Dueling for dial tones.

• Author: Beck, Bill
• Position: Competition in the telecommunications industry in Indiana

Choice of local phone service is on the way for Hoosiers.

First it was the breakup of Ma Bell. Then it was the cutthroat competition for long-distance service. Now, many Hoosiers will be getting a choice of who will provide their local telecommunications services.

Not since federal judge Harold Greene's order breaking up the Bell system in 1983 has the telecommunications industry faced the prospect of more out-and-out competition. The reason behind the increase in competition this time is the passage of the Federal Telecommunications Act of 1996. Telecommunications companies have been able to compete with AT&T for long-distance customers. But for the first time, the new telecommunications legislation requires local phone-service providers to cooperate with competitors who want to service local markets.

Some are calling it an impending donnybrook, at least for local service providers in Indiana.

"That's an understatement," says John Koppin, president of the Indiana Telecommunications Association in Indianapolis. "It's clear there will be local competition. That's the underlying principle of the act."

How that competition will shake out is the question that Koppin and others in the industry in Indiana are currently asking themselves. Koppin, a 14-year veteran with the association, notes that under the act, competition can encompass either resale or facilities-based competition.

Resale will operate much the same way that it has in long-distance markets for the past decade, Koppin explains. New local service providers will be able to come into a market, negotiate with the current local carrier to buy blocks of local phone service at wholesale rates, then resell the service to the public.

Facilities-based competition is another matter. Under the terms of the act, barriers to entry to local markets are lowered across the board. Rural telephone systems and major national carriers like MCI, cable companies and electric utilities - any company that runs wires into homes and businesses - could conceivably accomplish facilities-based competition for local telephone service.

All of the established local service providers in Indiana - including Ameritech, GTE and Sprint United Telephone - say they welcome competition on a local level. And several national carriers and resellers have already indicated an interest in entering local markets, especially in Indianapolis. Almost everybody involved says the consumer will be the winner when competition comes to...