High School

State utility commissions used which method to regulate telephone company prices?

a. Rate base, rate of return regulation
b. Antitrust regulations
c. Common carrier regulations
d. Decency regulations

Answer :

a. State utility commissions regulated telephone company prices using the rate base, rate of return regulation method.

  • State utility commissions used the rate base, rate of return regulation method to regulate telephone company prices.
  • This method ensures that the rates charged by a utility are fair both to the company and to the consumers.
  • It allows the company to cover its operational costs, earn a reasonable return on investments, and maintain infrastructure while protecting consumers from excessively high prices.

Hence the correct option is (a).