Dueling dial tones: why local phone competition has been slow to arrive.

• Author: Cline, Sandra B.

Competition for local telephone service in Indiana is somewhat like a family vacation, says Sandy Ibaugh, director of telecommunications at the Indiana Utility Regulatory Commission.

The car is loaded with suitcases, you back out of the garage and as soon as you reach the end of the driveway, the kids begin to chorus, "Are we there yet?"

"We are just at the end of the driveway," Ibaugh says. Potential providers agree.

For more than a year, telephone users have been anticipating the promised land of lower prices and bundles of Internet connections, cable television and cellular, local and long-distance telephone services. But providers and regulators have found the road longer and bumpier than expected.

"All of us in the industry initially thought we would be in the market much sooner," admits Oriano Pagnucci, a Chicago-based spokesman for AT&T. "I don't think anyone anticipated how difficult it would be. It's much more cumbersome to get into the local market than to get into the long-distance market."

While AT&T wants to be in all markets as soon as possible, reality demands that the company prioritize. "If you look at just the expense, we can't do it all overnight," Pagnucci says. "We are hopeful that fairly soon we will be offering Hoosiers a choice."

AT&T is one of a few companies who have the regulatory paperwork ready to proceed as soon as the practicalities are ironed out. Another is Teleport Communications Group, or TCG, which may be a bit further down the road toward actually signing up customers.

"There's a lot of behind-the-scenes work going on right now," according to Madelon Kuchera, vice president of regulatory and external affairs at TCG. "Hopefully if both parties (TCG and the current local provider, Ameritech) are in a very cooperative mood, we are talking a couple of months."

TCG's advantage is a backbone of fiber-optic network already in place encircling the metropolitan Indianapolis area. More than 140 route miles snake through the capital city, Carmel, Fishers and Greenwood, with a loop servicing the Indianapolis International Airport planned for this summer. The company has been offering private lines for internal communications to companies since 1994, and is almost ready to extend that service and become a full provider of local telephone service.

"We are taking a different approach than a carrier like AT&T," Kuchera explains. TCG will be a facilities-based provider from the first day, while AT&T initially will operate as a reseller.

Those are the two options available for companies whishing to enter the local telephone service market. Resellers will buy service at a wholesale discount from an existing local provider, such as Ameritech or GTE, and resell the service under its own brand name. All that's required for permission to enter the market as a reseller is a Certificate of Territorial Authority from the Utilities Regulatory Commission.

Facilities-based companies will construct and use at least some of their own facilities, perhaps buying services from the existing provider to augment that construction. Long-distance companies, such as AT&T, tend to have large switches available that can be adapted to local-service use, but no lines into businesses or homes. Cable companies usually have lines but no switches. In either event, the new provider would utilize its...