ML19329E751

Reply Re Issues Other than Disqualification Raised by Applicant 720509 Answer.Util Culpable for Situation Inconsistent W/Antitrust Laws Re Marketing Electric Power. Certificate of Svc & Supporting Matl Encl

ML19329E751
Person / Time
Site:	Midland
Issue date:	06/09/1972
From:	Brand W, Comegys W, Saunders J JUSTICE, DEPT. OF
To:	US ATOMIC ENERGY COMMISSION (AEC)
References
NUDOCS 8006170906
Download: ML19329E751 (62)

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1 i TABLE OF CONTENTS Page I. APPLICANT ERRONEOUSLY CONTENDS THAT THE SCOPE OF PRELICENSING AhIITRUST REVIEW UNDER SECTION 105 c. IS VERY NARROW; NEITHER THE LANGUAGE OF THE STATUTE NOR THE LEGISLATIVE HISTORY OF SECTION 105 c. SUPPORTS THIS VIEW. 1 A. The Statute is clear.. 3 B. The Legislative History Confirms that the Purpose of Section 105 c, was a Broad Prelicensing Antitrust Review 5 1. The 1954 Act 5 2. The 1970 Amendment 8 a. The Department told Congress that it would litigate before AEC issues which might also /be within-other-agencies '. jurisdiction.. 12 b. Congress rejected the~ proposition that the Federal Power Commission should be the sole agency charged with responsibility over bulk power coordination 15 c. When Section 105 c. was amended, attempts were made to narrow its scope of antitrust review but these were rejected.. 16 C. It is Factually Impossible and Legally Incorrect to Isolate the Activities Under the License from Applicant's Ownership and Operation of its Electric Power System and its Power Pooling Activities with Other Bulk Power Sucolv Systems 25 CONCLUSION. 28 II. OIHER MATTERS RAISED BY APPLICANT'S ANSWER. 30 A. Applicant's Allegations that the Department of Justice would Compel it to Discriminate 30 are Incorrect THis DOCUMEiiT CONTAINS L P0OR QUAUTY PAGES .,,c s.,--

3 1 h Page B. The Department takes no Position on Applicant's opposition to Delegation of Review Authority 31 III. REPLY TO APPLICANT'S SPECIFICATION 0F ISSUES AND FACTS 3I t e / e 9 m 'l

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-3 BEFORE THE ATOMIC ENERGY COMMISSION In the Matter of ) CONSUMERS POWER COMPANY ) Docket No. 50-329A ) 50-330A / (Midland Plant, Units 1 and 2) ) REPLY OF THE DEPARTMENT OF JUSTICE ON ISSUES 0THER-THAN DISQUALIFICAT* ION RAISED BY APPLICANT'S ANSWER OF MAY 9, 1972 Pursuant to the provisions of 10 CFR Section 2.706, of the Commission's Rules of Practice, the Uhited States Depart-ment of Justice files this Reply to A' plicant's Answer and p Motion filed May 9,1972.1/ I APPLICANT ERR 0NEOUSLY CONTENDS THAT THE SCOPE OF ~ PRELICENSING ANTITRUST REVIEW UNDER SECTION 105 c. IS VERY NARROW; NEITHER THE LANGUAGE OF THE STATUTE i NOR THE LEGISLATIVE HISTORY OF SECTION 105 c. l SUPPORTS THIS VIEW In its answer, pages 2 and 3, Applicant states its position that: The legislative history of the Act demonstrates j that Congress intended the Commission to consider the' implications, from the standpoint of antitrust i laws and policies, of the const'ruction and operation 1/ Time for reply was extended to May 26, 1972 for reply on the issue of disqualification and until June 9, 1972, on the issues discussed herein. M.* ~, ~ . - + - - -, - -,

of the proposed. facilities only', and not to assume the responsibilities of the Department of Justice and the courts for the enforcement of the antitrust laws with respect to an applicant's overall activities as a utility. Rather, the statute commands that the Commission scrutinize the possible effects of the " activities under the license," and only those activities, in an antitrust context. The licenses applied for in this proceeding would permit applicant to construct and ultimately to operate the Midland units, but no more. The licenses are - not. concerned.with..the... operation of. Applicant's system in a broader context, including other generation, transmission facilities, sales contracts, coordination arrangements and the like. Thus issues relating to coordination, wheeling, pooling, and proposed or existing interconnection agreements, as set forth by the Justice Department, in its advice letter dated June 28, 1971, and the intervention petitions filed by Traverse City et al and Wolverine Electric Cooperative, Inc., are irrelevant to the inquiry which the statuce contemplates, and should not be considered in this proceeding. [ Emphasis added] The test which the Commissicn =ust apply in its prelicensing antitrust review is: whether the activities under the license would create or maintain a situation itconsistent with th'e antitrust laws." 42 U.S.C. 2135. Applicant has disregarded the clear language of that statute, and, without specifying any part of the legislative history which would lend support to its contentions, urges the narrowest interpretation of Section 105 c. Applicant's interpretation would isolate its proposed activities under the license from any relationship with Applicant's other activities, particularly its arrangement for integrating and coordinating its system bulk power supply. 2 P e e n m, ,m6,-o, anw, -, -,,,, - e. y, ,-,,,-n.,, ,, -,,, - ~, - 4 .-,yy-,,,,

s -Applicant proposes to show that, viewed entirely in isolation, .the activities under the license - "to construct and ultimately to operate the N1dland units, but no more" "and only those activities" -- would not be inconsistent with the antitrust laws. Applicant would have the Commission disregard both (1) Applicant's other activities which make possible its activities under the license, and (2). the other activities which Applicant engages in as a result of the market power which the activities under the license will maintain. In this Reply the Department of Justice will show that: (1) The specific wording of Section 105 c. is clear and calls for a different test than that advanced by Applicant; (2) Even if the statutory language of Section 105 c. were-regarded-as-ambiguous or unclear,.the recorded legislative purpose both in 1954 and 1970 is contrary to Applicant's position; and (3) It is factually impossible and legally incorrect ~ to separate the activities under the license from Applicant's system-wide (integrating) and power pooling (coordinating) activities, and other marketing practices. A. The Statute is Clear The statutory test of Section 105 c. 2/ is "whether the activities under th'e license would create or maintain a situation inconsistent with the antitrust laws. ." [ emphasis added). This is very clear language. If, instead, the statutory test were whether the activities under the license would be inconsistent with the antitrust laws (thus excluding the word 2/- Section 105 c. of the Atomic Energy Act of 1954, 68 Stat. 938, T2 U.S.C. 2135, as amended by P.L. 91-560 (Dec.19,1970, 84 Stat. 1473, 42 U.S.C. 2135. 3

9 " situation"), Applicant wo'uld have some support for its contention. Or if the statute asked only whether the activities under the license would create a situation inconsistent with the antitrust laws (in this example, excluding the word " maintain"), Applicant would perhaps have some basis for asking that the Commission refrain from inquiring, into any other activity of -the-Applicant. - ~But~such alternatives were not-enacted. These alternatives are not just hypothetical "might have beens," but rather were actively considered during Congressional work on the " practical value" amendment. This aspect of the legislative history of P.L. 91-560 will be discussed below. Applicant's suggested interpretation simply cannot be sustained: The statute is concerned with activities under the license which may maintain a situation inconsistent with the ~ antitrust laws, i.e. an existing situation. At the prelicensing stage, of course, no activities under the license will yet have taken place. If the activities under a license would maintain an existing anticompetitive situation, then clearly some conduct other than activities under the license must have been responsible for the already existing '* situation." Accordingly, under Section 105 c., where the Attorney General's advice is that activities under a license would maintain an existing anticompetitive situation, Applicant's position that the Commission's inquiry must focus exclusively on Applicant's 4 w b e

s ~ activities to construct and ultimately to operate the Midland units "and only those activities" is clearly erroneous. It would make it impossible for the Commission to have any under-standing of what the situation is which the licensed activities would maintain. B. The Legislative History Confirms That the Purpose of Section 105 c. was a Broad Prelicensing Antitrust Review It is axiomatic that where the meaning of a statute is clear on its face resort to the legislative history of the statute is unnecessary. As Mr. Justice Jackson state 4 " Resort to legislative history is only justified where the face of the Act is inescapably ambiguous." Schwegeman Bros. v. Calvert Corp., 341 U.S. 384, 395, con op. See also, Soon Hing v. Crowley, 113 U.S. 703,.J10. Nevertheless, it may.be..useful to demonstrate ,here that the legislative history of Section 105 c. reveals that Congress desired a broad antitrust review and therefore, that there is no support for Applicant's contention that the statute intended a narrow review. l. The 1954 Act Section 105 c. may be traced to the testimony of the Depart-mer.t of Justice before the Joint Committee during hearings on dhe 1954 bills to amend the Atomic Energy Act. 3/ The bills as 3/ 83d Cong., 2d Sess., Joint Committee on Atomic Energy Eearings on S. 3323 and H.R. 8862 to amend the Atomic Energy Act of 1946, Part II, page 712 (June 1954) [ Hereinafter 1954 hearings.] 5

