RESPONDING TO COMMUNICATIONS BILL\Passage prompts PacTel to diversify; other firms wait.

Byline: Dawn Yoshitake Daily News Staff Writer

The bill overhauling the telecommunications industry brought a quick response from some area companies, while others are taking a slower approach to the sweeping changes.

Pacific Telesis Group, parent of Pacific Bell, announced Thursday the formation of a long distance carrier subsidiary. Pacific Bell expects to step into the market in the next 12 to 18 months after President Clinton signs the bill, said Michael Runzler, public policy director for Pacific Telesis.

"We're shooting to do this for the entire state simultaneously. No one region will be first or last," he said.

Pacific Telesis is looking at forming strategic partnerships with existing long distance carriers to get into the $70 billion long distance market. In exchange, it would help partners move into the $100 billion local telephone business.

After months of delays and haggling, Congress passed a major telecommunications bill Thursday that allows cable and telephone companies to jump into each other's businesses and gives media companies greater freedom to increase their market share.

Local company executives are pointing to the consumer as the winner, but note that it may take time to detect the changes.

"The ultimate winner will be the consumer, with the increased competition," said David Auger, general manager of Cablevision Industries in Chatsworth.

Some observers predicted rapid changes in big cities.

"Los Angeles, as in any large market, is one that will reap the rewards the quickest," said Matt Flanigan, president of the Telecommunications Industry Association in Virginia. "These telephone and cable companies will go after the smallest areas with the largest number of people first. I only hope it also spreads out to the rural markets."

GTE is weighing what action it will take in the heavily populated Los Angeles market. The local telephone company may go beyond building a network and carrying a signal for cable services - allowed under current law - to also offering programming, which is provided under the bill.

"Once the legislative restraints are gone, we'll have to evaluate the marketplace and build on our base" said Larry Cox, GTE spokesman in California.

GTE is also evaluating whether to enter the long distance market, he said.

Meanwhile, cable companies like United Artists Cable and Cablevision are reviewing their options.

"We're in the process of rebuilding our system to increase channel capacity and reliability with a network of fiber optics cables. This will allow us to offer alternative services," said Auger of Cablevision. "Some of those services could be telephone or enhanced video services."

He said no decisions have been made on whether the cable system will offer telephone service in the Valley.

Kurt Taylor, general manager of United Artists, said rate deregulation will result in lower prices for consumers.

"Competition will control prices," he said.

But what about competition from telephone companies coming into his market?

"We worked hard to establish ourselves in this community and these are things that give us a competitive edge if they try to come here," Taylor said. ?Box: Gauging the Effect on Consumers

Here are some of the ways the public will be most directly affected by the communications bill passed Thursday by the House and Senate.

The New York Times

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