Here my explanation
A)The government predicts that, for consumers and businesses that make a large number of long-distance calls, the Federal Communications Commission's recent rate cuts will greatly reduce costs
I didn't like it so much at te beginning (the comma after the "that" confused me) but it's correct and I chose it after POE.
B)The government predicts that costs will be greatly reduced for consumers and businesses that make a large number of long-distance calls by the Federal Communications Commission's recent telephone cuts
as mahesh004 wrote, confusing meaning
C)The government's prediction is, for consumers and businesses making large number of long-distance calls, costs will be greatly reduced by the telephone rate cuts made by the Federal Communication Commission
Use of passive voice. Better to avoid it.
D)For consumers and businesses that make a large number of long-distance calls, the government's prediction that the Federal Communication Commission's recent telephone rate cuts will greatly reduce costs
Confusing meaning. It seems that the prediction is going to reduce costs
E)For consumers and businesses making a large number of long-distance calls, the government predicts that the recent telephone rate cuts that the Federal Communication Commission has made will greatly reduce costs
Federal Communications Commission's recent rate cuts better than recent telephone rate cuts that the Federal Communication Commission has made.
So it's A. The question seems difficult because it's long, but not so much after analysed.