Ma Bells Vie for One-Stop Local and Long-Distance

Article excerpt

THE telecommunications industry is poised to break through the walls of its last monopoly: the local phone company.

In a few years - perhaps sooner - many consumers will be able to choose who handles their local calls just as they choose among long-distance companies today.

The benefits include more services and, possibly, lower prices. The most surprising benefit, however, may be the simplicity of it all.

Before its court-mandated breakup, AT&T handled everything: One bill covered local and long-distance service. Customers did not have to figure out who to contact for a service problem. They called Ma Bell.

The new era will be similar, except there will be several Ma Bells.

"That's what we are headed back to," says Larry Strickling, vice president of public policy for Ameritech Corporation in Chicago. The company is vying to become a one-stop local- and long-distance provider.

"There will be several strong competitors out there, if given the chance," says Daniel Spulber, a management professor at Northwestern University's Kellogg School of Management in Evanston, Ill. Although many hurdles remain, competition is coming to local phone service, he adds. "It's absolutely inevitable."

Illinois may become the test-bed for local competition. In the past year, two telephone companies have filed plans that would open the door to more players. AT&T last week released its own vision of a competitive market test for Illinois. State regulators have been working on their proposals to open up the local market.

"The time has come to look at it," says Charlotte TerKeurst, director of telecommunications policy at the Illinois Commerce Commission. Ameritech's bold plan

Of all the plans on the table, Ameritech's is the boldest. The company, which handles local phone service in Illinois and four other states, says it will give up its Illinois monopoly if, in return, it can offer long-distance services. Of the six other regional Bell operating companies, only Pacific Bell has offered anything close to such a plan.

"Ameritech is going in the right direction," says William Baumol, director of the Starr Center for Applied Economics at New York University.

The potential stumbling block is timing. AT&T argues that Ameritech should open up its local phone service before it moves into long-distance service. …