Television programs developed in conjunction with the marketing of toys, which was once prohibited by federal regulations, are thriving in the free market conditions permitted by the current Federal Communications Commission.

(A) Television programs developed in conjunction with the marketing of toys, which was once prohibited by federal regulations, are
(B) Television programs developed in conjunction with the marketing of toys, a practice that federal regulations once prohibited, is
(C) Developing television programs in conjunction with the marketing of toys, as once prohibited by federal regulations, is
(D) Federal regulations once prohibited developing television programs in conjunction with the marketing of toys, but they are
(E) Federal regulations once prohibited developing television programs in conjunction with the marketing of toys, but such programs are

The correct answer is option (E) Federal regulations once prohibited developing television programs in conjunction with the marketing of toys, but such programs are.

Explanation:

Letter A is incorrect because the relative clause which makes the sentence confusing.

B is also incorrect because the verb at the end is singular while the subject is plural.

Option C is incorrect because television programs required for thriving.

Letter D is also incorrect because the subject they gives the sentence an ambiguous meaning.

Option E is the correct answer because the connectors and verbs are used properly.