 623, 408 U.S. App. D.C. 92, 2014 U.S. App. LEXIS 680, 59 Comm. Reg. (P & F) 975 (United States Court of Appeals for the District of Columbia CircuitJanuary 15, 2014, Reissued).

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