application of return on capital investment

1. __T/F__ Under the rate-of-return regulation, plant depreciation is handled by subtracting the depreciation from the rate base and by the application of return on capital investment

1. __T/F__ Under the rate-of-return regulation, plant depreciation is handled by subtracting the depreciation from the rate base and by the application of return on capital investment

a. True

b. False


2. Only _________ can override FCC?s initiatives, rules, regulations and policies

a. States

b. Congress


3. __T/F_ One way to provide additional revenues for the RBOCs in the MFJ was to retain control of the Yellow Pages

Page 2 of 6

a. True

b. False


4. _T/F___CSS7 gave phone companies the ability to add new features without adding any additional equipment costs

a. True

b. False


5. __T/F__ Cross Subsidy is a practice where a firm uses losses from a product or service to offset corporate taxes against gains

a. True

b. False


6. _T/F__ U.S. cable operators are regulated as common carriers for price and carriage, since now they provide telephone, TV and Internet services

a. True

b. False


7. _T/F____ Carriers must obtain a certificate from the FCC prior to the extension of existing lines or construction of new lines, except when 1) the line constitutes part of an interstate line, 2) local, branch, or terminal lines do not exceed ten miles in length, or 3) a line is acquired under Section 221 of the Communications Act.

a. True

b. False


8. _T/F__ The total element long-run incremental cost model is the current attempt by the FCC to implement a rational model for regulating rates

a. True

b. False


9. _______ is responsible for establishing Internet-related LAN standards such as the Wi-Fi specifications

a. W3C



10. Federal Communications Commission was charted under the Act of ________________

a. 1934

b. 1996


B. Multiple Choice (s).


11. Which of the following is not true about the Telecommunications Act of 1996?

a. Allowed all telephone carriers, utilities, and cable television companies to sell both local and long distance calling.

b. Mandated that the local telephone companies form separate companies to supply connections to companies that competed with them.

c. Deregulated cable TV.

d. Long distance carriers lobbied for the ability to expand sales to offer local services.

e. a) and c)


12. Which of the following communication businesses are not considered common carriers?

a. Broadcasters

b. Cable Operators

c. Internet Service Providers

d. Telephone Companies

e. a), b) and c).


13. Broadcast licenses awarded by the FCC:

a. May not be transferred (sold).

b. May be transferred without FCC approval.

c. May be transferred, but only with FCC approval.

d. May be auctioned off to the highest bidder.

e. a) and c).


14. Which of the following statements are correct.

a. Quality of Service (QoS) is the method by which traffic is prioritized. The parameters of QoS are availability, information transfer accuracy, priority and delay.

b. Network congestion occurs when demand for bandwidth exceeds the bandwidth capability. The congestion can lead to a bottle neck at various nodes on the network or it can also cause packets to get lost.

c. In point-to-multipoint communication the provider can server multiple customers using one line.

d. All of the above

e. a) and c)


15. Which of the following organizations is / are responsible for establishing common network technical specifications and standards for the Internet?

a. Internet Engineering Task Force (IETF)

b. World Wide Web Consortium (W3C)

c. Institute of Electrical and Electronic Engineers (IEEE)

d. All of the above

e. a) and c)


16. Which one of following has the FCC traditionally NOT identified as a policy objective that allegedly leads to the promotion of the public interest?

a. Diversity.

b. Competition.

c. Subsidization.

d. Localism

e. c) and d


17. In order to obtain a broadcast license from the FCC, an applicant must:

a. Be a U.S. citizen, or if a corporation, must be owned mostly by U.S. citizens.

b. Demonstrate adequate financial qualifications to construct and operate a station.

c. Show that they are of good character.

d. All of the above.

e. b) and c)


18. The FCC stipulates that children’s television programming must:

a. Be aired at least three hours a week.

b. Not consist of program-length commercials.

c. Contain buffers between commercials.

d. All of the above.

e. b) and c)


19. The Telecommunications Act of 1996 requires:

a. Cable television networks to adhere to safe harbor guidelines for indecent programming.

b. Television set manufacturers to install V-Chips on new sets.

c. Broadcasters to limit the amount of violent programming they air during prime-time viewing hours.

d. All of the above.

e. a) and b)


20. Programming that falls under the FCC’s definition of indecency:

a. May only be shown on cable television.

b. May be broadcast on stations during the “safe harbor” from 10 p.m. to 6 a.m.

c. May be shown on cable television without adhering to the safe harbor guidelines that apply to broadcasters.

d. b) and c)

e. a) and b)

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