I ,i introduced provided for no prelicensing antitrust review, but merely contained a section equivalent to what is now Section 105 a., which expressly preserves the applicability of the antitrust laws. 4/ Congressman Holifield and witnesses testifying before the committee complained that the language of Section 105 (then numbered 106) was inadequate to protect competition in '-the nuclear electric industry. 5/ They pointed to'the history of the "Alcoa" case, U.S. v. Aluminum Co. of America,148 F. 2d 416 (CA 2,1945), to show that once a monopoly has become established in an industry, it is difficult and time-consuming to eliminate it. p/ As Mr. Holifield described the bill prior to the insertion of Section 105 c.: So the whole pattern of the bill coupled with,the.. jellyfish. section. is. going. to depend on the antitrust department, after the AEC has let the cancer grow. You go to them, and they will rub some mentholatum on the cancer of monopoly. That is what it amounts to, in place of preventing its growth to begin with. Of special concern was the fear that the immense public invest-ment in nuclear technology would be captured by a few giant corporations. Following suggestions made by Department of Justice witness Lee Rankin (1954 hearings, pp. 712-713), the principle of prelicensing antitrust review and language similar 4/ 83d Cong., 2d Sess., H.R. 8862, Section 106, S. 3324 Section T06. Nor did the Committee Print of May 21, 1954 contain the language that ultimately comprised Section 105 c. of P.L. 54-703; 68 Stat. 9 19. 5/ - 1954 Hearings, Part I, pp. 22-23, 289. s/ 1954 Hearings, pp. 441-443, 495-98, 629, 641-642. M b \\

i a to the.present statutory standard were adopted in the committee . rewrite. 7/ That standard, " create or maintain a situation inconsistent with the antitrust laws," has continued with minor 4 changes, not relevant here, through the 1970 amendments. 8/ It is noteworthy' that the language used was taken from Section 207 of the Federal Property and Administrative Services Act of '1949, under which proposed property disposals by agencies of the Federal Government are analyzed by the Department of Justice to determine whether they would." tend to create or main-tain a situation inconsistent with the antitrust' laws." Moreover, Federal agencies are not " persons" within the meaning of that term as used in the antitrust laws, and therefore the sale in and of itself could hardly be said to " violate" the antitrust laws. Accordingly, under the Property Act, the disposal i ,. is necessarily assessed in a context which encompasses more than the mere act of disposal. Rather, the analysis is whether an anticompetitive " situation" would be created or maintained as a result of the contemplated disposal of government property. 1 7/ H.R. 9757 (introduced June 30, 1954) was the committee rewrite of June,1954.which contained the. principles of prelicensing antitrust review under the test of " tend to create or maintain a situation inconsistent with the antitrust laws" ultimately incorporated in P.L. 54-703. 8/ In the 1970 amendments the words '" tend to" were drop'whetherped from the statute. Prior to 1970 the operative language was the proposed license would tend to create or maintain a situation inconsistent with the antitrust laws." Also, the words "the proposed license" were changed to " activities under the license" in recognition dhat it would be the licensee's activities that .would be 'under investigation -rather than those of the licensing agency in granting the license, r ( e ' I

e 1 The inclusion in Section 105 c. of the 1954 Atomic Energy Act of the antitrust test previously employed in the Property Act indicates the congressional purpose to adopt, so far as prac-ticable, the same general scope and method of analysis as is performed under the Property Act from which the antitrust test of the Atomic Energy Act was borrowed. In short, it analyzes the licensed activities.in the context of the total business " situation." 2. The 1970 Amendment Prior to 1970 the Commission had conducted no prelicensing antitrust review as called for by the 1954 statute because all licenses issued by the Commission during that period had been isstad under Section 104 providing for licenses of reactors for " medical therapy and research and development." (Only Section 103 " commercial licenses" were required to be subject to' the prelicensing antitrust review procedures of Section 105.) In Cities of Statesville. et al. v. Atomic Energy Commission, 441 F.2d 962 (C.A.D.C.1969) small electric utility systems challenged the Commission's interpretation of the law, claiming that the reactors were cemmercial reactors in fact. While upholding the Commission's grant of a construction permit with-out anticrust review on the technicality that it had not as yet made a "Einding of practical value" under Section 102 of the Act, the court warned that when the time came to issue operating licenses on the subject reactors, the court could very well find that antitrust issues would be relevant and must be considered. Icl. at 974. Following the " warning" centained in the Statesville opinion, various bills (known collectively as " practical value 8 ~

bills") were introduced to establish a procedure for applica-tion of the antitrust laws.to reactor licensing. Legislation ) in the form of P.L. 91-560 was enacted in December 1970. The legislative history of P.L. 91-560 confirms the j broad scope of prelicensing antitrust review which was con-templated and reveals that the very sort of antitrust review standard now being urged by Applicant was considered and re-jected by Congress in the course of the 1970 amendments. 9/ Among the " practical value" bills considered were the Aiken-Kennedy bill, S. 2564, and H.R. 13828 (H.R. 15273 identicaD 90th Cong.,1st Sess., which are part of the 9/ According to the Joint Committee Reoort on the 1970 amendment (House Report No. 91-1470, 91s't Cong., 2d Sess.) the legislative history of P.L. 91-560 includes, inter alia: 90th-Cong.,.2d.Sess.: .S. 2564-(Aiken-Kennedy); H.R. 13828 and H.R. 15273 (identical to S. 2564); Hearings on , Participation by Small Electrical Utilities in Nuclear Power, Parts 1, 2 (1968) (After AEC's initial decision.on Oconee); 91st Cong., 1st Sess.: S. 212 (Anderson-Aiken); H.R. 8289 (Joint Committee bill); H.R. 9647, see also S.

1883, (AEC bills); Hearings on Prelicensin Nuclear Power Plants, Part 1 (1969) g Antitrust Review of and Part 2 (1970);

91st Cong., 2d Sess.: H.R.18679 and S. 4141 (Joint Committee " clean" bills). In addition to the foregoing, the following documents, whhch were not formally published, afford considerable in-sight into the considerations which influenced the final wording of, and the Joint Committee Report on P.L. 91-560: DraftJointCommitteeReport,Ju1ly__,1970(forCom-mittee use only); Proposed minority dissent on H.R. 18679, circulated by Senator Aiken, dated September 14, 1970. 9 e [h

k ( l legislative history of P.L. 91-560. Under a proposed Section 111 of the Atomic Energy Act contained in S. 2564, any ' licensee would have been obliged to grant all other interested persons... an opportunity to participate to a fair and reasonable extent as determined by the Commission, in the ownership of the facility for which the license is requested. Under that bill the Commission would have been further obliged to request the advice of the Attorney General of the United States with respect to whether or not the operation of the oronosed facility by the Appl 3?? cant would be inconsistent with the antitruse laws cf the United States. LEmphasis supplied] The test under that bill would have been the antitrust effects of operation of the crocosed facilities, in contrast to the test which was ultimately enacted, whether there would be an anticompetitive situation which would be created or maintained (or enhanced) by an Applicant's activities under a license. - S. 2564 failed to pass and the antitrust test contained in that bill was never adopted. Accordingly, it cannot be disputed that the proper test of Section 105 c., as amended is: whether an anticompetitive situation exists or would be created to which operation of the proposed facilities would contribute. Nevertheless, Applicant urges the Commission to interpret Section 105 c. as (1) requiring antitrust review of construc-tion and operation of the units subject to the license - "but no more," thus (2) excluding any inquiry concerning an anti-competitive " situation" in which the units would be utilized. In reality, therefore, Applicant urges the Commission to adopt the test in the Aiken-Kennedy bill, the test that was 10 l

t I passed over in favor of P.L. 91-560 Another " practical value" bill, S. 212 (91st Cong.,1st Sess.), would have directed the Commission to reject an appli-t cation or to condition a license only when there was a finding that the activities under the license would " create a situation inconsistent with the antitrust laws." While this bill would not have imposed the " maintain" test upon the Commission, it ~did -include it -within the scope of the Attorney -General's advice. On April 14, 1970, Carl Horn, General Counsel of Duke Power Co., testifying on behalf of Edison Electric Institute, urged the Joint Committee to limit both the Commission's test and the Attorney General's advice to the question whether activities under a license "would ' create a situation in vio-lation of the antitrust laws. ;" (Prelicensing Antitrust Review Hearings -- hereinaf ter P. A.R. Hearings -- p. 338) At the same hearing, Sherman R. Knapp, for Northeast Utilities urged that language containing neither " situation" nor " maintain" be adopted: We also think that the standard for the anti-trust review of commercial licenses should be simply whether the proposed license or the licensed activities would actually or prospectively violate the antitrust laws. (P. A.R. Hearings, Part 2, 398.) The correctness of our interpretation of Section 105 c. is reinforced by the legislative history showing that Congress directly focused on the relationship between tha Atomic Energy i Commission's role under Section 105 c. and the jurisdiction of other regulatory agencies and the antitrust courts in 11- / 6 a= vv-r v

electric power matters. We show below that it was recognized that the scope of antitrust review would be a broad one and that the authority of AEC would overlap the jurisdiction of ~ other agencies and the courts, and that Congress intended AEC to have concurrent jurisdiction to deal with " situation [s] inconsistent with the antitrust laws." The Department told Congress that it would a. litigate before AEC issues which might also be within other anencies' iurisdiction In the hearings on the bill which bbcame P.L. 91-560 the Department made clear that its understanding of the anti-trust test of Section 105.would require a broad review, including inouiry into matters which might also be litigated in tho-courts or..other.ngencies. .Both Mr. Comegys and Mr. McLaren noted that there could be overlap with FPC and SEC activities. (P.A.R. Hearings, Part I, p. 135, 144-145) Mr. McLaren indicated that "recent litigation in the courts give[s] a fairly good idea of many of the principal questions which could be expected to arise in prelicensing antitrust review." These cases involved competition issues raised under not only the Sherman Antitrust Act but also under the Public Utility Holding Company Act, Federal Power Act, and the Atomic ~ em. W 9 s e b wb

\\- Energy Act, 10/ Assistant Attorney General McLaren, responding by letter of February 11, 1970 to questions posed by the Joint Committee after Mr. Comegys had testified, explicitly stated the Department of Justice's expectation that the AEC would be the " primary forum" as to antitrust issues which might be common to other agencies and the AEC: Upon enactment of the proposed legislation, the Atomic Energy.Act,would.contain.a. carefully con-ceived and adequate procedure for eliciting the Attorney General's consideration of the antitrust problems surrounding the construction and opera-tion of a nuclear generating station. In view of this, we would generally expect the Atomic Energy Commission to be the primary forum for the Attorney General's presentation of issues common to all the agencies which must grant regulatory approval. Similarly we think it likely that in most cases other agen,cies would think it appro-priate for the Atomic Energy Commission to pro-ceed first with ring of the antitrust issues and wou3 cnc Commission's adjudica- . tion of these-isc.es heavy weight. (P.A~.R. Hearings, Part I, p. 145) 10/ E.g., refusal to wheel: United States v. Otter Tail Power E2i.; City.of Paris, Kentucky v. F.P.C.; ) Allocation of territories: United States v. Florida Power Corp., et al.; City of Gainesville, Florida v. Florida Power Corp. and Florida Power & Light Co.; ) Refusal to share reserves: Gainesville Utilities Depart-ment v. Florida Power Corporation; ) Refusal to coordinate develo S.E.C. (Vermont and Maine Yankee)pment: Mass. Municipals v. l

Mass. Municipals v. F.P.C.

