LET LONG-DISTANCE SERVICES OFER LOCAL COMPETITION

Congress is rewriting the laws that govern the nation's telephone industry. The new law will bring big changes affecting everybody in America. The changes could be good, or bad, depending on what Congress does.

If Congress opens up local telephone markets to competition -- ending local monopolies and giving consumers a choice among competing providers of local telephone service -- everyone will benefit. But if Congress allows local telephone companies to enter already competitive markets, such as long distance, with their monopoly power intact, consumers will lose out.

In long-distance telephone markets, an explosion of competition has occurred in the 11 years since the court-ordered divestiture of the old Bell System in 1984. Where a single company once controlled the market, more than 500 long-distance companies now compete in that market every day. Everyone has benefited from this competition. Consumers' long-distance rates have dropped almost 70 percent in real dollars since 1984. Also, long-distance companies have become better businesses as a result of this fierce, but fair, competition, providing more and better services.

In local telephone markets, the opposite is true. Competition is missing from these markets, which are controlled by Bell companies. Consumers still have no real choice when it comes to local telephone service, where rates have gone up. They are stuck with one local phone company, usually, the Bell monopoly.

Consumers aren't the only ones without options. Since the local telephone companies control the first and last mile of every call, long-distance companies must pay them charges for access to the telephones in your homes and businesses. These access charges total about 45 cents of every long-distance dollar. So about 45 percent of your long-distance bill really goes to the local telephone company. These access charges have become a $22 billion-a-year subsidy for the regional Bell operating companies, which use much of this money to subsidize investments in unrelated businesses.

The Bell companies have asked Congress to let them into the long-distance market, but they don't want Congress to open up their monopoly local markets to real competition. That is reminiscent of the old line: "What's mine is mine, and what's yours is negotiable." Whereas a Bell company could compete in long-distance markets right away, it could be years before the Bell companies face meaningful competition in the local markets.

Until barriers to entry into local markets, ranging from state laws to technical requirements, are swept away and new competitors obtain the investment to build alternative local networks, local competition will be more of a promise than a reality. Meanwhile, the monopoly Bell companies could take advantage of their unfair market power to control prices, services and access to customers and drive any would-be competitors out of the market -- and stick consumers with a big bill in the long run.

The problem in today's telecommunications industry is the monopoly local market, not the competitive long-distance market. As Congress continues its work on the first major rewrite of communications policy in 60 years, the question that should drive congressional debate isn't whether we should have a 502nd choice for long-distance service, but whether we should have at least a second choice for local service. The long-distance companies believe you should have a right to choose among local telephone companies as you do among long-distance companies. Americans should demand that Congress let them have that right.

Howard H. Baker Jr. is a former U.S. senator who also served as President Ronald Reagan's chief of staff. He is chairman of the Competitive Long Distance Coalition consisting of the nation's long-distance companies and associations.