Pac Bell Launches Over-the-Phone News Service : Technology: The joint effort with Dow Jones & Co. makes it the first of the regional firms to use its existing lines to test the market for such information.

Pacific Bell has begun offering a call-in headline news service in Southern California, becoming the first of the regional Bell telephone companies to test what many experts believe could be a huge market for information services delivered over conventional phone lines.

The new service--a joint effort of Pacific Bell and Dow Jones & Co., publisher of The Wall Street Journal--pairs two of the most aggressive players in the emerging market for electronic voice information.

The new Pacific Bell service, called Daily Reporter, offers a prepackaged assortment of international, financial and sports news updates. It is an admittedly rudimentary version of what many analysts believe could eventually become a serious rival to traditional news sources such as television and newspapers--and an early favorite to dominate what is expected to become a $30-billion-a-year industry within three years.

“This is just the first step toward ‘information on demand,’ the service that will really worry newspaper publishers and television news producers,” said Berge Ayvazian, a vice president at the Yankee Group, a technology research firm in Boston.

Pacific Bell’s move follows a federal judge’s decision last October to allow the seven Baby Bells that were spun off in the court-ordered divestiture of American Telephone & Telegraph Co. to directly offer information services over the phone wires. Previously, the Bell companies had been prevented from doing so.

While other Baby Bell companies, notably Atlanta-based BellSouth Corp., have teamed with news media companies to offer traffic and stock market information programs to cellular phone customers, Pacific Bell is the first to legally do it over its existing grid of phone wires.

An assortment of business and consumer interests are opposing the expected push by phone companies into information services. The House Judiciary Committee is scheduled to vote Thursday on a bill that would reimpose some of those restrictions. However, President Bush has threatened to veto the bill.

AT&T;, the American Newspaper Publishers Assn. and the Consumer Federation of America are trying to block the Baby Bells from offering information services by phone, fearing that they will use their monopoly control over the phone lines to dominate the market.

“We like to see consumers getting information, but we have grave concerns about allowing the companies that control the wires--all monopolies--to also control the information that goes out over then,” said Gene Kimmelman, legislative director for the Consumer Federation of America. “We fear the Bell companies will dominate the market and then pick and choose the information that consumers ultimately get.”

Although the early version of the Pacific Bell service offers a pre-selected assortment of three types of news bits, company officials said they will soon expand the range of offerings to include restaurant and movie reviews and weather reports and allow customers to choose for themselves what news they want to receive.

For example, in later versions of the service, customers could get news on a specific handful of stocks and sports teams, track weather in certain cities and monitor activities of particular corporations.

“Pacific Bell is the most aggressive in providing information in this context,” said Steven Sieck, a vice president at Link Resources, a New York research firm. “Not many of the other Baby Bell companies have gotten around to thinking about this yet.”

Ayvazian also noted that Dow Jones has shown an ability to focus on the money-making potential that the Baby Bell’s entry into information services offers, rather than the competitive threat they pose.

“Getting into bed with the Bell companies can have its trade-offs,” he said, “and it’s probably easier for a media company that isn’t directly threatened in a single geographic region to do this.”

James LaFollette, manager of the Daily Reporter at Pacific Bell, said Dow Jones is providing the basic information, culling it from its team of hundreds of reporters throughout the world. Pacific Bell, in turn, will deliver the information packets to each customer’s voice-mail box, customizing the selections when that service becomes available.

“The Daily Reporter gives our customers one more way to stay informed, even when they are too busy to pick up a newspaper or catch broadcast news,” LaFollette said.

To subscribe to the news service, which will cost from 75 cents to $2 a month depending on the amount of news requested, customers must first purchase Pacific Bell’s $5.95-a-month voice-mail service, called Message Center. Each of the three reports is up to three minutes long and is delivered automatically to the subscriber’s Message Center voice-mail box before 6 a.m., seven days a week.

The service is initially available only to residents of Los Angeles and Orange counties and parts of Riverside, San Bernardino and Ventura counties.