Some economists and analysts have said that the Telecommunications Act of 1996 has brought forth a...

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Some economists and analysts have said that the Telecommunications Act of 1996 has brought forth a structural transformation in the telecommunications industry. Write an essay about the Telecoms Act in which you cover the following points: a. The provisions of the bill designed to remove barriers to entry into the local and long distance telephone market. b. The provisions which undo key aspects of the 1992 consent decree (or Modified Final Judgment), with special emphasis on elements pertaining to the entry of Bell Operating Companies into the long distance (or interLATA) market. 2. Answer the following questions based on the diagram above. a. Does the diagram above describe a case of unsustainable natural monopoly? Explain. b. Compute profits or losses under the marginal cost pricing option. c. Write an equation describing a two-part tariff based on the assumption of three hundred and fifty-two (352) customers. The two-part tariff will generate a normal profit for Big Butte, assuming the fixed fee (F) is not exclusionary. d. Based on the two-part tariff you derived in subpart (1) above, compute the utility bill for customer that used 300 kilowatt hours per month. This diagram describes cost and demand conditions facing Big Butte Power, a regulated monopolist 2 3. Do you think there are economies of scope between long distance and local telephone service? How about between local telephone service and long distance service? What difference do economies of scope make for the optimal regulatory policy? 4. The basic accounting equation is given by: ( ) 1 p qi Expenses s RB n i ? i ? ? ? a. Explain this equation b. What is the “rate level” problem and how does it differ from the “rate structure” problem. c. Suppose a regulatory commission selected the “original cost” method instead of the “replacement cost” method in valuing the rate base. What are the implications for rate levels?
	
Document Preview: ECON 4333  
Spring 2017 
Professor C. Brown 
Homework Assignment #4 
  
This assignment is worth 20 points and is due on Thursday, May 4. .  Send as an email 
attachment to  XXXXXXXXXX. Or, you can fax to XXXXXXXXXX. 
 
1. Some economists and analysts have said that the Telecommunications Act of 
1996 has brought forth a structural transformation in the telecommunications 
industry. Write an essay about the Telecoms Act in which you cover the following 
points: 
a. The provisions of the bill designed to remove barriers to entry into the 
local and long distance telephone market. 
b. The provisions which undo key aspects of the 1992 consent decree (or 
Modified Final Judgment), with special emphasis on elements pertaining 
to the entry of Bell Operating Companies into the long distance (or 
interLATA) market. 
 
This diagram describes 
cost and demand 
conditions facing Big 
Butte Power, a regulated 
monopolist

2. Answer the following questions based on the diagram above. 
a. Does the diagram above describe a case of unsustainable natural 
monopoly? Explain. 
b. Compute profits or losses under the marginal cost pricing option. 
c. Write an equation describing a two-part tariff based on the assumption of 
three hundred and fifty-two (352) customers. The two-part tariff will 
generate a normal profit for Big Butte, assuming the fixed fee (F) is not 
exclusionary. 
d. Based on the two-part tariff you derived in subpart (1) above, compute the 
utility bill for customer that used 300 kilowatt hours per month.2 
3. Do you think there are economies of scope between long distance and local 
telephone service? How about between local telephone service and long distance 
service? What difference do economies of scope make for the optimal regulatory 
policy? 
4. The basic accounting equation is given by: 
n
 
p q? Expenses?s(RB)
?
i i
i?1
a. Explain this equation 
b. What is the “rate level” problem and how does it differ from the “rate 
structure” problem. 
c....

David · Accepted Answer

Q1) 
Telecoms act of 1996: 
The Telecommunications Act of 1996 was designated as the first modernized act of the 
Telecommunications Act. This act was signed by the president and has created a significant 
change American Law of Telecommunications in. Due. It was the first time the Internet was 
included in broadcasting and spectrum allocation. And after 1 cc. "(Federal Communications 
Commission), the goal of the law was to enter everyone in the communication business Do not 
let any business communication. Compete with each other. 
Regional bell operating companies: 
 To promote competition in long-distance and local markets, the 1996 Act created this 
process through regional hood operating companies that were not allowed under the 1982 
amended final judgment to bring the competition authorities to an end. Former monopoly Bell 
System.

Some economists and analysts have said that the Telecommunications Act of 1996 has brought forth a structural transformation in the telecommunications industry. Write an essay about the Telecoms Act...

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