(Northfield Mountain); Cities of Statesville, et al. v. A.E.C. (Oconee Nuclear Generating Station) (together with another aspect'of " Vermont Yankee sub nom. Mass.Municipals v. A.E.C.). 13 4 e 7 r

4 The Department of Justice reported that the only type i of situation inconsistent with the antitrust laws that would not be encompassed in the prelicensing review under Section l 105 c. would be supplier-utility arrangements in which the utility did not share culpability. (P.A.R. Hearings, Part I, e pp.-140,-144.) Thus, the legislative history is entirely inconsistent with Applicant's position that " issues relating to coordination, wheeling,. pooling, and proposed or existing interconnection agreements [ raised by the Department and proposed Intervenors) are irrelevant to the inquiry which the statute contemplates, i and should not be considered in this proceeding." (Applicant's Answer, pp. 2-3.) The Department stated its er.pectnion that under the i amended Section 105 c. the Atomic Energy Commission would be i "the primary forum" for " issues cocoon to all the agencies which must grant regulatory approval." As, we will show below, Congress did not disagree that this would be proper under Section 105 c., and, in fact,- rejected proposals which would have provided for a different procedure. 14-t we - i V --~e,. -o,,. ,n. .,y y y .. -,-y.-p.-.- .c------mw,,, 9 3 -,-.,

A b. Congress rejected the proposition that the Federal Power Commission should be the sole agency charged with responsi-bility over bulk oower sunoly coordination. During the hearings on the Aiken-Kennedy bill and during Part I (1969) of the Hearings on the " practical value legis-lation," many people proposed that antitrust review be extended to fossil fuel units, and that the Federal Power Commission be given authority to administer the relief both as to nuclear units and fossil un.its. The argument was that the predominant issues were similar to those which the Power Commission normally deals with, such as power pooling arrangements. It was suggested that the Power Commission could afford small systems the opportunity for coordinated development of their bulk power supply expansion programs with large systems if the Federal Power Act were amended to remove an existing proviso in Section 202(b). 11/ (That proviso restricts the Commission from compelling coordi-nated development where it would require a utility to increase its generating capacity.) In opening the second session of the Hearings on prelicensing antitrust review of nuclear power plants, Joint Committee Chairman Holifield abandoned that alternative, noting: 11/ Section 411 of S.1934, 91st Cong.,1st Sess., the proposed " Electric Power Reliability Act of 1967," would have removed the proviso, as well as making certain other changes, including allowing the FPC to proceed on its own motion. MN en a w __m.., ..._m.

At the time of the 1968 [Aiken-Kennedy] hearings it was thought that the Electric Power Reliability Act of 1967 might be a better vehicle for accomplishing several of the objec-tives in Senator Aiken's bill. The point was also made at that time that it would be unfairly discriminatory to single out nuclear power plants for the heavy hand of extensive regulation which, if advisable, appeared to have equal relevance to large fossil-fired power plants. The proposed Electric Power Reliability Act .did.not-become law. (P.A.R.. Hearings, Part 2, p. 318) c. When Section 105 c. was amended, attempts were made to narrow its scope of antitrust review but these were rejected. The Department of Justice's views as to its role and the role of AEC under Section 105 c. were submitted in Part I of the " practical value" hearings during 1969. In testimony and comn9nts ~ Tiled by representatives of large -utility companies during the Part II hearings in 1970, a great deal of attention was focused cn the broad scope of prelicensing antitrust review which was likely to occur under the proposed amendments to Section 105. These representatives urged that the AEC authority be limite4 particularly with respect to subject that might fall within the regulatory spheres of other agencies. Noting the overlapping that would exist, Donald G. Allen of New England Electric System in his prepared statement urged dhat AEC's antitrust role be restricted, and then explained: 16 l O e ar

.. I make the further suggestion that in some fashion, Congress, starting here, tell the agencies, in this case the Atomic Energy Commission, that they do not have to go into the big problem of the total electric utility industry every time they license a single nuclear plant; that antitrust issues, indeed, they must consider, but they ought to spend time and effort only on things which they can solve in that proceeding. For example, the Department of Justice, Mr. Donnem in particular, and Mr. Comegys, has indicated that the AEC, when it comes to com-mercial licensing, may indeed want to delve into the whole field of all of the provisions of a regional power pooling agreement. . Basically, my suggestion is the AEC will need guidance in determining what issues, what antitrust issues can appropriately be resolved in licensing proceedings and should be given express authority to exclude issues which, first, are not directly related to the project; second, which it can't dispose of because it does not have all .necessary parties before it; or third, which for other reasons are more appropriately handled in another forum. (P.A.R. Hearings, Part 2, pp. 536-537) Similarly, Joseph M. Farley, appearing for Alabama Power Company, commented: Absent a complete elimination of the saecial prelicense antitrust review, we feel that this review should not invade areas already subject to regulatory requirements. This desired approach would eliminate the obvious regulatory conflicts ~ which would result from the suggested forced access of competitors to ownership of nuclear facilities or requirements for preferential rates to certain customers. If this review is retained in the legislation,. our proposal would be to include a prohibition in the present Section 105 c. which eliminates from the review matters which are the subject of regulation by a state or federal agency and ~ 17 n y

d specifically prohibit as consequences of such antitrust review the regulatory conflicts described above. (P.A.R. Hearings, Part 2,

p. 647)

Representatives of the larger electric utility companies and of suppliers comprising a committee of the Atomic Industrial Forum also focused on the overlap between Section 105 c. anti- . trust review.and. matters normally considered 1 79 such agencies as the FPC and SEC, and urged that " antitrust review of power pools should not be introduced into the AEC licensing process." In the November, 1969 hearings, the Atomic Industrial Forum had raised the question: If the Commission decides to impose a condition relating to financing, ownership, pooling arrange-ments or allocations of, or rates for power output, what would be the role of the FPC, SEC or the State ' Commission ~having responsibilities in these matters? How, and to what extent, would the AEC coordinate the exercise of its authority with such other agencies? (P.A.R. Hearings, Part 1, p. 298) And in April 1970 the presentation on behalf of this group contained the following: While 'potentially broader in scope, the thrust of the antitrust review appears to be directed at the following possible issues: (a)-access by other electric utilities to ownership of, or to power generated from, large nuclear power plants; (b) access to power pooling arrangements between electric generating companies, one or more of whom may be proposing to construct and operate a large nuclear power plant; wem e 18 9

.. The access issues are extremely complex and .are not susceptible to resolution without requiring a great deal of time. If construction and operation of power plants were to be delayed pending resolu-tion of such issues, the reliability of the country's power supply could be seriously threatened. Serious questions therefore should be asked if the appropriate priorities of public interest require antitrust review to accommodate resolution of the access . question as a. precedent to AEC licensing of every individual power plant. The term " power pool" encompasses a variety of arrangements among utilities, ranging from simple interconnections between two or more utilities to complex regional operating or planning mechanisms. Federal regulation of the interconnection and coordi-nation of power facilities resides in the Federal Power Commission which, under Section 202 of the Federal Power Act, is directed to encourage voluntary interconnection and, in certain circum-stances,- to require-compulsory interconnecticn. And there can be no question that the FPC is required to weigh antitrust considerations in the exercise of its responsibilities to protect the public interest, including its regulation of wholesale power rates. The FPC also monitors pooling arrangements on a continuhg basis. It is clear, therefore, that the existing federal regulatory scheme contemplates direct and continuous oversight of power pooling arrangements by the Federal Power Commission, not the AEC. Accordingly the question now before Congress is whether or not in considering the priorities of public interest it is reasonable.to risk delay of needed generating capacity by interposing upon a vital safety review only to provide an additional forum to resolve issues wnich can be adequately, if not better, dealt with elsewhere. (P.A.R. Hearings, Part 2, pp. 566, 568-569) 19

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g e ,w n - --n-

1 l i i A rather comprehensive discussion of the scope of Section i ~105 c. is contained in comments of a committee of the N.Y. City { j ~ Bar~ Association Committee on Atomic Energy (which included j a number of counsel for large utilities). This group's criticism of the proposed Section 105 c. prelicensing review provisions was especially directed at the broad scope of review that was anticipate'd if the legislation were enacted. The Bar Association t Committee outlined some of the issues which antitrust review could be expected to encompass: . Activities of apolicant in planning and/or i financing the facility. Is there a joint venture from which other parties have been improperly excluded? Was there cooperative reserrch or i development work, the results of whic'a. are being improperly denied to other parties? bc the i contracts with the architect-engineer or the financing institutions improperly restrict them ~ t from undertaking similar projects for other i parties? i Activities of applicant in diseosing of electrical energy from the facility. (footnote i omitted] Is the facility part of a pool which is inconsistent with the antitrust laws? Are there improper. agreements between the applicant and others as to the parties to whom and the areas in which the applicant will sell the electricity? i Is there a joint venture from which other parties i have been-improperly excluded? Even if there is no oint venture or joint understanding, does the 4I_ app icant occupy such a position of dominance diat he is akin to a monopolist? If so, is his - refusal to sell to some parties inconsistent with l .the antitrust laws?.Does the applicant charge Ldiscriminatory prices', utilize deceptive advertising, Eor engage in unfair sales practices which are inconsistent with the antitrust laws? (P.A.R. i Hearings,-Part 2, pp. 612-613) -2Q a 4 'g F -,-,.,,..nn, ,,-,,,.l-

