PUC to Unveil Phone Deregulation Plans : Telecom: Regulators will try to establish ground rules for the entry of new players in the California market.

Opening local telephone markets to competition might sound good to consumers, but what if it means that you can’t keep your phone number? Or that you can’t get your number listed in a phone book?

A year has passed since the California Public Utilities Commission proposed allowing unbridled competition in the state’s telephone markets by 1997. Yet basic issues such as number portability and phone book listings have yet to be decided.

Today, the PUC is expected to unveil the first details of how deregulation of the state’s phone industry should be accomplished. The commissioners will try to establish ground rules for the entry of new rivals--cable and long-distance companies, for example--into local telecommunications markets, traditionally the province of monopolies such as Pacific Bell and General Telephone of California.

The commissioners will also suggest a timetable for dealing with issues such as how to redefine basic telephone service, how to continue to fund service for low-income and elderly customers and how to ensure that phone-company competitors have the interconnections they will need to make their offerings attractive.

At best, many industry observers noted Tuesday, companies and consumers face a rocky, confusing transition. But the payoff could be enormous--and California lags far behind other states in modernizing its local-telephone rules.

“We think that the course the PUC charts over the next two years is really going to determine the future of telecommunications for Californians,” said Regina Costa, telecommunications analyst with Toward Utility Rate Normalization, a consumer watchdog group in San Francisco.

“They can create a situation where people really do have a lot of choices and better services, or they can create a situation where people will be subjected to the worst kind of abuse and be forced to pay for services they don’t really want.”

A chief goal of deregulation, the PUC said last December, is to spur private-sector development of new telecommunications services, with the presumption that innovative products will stimulate demand and create thousands of jobs.

In theory, customers would benefit not only from those services, but also from price competition. (Similarly, after Jan. 1, consumers will be able to choose among various service providers on local toll calls, a market recently opened to competition after having been a local-phone-company monopoly.)

The PUC’s proposal last year drew a mostly enthusiastic response from local telephone companies, long-distance providers, cable operators and consumer watchdogs. But many observers noted at the time that the five-person agency would have to take on the role of determined traffic cop and gatekeeper to ensure that service providers stay in line.

Since then, concerns have mounted among would-be rivals and consumer groups that the PUC might not take a firm enough stance in forcing the existing local phone monopolies to hew to a schedule and be fair to competitors.

Commissioner Norman D. Shumway has proposed that, on some key issues such as pricing and number portability, Pacific Bell and GTE should spearhead an effort to involve all interested parties in a settlement. That suits Pacific Bell just fine. “Why not put us all in a room and let us negotiate?” said John A. Gueldner, the company’s vice president of regulatory affairs. “We feel a settlement approach would get it done even sooner (than 1997).”