I'm so glad you both asked about this question! There is a ton of information in the stimulus of this
inference question. Let's step back and lay it out simply before assessing the answer choices.
If computer network legislation modeled on past legislation, then either use 1) telephone legislation (resp. only for transmission) or 2) public broadcasting service legislation (resp. also for content).
Computer network serves both functions (private message or public information).
Neither legislative model is appropriate.
The first statement tells us that if we're going to model past legislation, we only have two options (telephone and public broadcast legislation). The last statement tells us that neither of those options is appropriate. That leaves us with exactly zero possible pieces of past legislation on which to model the planned legislation, which is essentially what
(B) says.
Consider this analogy:
If you want to get the lunch special, you must order either the Reuben or the pastrami. But you are allergic to pastrami, and find Reuben sandwiches horrific. Therefore, neither are appropriate lunch choices for you.
What can we conclude? You ain't getting the lunch special.
You may both have overlooked that the first sentence limits the possible options to the two models.
The Unconcludable(A) We have no support for the idea that legislation is required at all, much less that it's required for the purpose of privacy.
(C) The stimulus discusses modelling the legislation on that of telephones/television networks, not modelling the actual technology.
(D) Where did legislators come from? experience?
(E) Though there is a slight detail creep here from "public broadcasting service" to "television network", the far more damaging issue is the word "merely", which means "only". We know from statement 2 above that a computer network can serve the functions of both a telephone system and a television network. However, there's nothing to indicate that that is ALL it can do, which is what the "merely" here suggests.
Please let me know if this completely answers your questions!