The same committee also suggested amending the Act to -give the Commission authority to issue unconditioned licenses even where inconsistency with the antitrust laws was established. (P.A.R. Hearings, Part 2, pp. 616-617.) Finally, the committee recommended guidelines to lin_c the scope of Section 105 c., either by amending the statute or inserting guidelines in the legislative history: B. Scope of Section 105 c. Review The legislation should set forth as explicitly as practicable the scope of the activities to be reviewed by the Commission and the Attorney General's review should be limited to the same scope of activities. The review should also be limited to the - activities o f-the ~ applicant -directly.. associated with activities under the propoced license in order to preclude the possibility of Commission investi-gations into unrelated matters such as the non-nuclear activities of a diversified applicant. (P.A.R. Hearings, Part 2, pp. 624-625) The draft report on the " practical value" amendments which was prepared for the Joint Committee on Atomic Energy and circulated in July,1970, appears to have given some effect to the N.Y. Bar Association Committee's suggestion to fashion the legislative history so as to narrow the scope of Section 105 c. Incorporated in the draft report on the bill was language which could be construed as limiting the scope of review. At pages 14 and 15, the draft report included the language:

===mmm.p 21 ,_,.w

The~ committee deemed it impractical and unwise to extend the boundaries of the antitrust considerations to be taken into account by the Commission beyond the violation of the antitrust laws. To begin with, the committee recognized that there would be no particular combination of factors or set of criteria that could mean-ingfully guide the Commission in regulating ventures against such abstractly despised but hard to identify dragons as "untair competition" (where not a violation of law). 'Besides, the committee believed that concerns of this general nature, in connection with the regulation of " commercial" power generating facilities that are constructed and operated without subsidy from the AEC are, at this advanced stage, better left to the respective domains of other agencies such as the Federal Power Commission, the Securities and Exchance Commission, and State nooies. LEmphasis suppTiedj This language was deleted from the final Joint Committee - report - (S.. Rep,. 1470, 91st Cong., 2d Sess.) and the ' view , reflected in this passage was not accepted elsewhere in the official report. (Id. at 15.) Between circulation of the July 1970 Joint Committee drcft report and the adoption of the official Joint Committee report in late September,1970, Senator George D. Aiken had circulated a proposed minority dissent to be included in the Joint Committee report if the latter were issued in its July 1970 draft form. Senator Aiken noted on page 5 of the proposed dissent: In the third and final draft, most major changes recommended by the Justice Department were included in the bill, but the Report accompanying the bill is an attempt to nullify every major point of compromise. 22 e c' 4 w g y

1 At pages 9 and 10 of his dissent, Senator Aiken stated his belief that Section 105 c. should require the AEC, with advice from the Department of Justice, to consider in the cases which would 'come before it such antitrust issues as access to large scale units, refusals to wheel, refusals to deal, and allocation of customers and territories. JJ/ In-this connection, Senator Aiken said (pp. 9-10): The development of the electric power industry has propelled into prominence inter-connection and interstate reliability arrange-ments. The questions of the access of smaller systems to large generation plants, and to large power pooling arrangements, are inextricably involved in these arrangements. The necessity for joining in large scale coordination arrange-ments gives companies the opportunity to follow restrictive practices in a number of respects, if they choose. In addition to determining who may participate in arrangements which may be necessary for survival in the industry, companies can, conceivably, refuse to lend their facilities to the wheeling of power for benefit of non-participants, collectively determine to whom they will sell power and on what terms, make defacto divisions of territories, and the like. These issues are not esoteric. They have.been raised by numerous petitioners before the Atomic Energy Commission, the Federal Power Commission, the Securities and Exchange Commission, and by the Department of Justice in two court suits. Exclusions from unique facilities necessary to competitive viability, 12/ These were among the issues involved in "the recent litigation In the courts" to which Assistant Attorney General McLaren had referred in his February 11, 1970 letter in response to the Joint Committee's inquiry as to the kind of activities the Department would consider to fall within the antitrust test of Section 105. (See footnote 10, supra, p. 13) 23

refusals to deal with monopolistic effects, allo-cations of customers, all are well understood to be monopolistic tactics. All that is required is the translation of established antitrust principles into the specific situations existing in the electric ' tility industry. The AEC can u do this, with advice from the Department of Justice. There is no justification for the AEC, or this Committee, to shirk its portion of the task of applying competitive policies. The changes as between the July 1970 Joint Committee draft report and the official Joint Committee Report were obviously made in response to Senator Aiken's threatened dissent. (To fully understand its significance, the proposed minority dissent should be read in its entirety. It is attached as Appendix A.) Thus the Committee's rev'ision of the report in order to secure unanimous adoption indicates that the committee rejected the notion that "better left to the respec-tive domains of other agencies such as the Federal Power Com-mission, the.. Securities and.. Exchange. Commission, and State bodies" (July 1970 Joint Committee draft report, p. 15) would be competitive issues of which other regulatory agencies could also take cognizance. The Committee thus intended that the AEC have concurrent jurisdiction with respect to antitrust issues. (There was another change in the Committee Report -- not immediately relevant to the present issues -- indicating that the Commission was to concern itself with practices clearly inconsistent with antitrust principles as well as strict anti-trust violations. AppendixBisasidle-by-sidecomparison of a key portion of the Joint Committee Report, in the draft version and in the final version.) I' 24

e The broad and overlapping scope of AEC's antitrust review jurisdiction was also alluded to in the Senate and House debates. Senator Curtis, a member of the Joint Committee, noted that under the bill concurrent jurisdiction to deal with antitrust issues would exist. 13/ Similarly, Mr. Price of Illinois, another member of the Joint Committee, remarked during the House proceedings: Paragraph 5 does not preclude in any manner the right of the Department of Justice to pursue antitrust suits, civil or criminal in nature, in the courts, whether or not there are involved parties, facts, or issues that were, or are being, considered by the Commission and nothing in the bill would preclude or limit the intervention or participation of the Department of Justice in . proceedings.before. other regulatorv. agencies where antitrust issues are involved and irrespective of whether they involve norties, racts, or issues pertinent to [AEC] oroceeaings. Lcmpnasissupplied]jlf j C. It is Factually Impossible and Legally Incorrect to Isolate the Activities Under the License from Applicant's Ownership and Operation of its Electric Power System and Its Power Pooling Activities with other Bulk Power Sunolv Systems The Department takes specific issue with Applicant's contention that since: 13/ S. -19256, December 2,1970, Cong. Rec. 14/ H.R. 9449, September 30, 1970, Cong. Rec. 25 "~

i The licenses are not concerned with the operation of Applicant's system in a broader context, including other generation, transmission facilities, sales contracts, coordination arrangements and the like, . issues relating to coordination, wheeling, pooling, and proposed or existing inter-connection agreements, as set forth by the Justice Department, in its advice letter dated June 28,'" 1971, and the intervention petitions filed by Traverse City et al. and Wolverine Electric Coop-erative, Inc., are irrelevant to the inquiry which the statute contemplates, and should not be considered in this proceeding. (Applicant's Answer, pp. 2-3.) On the contrary, the matters referred to in the Department of Justice's letter of June 28, 1971, are closely interrelated with Applicant's activities under the license sought. Applicant's activities under the license surely must be viewed as including the planning, financing, operation and marketing of pcwer from the Midland units. The Department is prepared to establish by evidence that . the power from the subject units is proposed to be marketed as " firm power" by combining the unit, through high voltage tmns-mission lines as the integrating and coordinating medium, with other generating units owned by Applicant and others; that Applicant will market the power from the licensed units as part of the output of the bulk power supply system thus created which will' provide necessary low cost insurance against the risk of forced outage of the nuclear unit; that without such integrating and coordinating arrangements, Applicant could market no firm power from either nuclear unit if operated in 26 ~ n

i isolation from the remainder of Applicant's system; that only 50% of the combined power available from both units could be marketed as firm power if t, hose units remained physically and/or contractually isolated from other unit; either in Applicant's system or elsewhere; that the economic feasibility of each Midland unit depends on use of the unit in conjunction with a high voltage and extra high voltage transmission network which is capable of gathering sufficient load growth to Lily load the capacity of the units in a relatively short time; and consequently that, unless, as planned, the Midland units are connected by a high voltage transmission network to other generating units for purpose of reserves, and to other load areas for purposes of load growth pooling, Applicant would not construct these nuclear units. Even were the language of Section 105 c. not to include the words " maintain" and " situation," an antitrust review of " activities under the license" would necessarily involve an analysis of those activities in the context of a nuclear unit's relationship to an applicant's competitive demeanor. Case ~ precedents under the antitrust laws caution against the type of analysis where acts or practices are each viewed in isolation. In Swift and Comoany v. United States,196 U.S. 375, 396 (1905) the Court said: =*--e l

