Telecommunications showdown in Southern California.

"The cat in gloves catches no mice," Ben Franklin once said while commenting about the implications of conflict. And nowhere is conflict more ominous than in the telecommunications industry. A variety of telecommunications companies -- and a host of "wannabe" telecommunications companies -- are setting their sights on one of the most lucrative markets in the nation -- Southern California. And these competitors certainly will not be wearing gloves.

"It's not a totally new ball game," said Mike Crawford, the new regional president for GTE California. "But there are some new players and the rules are changing."

The major contenders are GTE, Pacific Bell, AT&T, MCI and Sprint, but not far behind are the CAPS (Competitive Access Providers) who are intent on skimming the major business customers of the local phone companies by by-passing the local telephone network and connecting customers directly to their networks, or "co-located" networks. (Co-location enables providers to connect their facilities directly to those of a local exchange carrier.) Since these battles are being fought in the large urban areas, Los Angeles is a prime market for this competition.

Regulation is being lifted at an increasing rate. Most recently, the U.S. Appeals Court in Washington D.C. ruled that telephone companies do not have to pay franchise fees to provide video services. GTE and every Bell operating company have plans to make their networks video-capable.

This does not mean that the telcos will be forsaking dialtone. On the contrary, the fiercest battle may be over Plain Old Telephone Service (POTS). The new regulation that is imminent in California will open up the local long distance market, $3 billion a year, to the long distance companies. This means callers will have the opportunity to shift the primary revenue source for local telephone companies, the same way they now have with long distance providers. A five-digit access code along with the phone number will be necessary at the outset to use the long distance companies, but as time goes on, balloting will most likely eliminate those extra digits.

As in all deregulated environments, this will mean packages, offerings and other marketing ventures to maintain or sway customers.

The local telephone providers will be looking for regulatory conditions that allow them the means to compete fairly. Federal law demands Universal Service be provided to all citizens. Telephone service has been kept affordable by a subsidization of local service by long distance and business rates. In order to compete with the long distance companies, local providers will need to price local service closer to the actual cost of that service. This will result in a cut in local toll calls by at least 40%. High usage local toll callers, like most businesses, will benefit immediately from this new rate structure.

With the advent of further deregulation for telephone service, there will be an onslaught of choices. And with the choices, will be the reasons to choose one provider over another.

GTE's differentiator for its business customers is the World Class Network. It is GTE's pledge that its network has the capacity to bring affordable telecommunications solutions to its customers -- on time. These solutions include voice, video and data products that will carry more information at a faster rate. Information is the payload for business, and its transport will be the market share that will be vied for.

GTE plans to build a video network that will pass 7 million homes nationwide. In California, 83,000 of these homes will be in Ventura County.

"GTE is entering the video services business," said Crawford. "We plan to provide our customers in Ventura County with an array of video services, all accessible via their TV sets.

"TV viewers are evolving from being passive watchers to interactive media participants," he said. "They will expect such services as on-demand TV and movies, games, education, home banking and shopping, travel, investment and video phone services."

These are not the words of a telephone executive five years ago. They reflect an industry that is going through critical change. POTS is going to be part of an overall enhanced telecommunications package available via the Information Superhighway. The melding of the wireline and wireless telephone networks, along with the computer and television will result in an interactive world that will touch on people's lives from renewing licenses to ordering Chinese.

This is an evolution of technologies, but it's bringing revolutionary changes. "It is clear the marketplace for new technologies is changing the services GTE provides," said Crawford. "Multimedia voice, video and data applications -- for both wireline and wireless services -- are the future of GTE and represent significant new revenue opportunities."

In Cerritos, GTE tested Superhighway functions before they were classified as such. Services such as GTE Main Street (home shopping, financial, informational and other interactive services), Center Screen (an expanded pay-per-view movie channel), interactive advertising, distance learning, the video microscope, the video phone call, and movies on demand were all part of a five-year technology trial. Main Street -- now a commercially premium -- is targeting 10 million subscribers in the top 20 television markets within the next six years.

California has a wealth of resources driving the information highway: the technologies of the Silicon Valley, Hollywood's multiple role as movie/cable/television content provider, and a Pacific Rim proximity that puts this region in pace-setting position.

The Information Superhighway has its naysayers, but if you ask the recent distant learning graduates at Cal State Dominguez Hills who took their upper division classes at Coastline Community College avoiding a 40-mile commute, chances are they'd say the interactive highway they'd taken is much more enjoyable than the Southern California freeways they avoided.

Health care will enjoy significant changes from new network and switching capabilities. Asynchronous Transfer Mode (ATM) switches that are part of GTE's World Class Network, will allow medical experts in separate hospitals to concurrently view x-rays and conference in real-time regarding a patient's condition. Nowhere is information more vital than in the medical world. And at no time in the history of telecommunications has technology been more suited for medical applications.

GTE, like telecommunications providers across the nation, has been readying for the challenge of competition. The regulatory entities at the local and national level are establishing the ground rules, and alliances are being forged to bring customers a host of new applications.

The changes in telecommunications will result in a far greater array of customer-driven services, and a melding of industries and technologies.

The gloves are off.

Mike Murray is Administrator of Communications for GTE California