By Richard A. Oppel Jr., The Dallas Morning News Knight-Ridder/Tribune Business News

AUSTIN, Texas--Mar. 17--Fearing that new phone laws will be written in favor of a competitor, AT&T on Friday will launch a million-dollar television ad campaign accusing Southwestern Bell of being a power-grabbing monopoly trying to rip off Texas.

The commercials - attack ads that convey a tone much like a combative political campaign - will run for 10 days in every major Texas TV market.

Officials say the ad was made collectively by a group of companies - including AT&T - that are battling Bell over how legislators will rewrite the state's phone company laws this year.

But privately, those knowledgeable about the ads say AT&T is the driving force behind the campaign because it has become the company most upset about the direction the legislation is heading.

It's ``designed to encourage Bell to reach an amicable resolution'' to the legislative fight, said one person familiar with the ad campaign. Said another: AT&T ``is just unsatisfied with the legislation. They figure this is a way to engage the public in what has been a very inside-baseball debate.''

The new state laws will govern how Texas changes from a monopoly system - where Bell and GTE provide nearly all the state's local phone service - to one in which people can choose from competing phone companies.

Those who want to offer local phone service, including AT&T and cable television operators, are fighting Bell over how much help the laws will give to new local phone companies and how quickly Bell can fight back. Seeking to encourage as many competitors as possible, newspaper publishers, including The Dallas Morning News, have sided with the long-distance and cable companies.

During the past two weeks, it has become clear AT&T is the company most unhappy with the way the legislation is being shaped. Meanwhile, newspapers say they still have problems with the proposed legislation, but they say none of the remaining obstacles appear insurmountable.

Cable executives are ``a ways from being satisfied,'' according to one cable official, but they have been far less outspoken in their criticism.

AT&T, meanwhile, believes there are ``enormous problems'' with the proposed legislation that ``ignore economic reality,'' said company lobbyist Vaughn Aldredge. ``We need to let folks know what the issues at stake are.''

A bill was filed last week by Rep. Curt Seidlits, D-Sherman. AT&T says its biggest objection is that it would be forced to spend billions of dollars laying phone lines before it could get into the local phone business across Texas.

AT&T's decision to run the ads - a move it had been mulling for at least a week - comes one day after a second meeting between House Speaker Pete Laney, Lt. Gov. Bob Bullock, Gov. George W. Bush and executives from AT&T,

Bell and the The News.

After the first meeting March 6, participants from all sides said they had made some progress. But AT&T decided this week that talks weren't going anywhere, so they ``went nuclear,'' in the words of one person knowledgeable about the company's decision.

The state's leadership had no comment Thursday about AT&T's action. However, as reports circulated through the capital this week that the ads were being prepared, some lawmakers had said they hoped AT&T would decide against running them.

A Bell spokesman said the company thought progress was still being made in negotiations. But Thursday, he criticized AT&T's action and said ``all they want is to take our network and our equipment and have the people of Texas send money to them instead of to us.''

Burl Osborne, editor and publisher of The News, said, ``I really regret that it's come to this.'' He said the publishers did not contribute any money for the advertisements, which cost more than $1 million.

The ad attempts in 60 seconds to cast Bell as a sinister company trying to run roughshod over Texas consumers and lawmakers.

At one point, the ad says Bell ``didn't deliver'' on a promise five years ago to spend money to give Texas 21st-century telecommunications technology. The promise was part of a deal Bell struck with state regulators in return for higher profits.

According to the staff of the Public Utility Commission, Bell has ``complied with the specific infrastructure investments required'' by that deal.

However, state regulators also say Bell ``continues to lag significantly behind'' other Baby Bells in the deployment of some technology and, as a result, ``Texas risks falling behind other states.'' END!C&3?DA-ATT

AP-NY-03-16-95 2258EST

This material is copyrighted and may not be republished without permission of the originating newspaper or wire service. NewsHound is a service of the San Jose Mercury News. For more information call 1-800-818-NEWS.