\\ ,i s The scheme as a whole seems to us to be within the reach of the law. The constituent elements, as we have stated them, are enough to give to the scheme a body and, for all that we can say, to accomplish it. Moreover, whatever we may think of them separately when we take them up as distinct charges, they are alleged sufficiently as elements of the scheme. It is suggested that the several acts charged are lawful and that intent can make no difference. But they are bound together as the parts of a. single. plan. .The plan may make the parts unlawful. And in American Tobacco v. United States, 328 U.S. 781 (1946), the court held: It is not of importance whether the meaa s used to accomplish the unlawful objective are in themselves lawful or unlawful. Acts done to give effect to the conspiracy may be in themselves wholly innocent acts. Yet, if they are part of the sum of the acts which are relied upon to effectuate the conspiracy which the sectute forbids, they come within its prohibition. (328-U.S. at 809) See also United States v. Patten, 226 U.S. 525, 544 (1913); United States v. Reading Co., 226 U.S. 324, 357-58 (1912); American Medical Association v. United States, 130 F. 2d 233, 250-252 (C. A.D.C.1942), aff'd. 317 U.S. 519. Conclusion Analysis of the statutory language and the legislative history of Section 105 c. demonstrates that a clear choice was made to reject a narrow approach to prelicensing antitrust review. 28 --ew..e, % a S 9 4 o b

l I It is manifest that Congress was unwilling to rely solely on traditional antitrust enforcement in the electric utility industry when members of that industry would be obtaining the benefits of nuclear technology which vast Government expenditures have made possibic. Representatives of the Department of Jus tice had outlined to members of the industry and to the Joint Committee the scope of their proposed analysis of " situation [s] inconsistent with the antitrust laws." The Joint Committee was fully apprised both by the Department of Justice, and by industry representatives who urged restrictive action, that the scope of Section 105 c. would include matters as to which relief might be available before regulatory agencies other than AEC or in i the courts. Notwithstanding requests. that the Joint Committee refashion the bill to require either the Attorney General or the Atomic Energy Commission, or both, to adopt a narrow approach to carrying out their respective responsibilities under Section 105 c., that approach was not accepted. Nor is it either factually possible, or legally correct under guiding case precedents, to separate the activities under license from the " situation" they may create, maintain or enlarge. .Accordingly, in ruling on the various matters that will come before the Commission in the course of the subjec't pro- ~ ceeding, and other-proceedings to come, the Board and the ~~~ 29 s 6 ,<,-,,,...e,. ,y. c .,-vn-. ,,ys._. w w m s m - --,,

h I Commission must reject as erroneous the narrow view of the scope of Section 105 c. of the Act urged by Applicant in its answer. II OTHER MATTERS RAISED BY APPLICANT'S ANSWER A. Applicant's Allegations that the Department of Justice would Compel it to Discriminate are Incorrect Applicant further suggests that the Department proposes to require Applicant to " grant some of its customers a pre-ferential form of access to its generation and transmission system" which it further claims "would be unfair and discriminatory to Applicant's customers who are not afforded such access and would therefore violate the Federal Power Act and the laws of the State of Michigan." The Department will show that Applicant, through its . control over generation and transmission, particularly trans-mission, has the power to exclude actpal or potential competitors from substantial bulk power supply markets 15/ and that the power exchanges and other remedies that it would recommend as conditions to any license would be compatible with and complement Applicant's obligations as a public utility under such regulatory statutes as Applicant may be subject to. 15/ With control over bulk power supply it can dominate and possibly exclude others from retail markets as well.. 30 O S O '4 b w Y-*

.B. The Department takes no Position on Applicant's Opposition to Delegation of Review Authority The Department of Justice neither opposes nor concurs in Applicant's request to eliminate the delegation of final authority conferring the review function on the Atomic Safety and Licensing Appeal Board. However, the Department believes that the Commission's established proceduro incorporated in its rules of practica which reserves to the Commission final authority in specified cases, is adequate to deal with this situation. III RZPLY TO APPLICANT'S SPECIFICATION OF ISSUES AND FACTS The Department has outlined the relevant facts in its letter of advice of June 28, 1971. The Department further states that these facts indicate (1) that Applicant is culpable for a situation inconsistent with the antitrust laws which exists in a major area of Michigan's lower peninsula which gives Applicant the power to preclude its competitors from using large low cost generating units; (2) that Applicant's proposed activities under the license in installing and markating power from large nuclear units would maintain such situation and perhaps enlarge it. Accordingly, the Department will propose license conditions 31 =*WMg.bw

o O .to remedy the anticompetitive situation which Applicant's activities under the license would maintain. The license conditions will be " appropriate" to carry out the purposes of Section 105 of the Act, in accordance with the policies set forth in Sections 1, 3, and 105 c.(6) of the Atomic Energy Act of 1954, as amended. Respectfully submitted, '7 h//, //. u. WALLACE EDWARD BRAND Attorney, Antitrust Division Department of Justice Washington, D. C. 20530 June 9, 1972 G 4 e4 4*Mw 6 r. y m. ...-mv.

UNITED STATES OF AMERICA ATOMIC ENERGY COMMISSION In the Matter of ) ) CONSUMERS F0WER COMPANY ) Docket Nos. 50-329A (Midland Plant, Units 1 and 2) 3 50-330A CERTIFICATE OF SERVICE I hereby certify that copies of the REPLY OF THE DEPARTBENT OF JUSTICE ON ISSUES OTHER THAN DISQUALIFICATION RAISED BY APPLICANT'S ANSWER OF MAY 9,1972, dated June 9,1972, in the above-captioned matter have been served on the following by deposit in the United States mail, first. class or air mail, this 9th day of June 1972: Jerome Garfinhel, Esq., Chairman James F. Fairman, Esq. Atomic Safety and Licensing Board 2600 Virginia Avenue, NW. U. S. Atomic Energy Commission Washington, D. C. 20037 Washington, D. C. 20545 Abraham Braitman, Esq. Hugh K. Clark, Esq. Special Assistant for Antitrust P. O. -Dc:: 127A Matters Kennedyville, Maryland 21645 Office of Antitrust and Indemnity U. S. Atomic Energy Commi;sion Dr. Leonard W. Weiss Washington, D. C. 20545 Department of Economics The University of Wisconsin Harold P. Graves, Esq. Madison, Wisconsin 53706 Vice President and General Counsel William Warfield Ross, Esq. Consumers Power Company Keith S. Watson, Esq. 212 West Michigan Avenue Wald, Harkrader & Ross Jackson, Michigan 49201 1320 19th Street, NW. Washington, D. C. 20036 . Joseph Rutberg, Esq. Benjamin H. Vogler, Esq. Howarable Frank Kelly U. S. Atomic Energy Commission Attorney General Washington, D. C. 20545 State of FEchigan Lansing, Michigan 48913 . Atomic Safety and Licensing Board Panel ' U. S. Atomic Energy Commission Washington, D. C. 20545 Wallace Edward Brand Attorney, Antitrust Division Department of Justice ( Washington, D. C. 20530

e7 -l..r*. [") J APPENDIX A Dissenting Views on H.R.18679 ~ September 14, 1970 =- From: George D. Aiken United States Senate, MINORITY DISSENT Introduction This omnibus bill is divided broadly into three parts which concern (1) a new procedure for establishing radiation standards; (2) the pricing of uranium enrichment and (3) the licensing of nuclear power plants. The portions of the bill dea. ling with radiation standards and uranium enrichment are constructive and should be enacted. The sections dealing with practical value and antitrust advice to the Atomic Energy Commission in its licensing of nuclear plants contain numerous defects relating to the procedure for obtaining antitrust advice, and the mode of consideration of that advice. Among those defects are curious restrictions on standards to raise antitrust issues in AEC licensing proceedings (paragraphs 2 and 3 of revised subsection 105c)., an odd an;l troublesome feature of rderring. to the need to consider power.needs only when serious antitrust isents arise (paragraph 6); and deletion of " tend to" from -i the " tend to create or maintain a situation inconsistent with the ~ ~ antitrust law" test' now in the Act. t- - -.- a p. ~ .e e p X L'l? ~ ' J ' ' ~ ~ ~~

L_ 2-O Despite' its deficiencies, the language of the bill is not entirely unacceptable, if properly interpreted. This bill, however, is accompanied by a Report with interpretative comments which, if followed, would substantially curtail the scope of the Commission's consideration l of competitive issues. ~ This action by 'the Joint Committee -comes at precisely the time when badly needed antitrust advice is to be given and considered for the first time by the -AEC in its licensing of nuclear electricity generating plants. s It is nothina more or less than a concerted attemot to block the civina of that advice, or, failing that, to cut back on the scope of AEC consideration of antitrust issues. That attemnt is reflected c to some e>: tent in this bill; but principally in *he Report written to. accompany the bill. As Members of the Joint Committee who see major competitive problems' facing the industry, we find this retrogression from the standards of the Atomic Enercy Act unconscionable. i ~ 'Backcround Since 1967 it has been clearly evident that nuclear power plants are commercially feasible. . r - 4 e e

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1 The Securities and Exchange Commission has long recognized o this fact by permitting nuclear energy utilities to sell bonds on the basis of the profits they expect to make from the sale of atomic power. ~ The Justice Department has formally declared that any utility which generates power for sale to the public is commercially feasible. -But the nuclear utilitics, working in close harmony with the Atomic Energy Commission, have steadfastly insisted that they should be licensed as research projects under the Medical Therapy and Research section of the Atomic Energy Act. The AEC, in compliance with the wishes of the utilities, for three years refrained from making the Finding of Practical Value ,,-which the law requires before a plant may be licenced as a commercial facility. ~ On December 5,1969, the United States Court of Appeals handed down two decisions making it clear that the Court expects the Commission to proceed to make a Finding of Practical Value. This has been made into a cumbersome-process. s )- The first AEC hearing on Practical Value was delayed for nine months, and there is no way of telling how long this proceeding will last before a Ffnding is made. s s ,s i s 4

_z_ ' During this interim 71 nuclear plants with a total generating capacity of 49.6 million kilowatts have b'een licensed as research projects when they are in fact intended to produce power for sale at ~ a profit.

• By thus evading the law, the AEC allows the utilities to escape the antitrust regulation the law intended.

Under this research license shelter the utilities have also been free to prevent rural" electric cooperatives, inunicipal electric companies and small investor-owned utilities from sharing in the benefits of nuclear power. It was against this background that the Aiken-Kennedy bill of 1967 l . (S. 2564) was introduced. This measure had four basic purposes: 1. To protect the public health 2. To protect and conserve natural resources, particularly river systems and water supplies 3. To prevent monopoly of electric generation and distribution ~ 4. To insure a reliable source of electricity in areas threatened-by shortages

• In addition to' the above, as of September 8,1970, 46 more plants are in the planning stage with a total capacity of 43.9 million kw - or a grant. tctal of 117 plants with a capacity of 93. 5 million kw.

