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Local phone companies have monopolies on phone service [#permalink]
08 Feb 2008, 05:20
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Local phone companies have monopolies on phone service within their areas. Cable television can be transmitted via the wires that are already in place and owned by the phone companies. Cable television companies argue that if the telephone companies were to offer cable service, these telephone companies would have an unfair advantage, because their cable transmissions could be subsidized by the profits of their monopolies on phone service.
On the basis of the information provided in the passage above, which of the following questions can be answered? (A) Are phone companies as efficient as cable companies in providing reliable and inexpensive service? (B) If phone companies were allowed to provide cable service, would they want to do so? (C) Do the cable companies believe that the local phone companies make a profit on phone service? (D) Are local phone companies forbidden to offer cable service? (E) Is it expected that phone companies will have a monopoly on cable service?