Phone Market Talks: No Ringing Success : Utilities: After three months, negotiators fail to produce a plan to create local competition by 1997.

After three months of negotiations, a group that included representatives of telephone companies, cable firms, consumer groups and many other interested parties has failed to come up with a proposal to open local telephone markets by 1997.

The California Public Utilities Commission urged the parties in December to hash out a plan agreeable to all, setting a March 31 deadline. At the time, critics were highly skeptical that anything could be resolved through such negotiations and said the PUC was abdicating its responsibility to set rules for opening local phone markets.

The parties did issue a seven-page report to the commission Friday, but beyond listing the participants and issues discussed during about 20 meetings--and detailing the confidentiality agreements that prevented any of the participants from discussing the issues on Friday--it said almost nothing.

“Participants agree that all parties negotiated in good faith,” the report says. “The parties did not reach settlement. However, all participants acknowledge that the process has been useful and fruitful.”

Two pages of the report are devoted to a list of the participants. They include long-distance phone companies such as Sprint, AT&T; and MCI; cable companies such as Time Warner; consumer action groups such as Toward Utility Rate Normalization, and, of course, Pacific Bell, which has a monopoly on local phone service in much of California.

“The commission would have preferred to have had an industrywide consensus,” said Jose Jiminez, telecommunications adviser to PUC President Daniel Fessler. “Given that they have come up with very little, the commission is prepared to move forward.”

Most agree in principle that competition in local phone service would be good for the California economy; indeed, the state lags other large states such as New York and Illinois in overhauling its regulations.

But the various parties involved disagree strongly over the conditions under which competition should be introduced, and it was no big surprise that the negotiations came to naught. Going into the talks, Pacific Bell had been considered an obstacle to any agreement because opening up the local market to competition would mean a loss of market share and profits for it.

However, Lee Bauman, vice president of local competition for Pacific Bell, said the utility is “eager to see a plan implemented as fast as possible,” noting that the company would like to compete in long-distance services. The issue of long-distance service is largely a federal issue, however.

Jiminez said the PUC solicited plans for opening local phone competition from each of the parties. Those reports, received Jan. 31, are currently being reviewed by the commission. The PUC will hold its first public hearing on local phone competition April 26.