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Extensive public hearings were held on this measure in 1968 and a perfected bill, the Anderson-Aiken bill (S. 212), was offered., This measure was designed to strike,the Practical Value requirement from the Atomic Energy Act in order that nuclear plants could be commercially licensed. It also provided for precontruction antitrust review by the Justice Department. Action on S. 212 was repeatedly put 'off. Hearings were. held last April,.when the Joint Committee brought the Assistant General Counsel of the Atomic Energy Commission to the-staff on a loan basis to set up the hearings and draft a new bill. / The first draft of this new 1970 bill met every major demand of the private utilities and virtually ignored the testimony of the Justice Department and the publicly-owned municipals and cooperatives. In the third and final draft, most inajor changes recommended by the Justice Departinent were includbd in the bill, but the, Report accompanying -the bill is an attempt to nullify every.inajor point of compromise.

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._e ~ ~.. } AEC and the Public Interest The general mandate of the AEC under the Atomic Energy Act of 1954 is to promote the development of atpmic energy so as to maximize the welfare o'f the people, and, in doing so, to integrate in its actions the antitrust policy in favor of a competitive economy, The issue involved here is how it shall consider competitive questions in its licensing decisions. The Atomic Energy Act now would have the AEC consider whether e.ctivities pursuant to a license would tend to create or maintain a. situation inconsistent with the Antitrust laws. Under existing case law, other licensing and regulatory agencies are required to consider the general competitive policy, and to accommodate other policies with the antitrust policies in their decisions. The courts /have devised general formulas for such accommodations. See, for example, Svenska Amerika Linien v. FMC., 390 U. S. 238. j The Report accompanying this bill would restrict the Atomic Energy Commission to the consideration of whether specific, t6chnical antitrust law violations exist, or probably would exist. Were this appioach adopted, the Commission would, in substantial measure, merely i duplicate the work of the courts. The Commission's deliberations would be put on a footing dissimilar to the deliberations of otheE licensing and regulatory agencies. Indeed, existing law would be robbed of a significant, measure of its intended effect. Matters of policy and matters 'e .~ r

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which are not technically violo.tions of law but are clearly anticompetitive a might not be considered, while private parties and the Department of Justice would be put in the posture of conducting duplicate trials on the issues of technical law violation before the courts and the AEC. This cannot be allowed. The language of the bill does not refer to antitrust violations. It might have; Lhis was urged on the Committee and, adopted in prior drafts of the bill. Instead, the broader formulation i of " inconsistent with the antitrust laws" was used. If the Report's interpretation were the meaning of the language, the portion of the bill dealing with antitrust advice should not be enacted. Since this is not the formulation in the bill, and since we agreed ,to the formulation which is in the bill in the belief that it has the -meaning its language implies, we must object to the language of the l, Report. The Report misconceives the relationship of the Commission's consideration of antitrust advice to the guiding policy directives of i the Act. It misconceives the law on the responsibility of licensing i -i and regulatory agencies to consider antitrust policies. And it misconceives the nature of the controversies-which might come before 9 the AEC in its licensing process, and the proper course of public policy in resolving Lhose controversies. t '~ ~ ~7 ' p_

e-e.- ,t 6 Need for Antitrust Advice o a The Atomic Energy Act now provides for broadly-based antitrust advice to be given to the Atomic Energy Commission in ~ its licensing proceedings. This is in pursuance of the statement of policy in the Atomic Energy Act that " tis development, use, and control of atomic. energy shall be directed so as to... strengthen free competition in private enterprise." (Sec. 1, 42 U. S. C. 52011). In the past, the Commission has avoided the necessity for obtaining such advice by failing to make a Finding of' Practical Value as to nuclear reactors for electricity generation purposes. However, it has now become clear that the Con 1 mission must proceed to a Finding i of Practical Value. Not only is the practical value of nuclear plants ,- clear to all, a recent decision of the Court of Appeals for the District of Columbia leaves the Commission no alternative to making such a finding. City of Statesville v. FPC, Docket No. 21706 (Dec. 5,1969). A reading of that Court's opinion indicates that even if the Commission were inclined to make a limited or nonconclusive finding, as the f Report seems to intimate, the Court would not allow such an evasion si of the intent of the Act. We should not, however, assume t' hat the Commission would attempt such an evas[on, or be unable to arrive at ~ a speedy and forthright determins. tion of what is by now obvious to everyone. Rather, it s'eems clear that the Commission will shortly Y ~ 3

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i' -9 j be obliged to make a finding in accordance with the present state of o-facts. Thus, for the first time since the' Atomic Energy Act of 1954 was enacted,16 years ago, we now face the prospect of the advice ~ then provided for actually being given, and actually being taken into 1 account by the Atomic Energy Commission. - At precisely this jmeture, there has been a concerted attempt to cut back on the scope of that advice, and the means by which the Commission would give it application. This attempt should not succeed. l There is a pressing need for antitrust advice as to electric energy uses of nuclear power at this time. Practical and substantial controversies now exist. Numerous parties seek resolution of these issues in proceedings before the AEC, the FPC and in the courts. These controversies involve very practical matters. Resolving them could expedite the development of electric energy sources, and result in nuclear fuel uscs substantially improving the terms and conditions on-which electric energy is now made available in the country.'. ~ The development of the e1ectric power industry has propelled ? into prominence interconnection and interstate reliability arrangements. The questions of-the access of smaltrsystems to large generation plants, and to large power pcoling arrangements, are inextricably involved in these arrangements. The necessityfor joining ib large E e p* k l- ~

f' scale coordination arrangements gives companies the opportunity to [ follow restrictive practices in a number of respects, if they choose. In addition to determining who may participate in arrangements which may be necessary for survival in the industry, companies can, conceivably, refuse to lend th'eir facilities to the wheeling of power for benefit of non-participants, collectively determine to whom they will i sell power and on what terms, make defacto divisions of territories, l and the like. These issues are not esoteric. They have been raised i by. numerous petitiorirs before the Atomic Energy Commission, the I Federal Power Commission, the Securities and Exchange Commission, and by the Department of Justice in'two court suits. Exclusions from l unique facilities necessary to competitive viability, refusals to deal l with monopolistic effects, allocations of customers, all are well understood to be monopolistic tactics. All that is required is the translation of established antitrust principles into the specific situations existing in the electric utility industry. The AEC can do this, with advice from the Department of Justice. There is no justification for the 73C, or this Committee, to shirk its portion of the task of applyirig competitive policies. ~ The Department of Justice and the Atomic Energy Commission have agreed that advice should be given and considered in the terms originally outlined in the 1954 Act -- whether the license o'r activities ~.. - ~ H H ,e6m %mo

/. 11 s pursuant to it would tend to create or maintaina. situation inconsistent o. with the antitrust laws. Num'erous municipalities and representatives of smaller companies now are having difficulties in the electric utility industry, and have appeared before this Conimittee and appeeled for the' application of such advice. Only the major investor-owned utilities have opposed the giving of such advice, and the giving of it on the terms heretofore outlined. Representatives of such utilities urged that the AEC. consider only antitrust violations. l The charge was' made that the giving of advice on " broad and indefinite" terms would permit such expensive and indefinite litigation as effectively to slow down the licensing of nuclear plants, with little i s or no cain in the imurovement of electric utility generation and i , transmission patterns. There was some suggestion that the words " tend to" would take the Attorney General and the Comm$ssion far outside the scope of established antitrust concern, and lead to a consideration of peripheral and trivial issues, 'or contentions without established substance, so that private parties could press before the AEC numerous aberrant and insubstantial contentions, and the AEC would be required to give these contentions weight. .We do not agree with this view. But in order to allay these fears we have been willing to agree to the deletion of the wordh " tend to", leaving the. standard " create or maintihi a situation ~ Og* k g g b u j-.

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r. inconsistent with the antitrust laws'.'. This would permit consideration j I . of antitrust violations, and activities or arrangements not technically i violations of the antitrust laws, but clearly inconsistent with the policy and the purposes which these laws are designed to implement. As the ~ representative of the Department of Justice testified before the Joint Committee, the Department would draw on established categories of antitrust concern in giving advice under this kind of standard, and the Commission would be expected to draw upon such categories in its consideration of such advice. The Gist of the Renort The Report written to accompany the bill would, if followed, convert the meaning of " inconsistent with the antitrust laws" into the standard sought 'oy the utilities. It repeatedly asserts that the Commission should consider only violations of the antitrust laws or probable violations. In doing so, it betrays a wholly unfortunate and ~ distressing number of misconceptions and inaccuracies. First, the Report states that the provision in 105(c) for antitrust I advice has no relationship to an earlier provision requiring that the - Commission submit to the Attorney General all information at his disposal related to competitive problems. Nowhere does the Report fit the antitrust advice into the everall scheme outlined at the outset of the legislation. The statement of policy in the Atomic Energy Act (Sec. 1, 42 U. S. C. 11 2011) orders the Commission t5 '" direct the use ~ 6 G or

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o. of nuclear energy... so as to strengthen competition in free enterprise.". To this end the Commission is to advise the Attorney General of information-coming to its attention regarding any " utilization of special nsclear material or atomic energy which appears to... restrict free competition in private enterprise" (Sec.105(b), 42 U. S. C. 52135); is authorized to suspend any license given by it in the event of adjudicated antitrust violations (8105(a), 42 U. S. C. 8 2135(a)); and is directed to obtain and consider the advice of the Attorney Gener.a1 concerning competitive issues -- not antitrust violations -- connected with the issuance of its licenses (Section 105(c)). : Clearly, the Commission has been and is, under this scheme, chargsd with an affirmative policy of promoting competitive policies, and the state of competition in a free enterprise economy. If Yet this is precisely what the Report disavows. If The intent of the Act is illustrated in the 1954 dissenting report by Representatives Holifield and Price in protesting a version of the legislation which at the time of consideration "... reliev[ed) the Commission of the affirmative responsibility... to exercise its licensing authority in a manner to prevent the growth of monopoly or restraint of trade." (House Report No. 2181, 83rd Congress, 2d Session,

p. 128).

