DATE: Wednesday, November 5, 1997           TAG: 9711051187

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL  

SOURCE: BY LON WAGNER, STAFF WRITER 

                                            LENGTH:   61 lines

CORRECTION/CLARIFICATION: ***************************************************************** LCI International will offer local phone service to small Hampton Roads businesses. A headline in Wednesday's Business News contained an error. Correction published Thursday, November 6, 1997, page D2. ***************************************************************** LCI TO ENTER THE REGION'S LONG-DISTANCE MARKETPLACE

LCI International, the country's sixth-largest long-distance provider, will begin competing with Bell Atlantic Corp. by selling local phone service to small Hampton Roads businesses, the company announced Tuesday.

McLean, Va.-based LCI said it will target businesses with two to 20 phone lines in the southeastern Virginia area, the 31st market in which it is offering local phone service.

LCI can offer the service because it concluded a resale agreement with Bell Atlantic, an arrangement provided for in the Telecommunications Act of 1996. LCI is not offering local phone service in GTE Corp.'s territory because it has not yet reached a resale agreement with that company, LCI spokeswoman Robin Buckley said.

Buckley described reselling Bell Atlantic's local phone service as ``low margin.'' Basically, LCI gets a 20 percent discount off of Bell Atlantic's basic rate, then sells it under its Simply Direct local service brand at a 10 percent discount.

``You have to learn how to do it then you can go in and offer it to residential customers,'' she said.

The company plans to resell local residential phone service sometime in 1998, but is not sure which markets it will enter first, she said.

LCI will offer local service to small businesses throughout Bell Atlantic's Hampton Roads territory: from Williamsburg and Cape Charles southward to Portsmouth and Suffolk.

Bell Atlantic was generally pleased with LCI's announcement. It will help the Maine-to-Virginia Baby Bell provide evidence that its local service market is competitive when it applies to federal regulators to offer long-distance service, spokesman Paul Miller said.

``We envy them in that they can provide long-distance and we can't,'' Miller said.

LCI will offer local service separately or package it with long-distance service, the company said.

It is not the first company to challenge Bell Atlantic's stranglehold on the local phone market. Earlier this year, Cox Communications began offering local service to businesses through its Cox Fibernet subsidiary. A major difference is that Cox is not a reseller, but built its own network and switch.

Cox's early offerings in the local phone market also have been largely to business customers.

Bell Atlantic's Miller said he was not surprised that early local service competitors would go after business customers.

``Our competitors for the most part are not interested in going after the residential customer,'' Miller said. ``They can make more money in going after the business customer.''

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