TAILIEUCHUNG - Microeconomics for MBAs 47

Microeconomics for MBAs 47. The Economic Way of Thinking for Managers. Microeconomics for MBAs develops the economic way of thinking through problems that MBA students will find relevant to their career goals. Maths is kept simple and the theory is illustrated with real-life scenarios | Chapter 14 Business Regulation 4 To the extent that some available frequencies have not been put into use for radio and television transmission the FCC has restricted entry into the broadcast business. It has also held up the introduction of cable service which would vastly increase television programming variety. Yet in other ways the agency has sought to increase competition. At one time the American Telephone and Telegraph Company AT T had a virtual monopoly over the sales of telephones. Beginning in the late 1960s however the FCC moved to introduce competition into the sale of telephone equipment and the delivery of long-distance service. In 1984 AT T was separated from its twenty-two operating companies which were consolidated into seven regional holding companies. AT T maintained its manufacturing company Western Electric and the jointly owned Bell Laboratories. See the Perspective on the AT T break-up on page 21 in this chapter. The Federal Energy Regulatory Commission FERC The Federal Power Act of 1930 established The Federal Energy Regulatory Commission FERC . It is in the Department of Energy. Its authority was limited at first to the regulation of waterpower. In 1935 however the FERC was authorized to regulate the rates service corporate practices and security issues of interstate electric utilities. Beginning in 1938 it was empowered to fix rates for wholesale interstate natural gas service. At its zenith FERC regulated electric gas gas and oil pipelines and water power sites. The commission s five members serve five-year terms. In the late 1960s and early 1970s the FPC came under attack for its tight controls on the price of natural gas. In 1975 1976 and 1977 several states experienced serious shortages of natural gas when the FPC-restricted price -- only one-quarter of the going price in producer states like Texas -- severely discouraged out-of-state sales. Natural gas was partially deregulated in early 1983 but was re-controlled in 1984 for two more

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