Representatives Holifield and Price stated'in their Report: "A review of Federal statutes demonstrates rather convincingly that many departments and agencies of the Federal Government are charged by law with such positive responsibility and authority to prevent or discourage monopoly or other restraints of trade, or to actively promote competition and participation by small business in various fields of endeavor. It is specious _ reasoning, in our opinion, to say that the Atomb Energy. Commission, as the agency charged with the administration of the atomic energy program, should pass wholly on to others the responsibility for taking. steps to insure equality of opportunity by all businesses, large and small, to participate in that program and to share the p'ivileges and benefits arising from it." r ee ^_ S =

e. The Law on Acency Consideration of s Antitrust Policies O The 1970 Report alleges that it is an "6xtreme view" that a ~ liceasing agency should consider clear breaches of antitrust policy 'as well as antitrust violations This is no estreme view. This is the existent law. Other licensing agencies, and numerous courts, have made it abundantly clear that this is, precisely what agencies now do, and must do. Thus, in Mansfield Tournal Comnany v. Federal Communications Commission. 180 F. 2d 28 (D. C. Cir.1950) a reviewing court stated: "Whether appellant has been guilty of a violation of theso [the antitrust] laws is not here in issue... whether Mansfield's activities do or do not* amount to a positive violation of law. they still may impair Mansfield's ~ ability to serve the public. Thus whether Mansfield's competitive practices were legal or illegal, in the strict sense, is not conclusive here. Monopoly in the mass communication of news and advertising is contrary to the ~ public interest, even if not in terms proscribed by the antitrust laws." t i Likewise, in Metrocolitan Television v. Federal Communications Commission, 289 F. 2d 874 (D. C. Cir.1961), the Court upheld a Federal, Communications Commission rule prohibiting television networks from representing affiliated stations in the sale of f i non-network time, saying: "Nor can we agree that the regulation in dispute is unwarranted on the basis of petitioners claim that its ~ promid;ation is rested merely on a potential evil of k 4 g e# I a .a i TT ~~~ ~~ ' ^ ~ r ~ 3.-

restraint.upon the independent responsibilities of. licensees affiliated with the networks and not upon a violation of the antibust laws. We need not decide whether the evil may , fairly be described as " potential?; For it is settled that practices which represent realistic dangers of competitive restraint are a proper consideration for the Commission..." In Northern Natural Gas 'Comoany v. FPC, 399 F. 2d 953, 973 (D.C.: Cir.1968) the D.C. Circuit Court remanded an FPC order approving a gas pipeline joint venture for consideration of whether the joint venture substantially le'ssened actual or potential competition, and pointed out two possible anticompetitive effects which would not be reached in consideration merely of ~ antitrust law violations. The Court warned of the possible anti-competitive effects of joint proposals by applicants to a regulatory commission which might limit the. agency's ability to judge individual proposals, and the possibility of future joint action or parallelism in activities outside the scope of the joint venture due to the closeness of the firms associated in a joint venture. The Securities & Exchange Commission is obliged to apply a standard which refers to antitrust issues, but in very broad terms. ,Section 10(b)(1) of the Public Utility Holding Company Act of 1935 requires that acquisition subject to that Act shall not be approved if: t k 4, = __m o .,.3 y _ ?

... y "such acquisition will tend toward interlocking relations or the concentration of control of public utility companics of a kind or to an extent de'trimental to, the public interest or the interest of investors or consumers." ihe SEC has recently had occasion to apply this test, and the Circuit Court of Appeals has required the SEC to consider claims of a group of New England electric utilities that a series of joint ventures excluding such small utilities would have anti-competitive effects violate of Section 10(b)(1) "as interpreted in the light of the public policy represented by the federal antitrust laws" Municioal Electric Association of Massachusetts, et al., v. SEC, 413 F. 2d 1052,1055 (1969). Thus, the law now stands that licensing and regulatory agencies consider and apply the policies of.the. antitrust laws. This has been the' practice for over twenty years, in several industries, in widely varying fact situations. The directive that the AEC consider whether activities would " create or maintain a situation inconsistent with the antitrust laws" calls for following this case law. Arouments for a Restrictive Intercretation P What judifications are advanced in the Report for limiting the AEC to a lesser scope of consideration? ,INrst, it is said that. .e consideration of antitrust policies on the basis now followec in e 4 s W .w as ge _ _ 3 i. ,.p.. g - ;

~~ -IT other Federal. agencies would lead to extensive litigation, and slow s down licensing. This misconceives the problem. If issues relating to established antitrust categolies were pressed in AEC proceedings, this simply means there are serious competitive, problems in the electric utility industry to be resolved. The advantage of considering these issues at the licensing stage is that in this context they may be .reso ved quickly and expeditiously. They,may be resolved on the basis l of practical judgments concerning substantial competitive effects, and the best means for avoiding such effects, without forcing the AEC into the constraint of acting as an antitrust court. Construction and operation plans can proceed after the resolution of these issues without further antitrust challenge, and possible disruption of arrangements made and settled upon. To say that AEC consideration of problana in 1 terms of antitrust policy should be discouraged, is to imply either that they are not of serious or significant concern, or that neither the' Department of Justice, the AEC, nor the courts are capable of, sorting out serious from trivial issues. The second argument advanced is that there would be too much ~ ..uncertaisty. This misstates the issue again. The major problems extant in the industry at this time are clear enough. The established ~ categories of antitrust concern age clear enoug51. (In this connection, M e M 9 ,F ~ .. ~... 7 :;.

the Report makes an elementary. error; unfortunately, illustrative of-l. - a' lack of acquaintance with the antitrust laws. It refers to the " unfair methods of competition" language of Section 5 of the Federal . Trade Commission Act as indicative of the range of uncertainly involved -in the antitrust laws. Section 5 of the Fe'defal Trade Commission Act is not one of. the antitrust laws, as defined in the Clayton Act. While it does encompass some practices which are antitrust violations, it also encompasses an area -of concern outside that generally falling within the general ambit and policy of the Sherman and Clayton Acts.

Thus, the Report conveys a misleading impression of vagueness, based on a misunderstanding of law.)' If companies attempt to align their operation with the policy of the antitrust laws, thay can do so.

They have eighty years of precedent to guide them. They court uncertainty only if they' try to skate too close to the li.no of monopolization and ./ exclusionary practices. Although it is not articulated, a feeling that it is unfair to put pressure on utilities to meet antitrust principles in a licensing procedure rather than in a court ny underib the approach adopted. in the Report. The answer to this is clear enough. First, it is done ~ elsewhere, as before the Federal Communications Commission.

Second, the mandate to' promote free competition in the AEC Act is clear, W

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9_ direct and specific. Third,.a party before the AEC would have the =- opportunity to address such advice as would be given. Fourth, we ~ may not expect the AEC to be arbitrary or capricious in its attempt l to integrate the national policy in favor of dompetition into its decisions. At one point, the Report intimates that the atomic energy field should not be burdened with greater responsibilities for implementation of the. competitive policy than other fields. This, we think, is entirely misguided. First, it is appropriate that antitrust policies be given special attention in n'ew and developing fields. ' It is extremely difficult to go back and undo inappropriete industry structures built up in the 1800's and early 1900's, before the antitrust laws were well developed. If the economy is to become more competitive, it must do so as a f result of the gradual-erosion of old monopoly positions, and the initiation of new industries in a competitive mold. Therefore, we. should be -sure that as new industries develop, and have their impact upon older and established industries, they are' guided in accordance with the policy in favor of competition. Second, the massive investment made by the Government in nuclear energy,' on behalf of the general public, is of itself, grounds for using the industry to make -tlie nation's economy. more competitive. ~

• a This is the course now set out in the Atomic Energy. Act.

It is ~ the course we should follow now. We should nbE permit the. pleas 4 e g -r ~ ge_ * ~ e* o" '

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of an industry which would prefer to avoid a full and detailed

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' consideration of competitive policies to deter us from following ' through on this course as respects atomic energy, precisely at the time when it may have substantial practical effect. ' Conclusion At this point, we face the decision whether to enact this 1 legislation, with this Report, or not to do so. The language of the bill would permit appropriate antitrust advice to be given, and appropriate consideration of competitive issues. I do not think the Department of Justice wou1d or should be inhibited by the Report language, nor should the AEC. Were the AEC to attempt to limit its consideration of competitive issues to the scope delimited by the Report, it surely would be challenged in court. With the Report reading as it now does, the possibility exists that if the Commission follows the language of the bill and governing case law, and considers - antipust policies as well as technical violations of law, this action would also be challenged. Thus, the Report could engender precise.ly l the sort of litigation and controversy which it deplores. And, if the bill were interpreted as. the Report seems to suggest, the legislation would bb restrictive and retrogressive. All things considered, it would ~ be better to follow the law now on the books. een - g ~ W

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.~. .? Tha legislation is not necessary now. The Report greatly exaggerates the need-for legislation on this issue. The AEC can, and must, proceed to an honest and. comprehensive Mnding of Practical Valve for nuclear plants generating electricity for commercial . purposes. The standard for antitrust advice now in the law is clear and ._ broad.,;.There is no..noed for. legislation.which-would-restrict that ' standard. Thus, unless the errors in this Report can be stricken and new language substituted, it would appear better that the portion of this bill dealing with antitrust advice should be deleted, and only those portions deal.'7g with the' provisions of nuclear fuels and radiation standards be enacted. p* Enclosure - Letter dated September 8,.1970 from. Walker B. Comegys Acting Assistant Attorney General Antitrust Division-( I i p t t l ( I-I t ~ ]*-

-2 - ENCLOSURE TO APPENDIX A [cprintruf of 3nslice Fa*W"S a= t C O P N September 8, 1970 Honorable George D. Aiken United States Senate Washington, D. C. 20510

Dear Senator Aiken:

This is in reply to your letter of July 30, 1970, ask.ing-for comments on the language of a draft report on the version of the " practical value" legislation, derived from S. 212, H.R. 8289,~and H.R. 9647. First, I will observe that we attach a great deal of importance to antitrust enforcement in the electric utility industry. Because of certain natural monopoly aspects at the distribution level, and the existence of FPC and SEC regulatory authorities, this area has seen relatively little antitrust activity in the past. However, the growth in inter-connection and the emergence of new patterns of bulk power supply have pressed a number of issues with important competitive aspects to the' fore. The ways in which those issues are determined will substantially affect the nature of the electric utility industry in the future.

