Local telecommunications competition: it's here.

If you work for a reasonably large corporation, it's likely your company is already buying local telephone service or some high-speed data services from a new, competitive local telephone company, rather than the historic telephone monopoly, Pacific Bell. Smaller businesses, too, are beginning to get sales calls from new local carriers seeking to serve them, especially in downtown Los Angeles, and other major metropolitan hubs.

In some areas, residents of high-rise apartment buildings also have a choice. But businesses in low density areas and most residents generally cannot yet choose their dial tone provider.

Does this mean that the much-heralded Telecommunications Act of 1996 is a failure, as some critics suggest? Not at all. Competition in local telephone service is definitely a legal, economic, and technical reality, thanks to the Act, and thanks to actions taken by federal officials and the California Public Utilities Commission both before and after the law was passed. Already, there are some 200 competitive local exchange carriers all over the country, and more than 80 in California alone. These entrepreneurial companies range in size from tiny community-based firms to national corporations. The market opportunity is great. The local telecommunications market is valued at $104 billion today, and expected to grow to $145 billion by the year 2005.

But the reality is that local exchange competition does not come in a boil-in-the-bag-for-five-minutes version. Local competition takes time to develop.

Just think what needs to be done. "New telcos," such as Los Angeles-based Teleport Communications Group (TCG) must build entire new multimillion dollar telecommunications networks with high-capacity switches (large computers) and fiber optic cables. To build these networks, they have to raise money in the capital markets. To raise enough capital, they have to show investors they are growing and spreading out, and gaining revenues.

Yet the new telcos' growth is not entirely under their own control. New local telephone companies have to be able to place their facilities in public rights-of-way without undue or unfair expense. They have to be able to run their optical fiber into customer buildings. They have to be able to attach their fiber cables to telephone poles that are owned by the very monopoly telephone companies against which they are competing.

A new telco's customer's satisfaction depends in large measure on what the "old telco" monopoly does when the customer chooses a rival. For example, the new telco has to have a way to let you keep your existing telephone number when you change carriers - this is called 'number portability.' The old telco controls how number portability works and whether it works well enough for callers to reach you without a hitch. If the monopoly doesn't respond, it amounts to anti-competitive behavior.

A new telco has to be able to get your address in the 911 emergency data base. Old telcos also control how this takes place. TCG believes that if all consumers want a choice of local dial tone providers, they have to help hold the incumbent phone company's feet to the fire. They must see to it that the incumbent honors the laws and rules which requires it to provide number portability, as well as access to numbers, telephone poles, rights-of-ways and databases.

It's simply naive to expect a 100-year old monopoly to give up customers cheerfully, just because laws and the rules says it should. As long as such a monopoly can stall encroachment into its market without penalty, it will.

You might ask, why do consumers need to act? Isn't government supposed to make sure the existing monopolies obey the law and the rules?

Yes, of course - but such enforcement is slow and expensive. Most of it starts with state regulatory agencies such as the California Public Utilities Commission, but regulatory proceedings take time and money. There are seemingly endless opportunities to reopen issues, revisit agreements, revise cost estimates.

Consumers would be well advised to consider the pace of this industry's growth in light of similar changes we all lived through in the long distance industry. It took more than ten years for AT&T, the biggest long distance service provider, to face enough competition that it could be declared a "non-dominant" carrier. In the local exchange business, it is even harder to develop real choices for consumers than it was in the long distance business. But the process is underway and will soon snowball, because once networks are in place, many customers can be served before significant additional investment is needed.

The good news is that local competition is here to stay. In those areas, such as Los Angeles, where new telcos are operating, customers are getting high quality, end-to-end services including Internet access, local dial tone and long distance service - at very favorable prices. So it is a matter of managing expectations. Great expectations can lead to great disillusionment, which can lead to great foolishness, such as declaring the telephony business a "natural monopoly." If it were a natural monopoly, companies like TCG would not have been able to raise and invest billions of dollars to build fiber optic networks in cities like ours. And consumers would not be demanding, and receiving, an alternative to the incumbent monopoly phone company.

Steve Slusser is Vice President/General Manager of Teleport Communications Group (TCG), in Los Angeles. Slusser oversees the management of TCG's fiber optic network in Los Angeles and Orange counties. TCG is the nation's first and largest provider of competitive local telecommunications services, such as local telephone service, high-speed data service and Internet access.