By George Avalos, Contra Costa Times, Walnut Creek, Calif. Knight-Ridder/Tribune Business News

Apr. 19--State officials intend to unleash competition starting in 1996 for California's tightly controlled local telephone industry under a regulatory map unveiled Tuesday by the Public Utilities Commission.

The PUC plan would enable rivals of Pacific Bell to offer a variety of local phone services, effective Jan. 1. These include a basic connection from a customer's home or business to the telephone network, and directory assistance.

Starting in June, would-be competitors of Pacific Bell would be able to seek PUC permission to offer local phone service.

``Competition in the provision of local-exchange telecommunications services is in the public interest,'' the PUC said in its plan. The commission circulated the interim rules in advance of its vote next Wednesday on the draft plan.

The PUC wants to create competition for local telephone service in the hope consumers will benefit from new communications technologies and a greater choice of telephone providers. Amid dazzling and fast-moving changes in telecommunications, the PUC wants to let market forces be the principal means to create new services.

Eventually, the plan states, customers should be able to retain their phone numbers even if they switch from one telephone carrier to another, provided they don't move to a new city.

``That is a key consumer benefit, to be able to own your own telephone number,'' said Stephen Bowen, spokesman for the California Telecommunications Coalition, a group that includes potential Pac Bell competitors.

The PUC called on Pacific Bell, other monopoly phone providers and potential competitors to develop a full-scale trial of number portability as a way to develop the technology for the feature.

Under the plan, Pacific Bell rivals would be able to purchase certain services from Pac Bell, such as a local phone loop that connects a home or business to the telephone network. A competitor would then resell those basic services to customers they wish to capture.

Pacific Bell's competitors generally supported the PUC proposal. ``It's an important first step,'' Bowen said.

But Pac Bell criticized the plan. The proposal will let competitors ``give price breaks to big business customers while leaving most residential and small business customers holding the bag,'' Pac Bell said.

That could happen, Pac Bell warned, because the PUC plan does not address the issue of how to provide and pay for affordable basic service for all customers, often referred to as universal service. Pac Bell said its rivals must be required to help finance universal service. Otherwise, the rivals will concentrate on attracting lucrative major accounts and may ignore small customers.

The PUC said it would address universal service later. END!A3?CC-LOCAL-PHONE

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