Moreover, examination of these issues has revesled practices of long standing which, in our opinion, require correction.

Such practices are involved in our Otter Tail and Tampa Electric cases. In this context, we have expected that the provision of antitrust advice to the AEC in its licensing proceedings could be of assistance in resolving competitive problems in the electric utility industry, and in avoiding the need for litigation in that industry. The directive that the Commission would consider advice as to matters " inconsistent with the antitrust laws" could allow sufficient' scope to achieve these objectives. The Department believes it reasonable that it give advice ~ to executive, licensing, and regulatory agencies, not merely as to technical violations, but also as to the general scope and purposes of antitrust policy, and as to arrangements in-consistent with that policy. This has been our function in advising other agencies. And the Courts have made it clear e

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l l l that the scope of agencies concern with antitrust issues should be similarly defined. This has 'oeen explicitly held / in such cases as Municinal Electric Ass'n of Mass. v. SEC 413 F.2d 1052 (1969); Mansfield Journal Co. v. FCC, 18U~~, F.2d 28 (1950); McLean Trucking Co. v. United States, 321 U.S. 67 (1944); and many otiters. The last-cited case is particularly worth noting. There the Department had argued that a regulatory agency must make a finding of whether the antitrust laws would be violated by a proposed transaction; and, if it so found, disapprove the transaction. The Court held that it was not the agency's function to determine antitruct violations; rather it was required to estimate the scope and appraise the effect of anticompetitive situations presented it, and accommodate its decision, and any other policies it was charged with implementing, to the general policy in favor of competition. This has become governing law, and has been followed in a great many decisions. Notwithstanding the state of the law, the report language can be construed to indicate that the AEC should direct its attention only to antitrust violations, or the probability of such violations. This discrepancy between the language of the bill and the report could lead to liti-gation over the meaning of the bill. If the bill and the report were interpreted to restritc the AEC to considering only antitrust violations, our activities could be hampered. First, to the extent that ownership an'd operating patterns can be ordered in a procompetitive fashion, they tend to minimize the extent to which antitrust violations would arise. This avoids the need for later extensive litigation. To choose an example in another area, FCC rules limit the number of broadcast licenses which can be owned by any one entity, and the FCC has recently promul-gated tentative rules prohibiting common ownership of CATV and broadcast operations. These are prophylactic measures. They would avoid the cccurrence of mergers which would violate the antitrust laws, and of monopolizations by direct investment uhich might not come to the attention of federal authorities, or not be thought large enough to justify suit when more pressing matters claim enforcement attention. Although the AEC may or may not choose to proceed by similar rules, the example illustrates the proposition that a licensing agency can appropriately take action beyond that tied to specific violations of law. As testimony in N 2 O'- i I '..,s, s

..J~ I the hearings repeatedly pointed out, the electric utility ,j industry now has before it very significant problems con- ~[. .cerning.small-system access to generation facilities, transmission facilities, and pooling arrangements. In addition, there are general-questions concerning con-- tractual terms of power sale, refusals to wheel, and de facto. market allocations. It is not possible to antici-pate in advance.all the various ways in which the AEC might promote free enterprise competition in this industry. .without need to consider whether a technical vio-However,f law occurred, the Commission could implement lation o competition in ways such as the following: adopting a policy of licensing which, while promoting economics of scale, increases or prevents undue decrease in the number of power sellers -- lessening concentration of power supply in the hands of a few sellers (oligopoly) and thus diminishing tendencies toward parallelism of action rather than compe-tition; preventing pre-emption by few sellers of access to necessary resources such as fuel, cooling water, and so forth; lessening opportunities of power suppliers to dis-criminate against or take unfair advantage of distributors who afford " yardstick competition" in distribution; and dealing with various types of proposed joint ventures to ensure that participants do not obtain decisive competitive advantage over nonparticipants who have no reasonably ade- 'quate. alternative source of low-cost power. Second, court precedents consistent with some inter-pretctions of the report language could hamper our work before other regulatory and licensing agencies. The Depart-ment-frequently intervenes before regulatory agencies in other fields. As I noted before, these bodies and the courts have repeatedly held that the agencies are not re-quired to determine antitrust violations, but cre required to determine whether and how antitrust policies may apply to the decisions they_are called upon to make. If pre-cedent for a lesser scope of consideration were established in this report, the result could be some diminution in the . effectiveness of our work with these agencies. Finally, AEC determination of issues of technical vio-lations of the antitrust laws could complicate to some extent antitrust litigation in the courts. Numerous con-tentions can, and probably would, be made concerning the effect to.be given in a government or private antitrust suit of a_ prior AEC determination that an' antitrust viola-tion did orliLd not. exist. Resolving the various possible claimed effects of AEC determinations.could entail a significant amount of court litigation. 3 ,e r f' s t..* ) } .-.m .i---

~ ... 2. Thus, based upon our experience, and the relevant court precedents, we think the report misconceives the nature of the antitrust advice to be given licensing and regulatory agencies, and the sort of consideration these agencies have been required to give competitive policies. The result is a narrow and restricted view of the means of application of the nation's competitive policies. We regret that this is the case, and that the Committee members apparently are not fully advised as to the mistakes in the report. This is particu-larly regrettable since, were the AEC to be limited to the narrow secpe which might be iniplied from the report, the effect could be to impose unnecessary litigation burdens on us, 'he courts, and the electic utility industry, and to ha.aicap to some degree our work before other agencies. Sincerely yours, WALKER B. COMEG S Acting Assistant Attorney General Antitrust Division 4 W f - 6 6 --ese m e s.. - ~ -h. l

3 ..y o d.- -i .o ?- SIDE BY SIDE COMPARISON OF A PORTION OF THE y JOINT COE1ITTEE DRAFT AND FINAL REPORTS ein. Joint Committee Joint Committee Draft Report Final Report July 1970 September 1970 9 The committee deemed it impractical and unwise to extend the The committee did not deem it advisable to extend the boum boundaries of the antitrust considerations'to be taken into account of the considerations to be taken mto, account by the Co, 'j issmn by the Commission beJond v laws. N d* ""I T m - ws and t,he pohcies clearly with, the, committee recogm. iolation of the antitrust laws. To.begin I " he situnt n is dilierent m respect, to AEC, underlying thoso zed that, there would be no particular s develotunental comb, ation of factors or set of enteria that could mean,mgfully gmde regime; here Government imids are extensively devoted to the m the Commissmn m regula.ory venturing apunst such, abstractly research and development aspects of atomic energy and the Conunis-despised but hard to identify dragons as unfair competition ' (where sion has the duty not only to see to it that the funds aro emploved to not a violation of law).,Ilesides, tije conunittee beheved that concerns best advantage m relation to the specific statutory missions involved of flu,s general nature, m coytm,etion with the regulation of but to be mindful of the general objective of strengthening free com-commer-cial power petition in private enterprise. The absence of specific, guiding criteria without sub.sgenerating facilities that ar,c constructed and operated tmrard this objective, where tho expense of the activity is borne by <ly from the AEC are, at il Comnu3smn, the,feenn,s,of other agenc,ns advanced stage, het ter leftt:es and, Exchang infliction on private enterprise of the convictions of a Federal agency, to the respective domtun ies such as t the Govermnent, does not amount to an intolerably gross and unfair .smn, nnd State bodies. l'hc s,ituation is different in respect to AEC s developmental though these ma principh s. licre,y often he based on generally debatable philosophical repme; here Government funds are extensively devoted to the too, the connnittee, in its authorization process and research anil development aspects of, atonn,e energy and the Comnus-m its " watchdog" role, is in a position to react with respect to any ston has the duty not, oijly to see to it,that the funds are employed to particular Commi.,sion measure relative to the objective of strength-N best advantage in relation to the specific statutory missions involved ening free competition in private enterprise which the committee may N but to be mn3dful of the general objective of st rei believe to bc insupportable or unwise; the committee couhl not so petition m, pnt, ate enterpnse. 'l he absence of speca,qihemyg fren,co"!- ellectively react in context of a licensing matter. The conunitteo he, gual,mg entena recognizes that, there is not, a clear boundary between antitrust t+ toward tins objective, where the expense,of the activity is borne 17 the G considerations in relation to the. strengthening JI free competition in milict,overmnent, does not symount to an ipt deiably gross and unfair i X mn on pnvate enterpnse of the convictions of a Federal agency, free enterprise and measures to accomplish such objective for reasons in principles. Here, too, the comm(ittee, in its authon,tah,le philosophical other than the antitrust laws or underlying antitrust policy; the Com-though these may often be base I on generally dcha zation process and inission will have to exercise diserctiod and judgment. m its "watclulog" role, is in a position to renet. with respect to any particular Conunission measure rehttive to the objective of strength- .ening free competition in private enterprise which the committee may believe to be msupportable or mnvise; the conunittee could not so ofTectively react in context, of a licensing matter. i i}}