New rivals slavering to dial into Southland phone service market.

With one of their crucial monopoly powers stripped away by federal regulators this month, local phone company officials in Los Angeles are girding for new competition that may trigger a further decline in interstate calling rates.

They said, however, it is still too early to estimate how far rates might drop.

The Federal Communications Commission approved a plan on Sept. 17 to end local phone companies' exclusive control over the link between their operations and long-distance companies. Competing communications companies now plan to lay their own fiber optic cables between these two points, and they have vowed a price war in linking local callers to long-distance lines. The beneficiaries will be long-distance companies and their business customers, to whom they may pass on some of the savings.

Local phone company Pacific Bell, for instance, has been the only operator authorized to provide the crucial link to long-distance companies like AT&T and Sprint or AT&T for about two-thirds of L.A. County. The remaining one-third was controlled by GTE California. Both firms, like all other local phone companies across the nation, are bound by the historic ruling.

"This is clearly a landmark decision," said David Sieradzki, an FCC staff attorney overseeing the deregulation. "It was one of the last parts of the telephone system that remained predominantly a monopoly."

Sieradzki said local phone companies now "will have to become more efficient, introduce new technology sooner and be more responsive to customers."

Indeed, both PacBell and GTE officials said they will now ask the FCC to let them charge less. That's because they expect their new rivals will try to undercut them, asking the FCC for even lower rates, said PacBell Director of Public Policy Pat Lanthier.

GTE spokeswoman Barbara Walker declined to estimate a percentage drop before the FCC approves rates for all parties, expected no sooner than early 1993.

Over time, PacBell and GTE will open the doors of their central offices, and the sophisticated telecommunications switching equipment inside, to a bolder bevy of rival phone companies, noted PacBell Director of Regional Planning and Policy Steven Harris.

That makes Rick Kozak "elated."

"Next week we'll begin holding intense discussions with PacBell" on how to tap into its network, asserted rival operator Kozak, president of development for MFS Communications Co., Oakbrook Terrace, Ill. "Before, we were only working behind the scenes, but now we're able to go ahead, full-scale."

Kozak, whose company had joined other Bell competitors to lobby the FCC since 1989, said "this finally gives the customer buying leverage."

MFS and other rivals last year were granted similar access for long-distance calls within state boundaries in New York, the only state to so deregulate. New York Telephone Co. has since defended its turf by lowering rates, said Dee May, director of federal regulatory issues for its parent company, NYNEX. But she declined to say how deeply the rates were lowered, calling it proprietary information.

The Sept. 17 deregulation is similar to the landmark 1978 federal court order that deregulated long-distance service, previously monopolized by AT&T. That action let in upstart competitors like Sprint and MCI Telecommunications Corp., which have since grown into multibillion-dollar corporations.

Competition has since forced AT&T to trim its rates 40 percent, on average, for direct-dialed long-distance calls since 1984. The most dramatic declines have benefited businesses: Coast-to-coast daytime calls have declined 54 percent.

Today, linking callers to those long-distance companies is a $25 billion-$30 billion a year industry. But the rates are "artificially inflated," admitted PacBell's Harris, because they help PacBell subsidize basic, local service for residences. He said PacBell will work hard to convince the FCC to make up for the subsidy fairly. Otherwise the deregulation amounts to unfair cherrypicking by MFS and other rivals, like Teleport Communications Group of Houston, called "competitive access providers" in the trade because they sell discounted air time, or "access," to local phone companies.

Beneficiaries are mostly mid- and small-sized businesses. They so far can't afford a "private-line" circuit directly to long-distance carriers that has for years been economical for businesses with high-volume calling. (These private circuits were allowed under a separate, previous deregulation.)

MFS-owned Metropolitan Fiber Systems of Los Angeles, for example, began operating in 1989 a network of fiber-optic cable in downtown Los Angeles. Today it connects to 40 office buildings with roughly 150 businesses, providing them with private-line access. Metropolitan currently is laying a second, 60-mile fiber loop to serve offices in West L.A., the San Fernando Valley and Glendale areas.