Lords of the rings lose their local sovereignty.

• Author: Williams, Christopher C.
• Position: Telephone companies in North Carolina

Another monopoly bites the dust. Last year the General Assembly unanimously passed a bill opening local phone service to competition.

It promises to be an all-out slugfest, as long-distance powerhouses such as AT&T Corp. and MCI Communications and cable giant Time Warner Inc. go up against BellSouth, Carolina Telephone, GTE and a host of smaller players prepared to protect their turf.

Who stands to benefit? Almost everyone in the Tar Heel State, say supporters of competition, because deregulation will usher in lower telephone rates, better quality and a wider variety of services.

But if history is any guide, the big winner will be business. The 1984 breakup of the AT&T long-distance monopoly brought a slew of companies into the market that has since forced rates down 60%. As the local-service market is deregulated, competing companies are expected to shower heavy phone users with discounts and creative packages to win their business. Competition "will be extraordinarily positive for the business community in North Carolina," says George Mattingly, senior vice president of telecommunications at Charlotte-based First Union Corp.

The seven regional Bells dominate local telephone service, which has grown to a $100 billion-a-year business, $1.1 billion in North Carolina. Atlanta-based BellSouth controls 52% of the North Carolina market. Carolina Telephone has 25%, and Centel has 6%. (Both are Wake Forest-based subsidiaries of Westwood, Kansas-based Sprint Corp.) And Stamford, Conn.-based GTE has 7%.

North Carolina joins 26 states - including California, New York, Michigan, Florida and Tennessee - that have opened or approved opening local service to competition. What's prompting the change? Among other things, the drive to deregulate just about everything, from airlines to banking.

In fact, the states' rush to write their own laws is in part an effort to beat a mandate from the federal government. Both houses in Congress have passed a comprehensive telecommunications bill that promises to transform the entire industry, affecting cable, telephone and broadcasting services.

In North Carolina, local phone companies have come out in support of competition, which is slated to begin in July. In a sense, it is a matter of self-preservation. "The question was not will [competition] come but when and under what conditions," says Clifton Metcalf, a spokesman for BellSouth. "It makes business sense to be involved in the dialogue."

Under the North Carolina...