What arrival of 'Baby Bell' means to phone customers

The woman with designer sunglasses and multiple shopping bags steps between counters laden with telephones. Her perplexed look hints she's not finding what she wants in this downtown Bell Phone Center. The sales clerk approaches, flashing a confident smile. After all, when it comes to phones, this place has enough to wire a small suburb.

There are phones stashed inside pseudo-jewelry boxes ($235), molded plastic Winnie-the-Pooh phones ($149), and sleek cordless portables ($169). There's even a phone with a simulated alligator-skin faceplate ($109) for the caller who has everything.

But the woman wants to rentm a phone, and this place only sellsm them. Put simply, getting a phone isn't as easy as it used to be. She's told to go up the street to the New England Telephone Servicem Center.

Sweeping regulatory changes - embodied in Federal Communications Commission (FCC) orders that took effect Jan. 1 - are beginning to reach out and touch consumers.

These changes allowed American Telephone and Telegraph Company (AT&T) to set up an unregulated subsidiary, American Bell (affectionately known as ''Baby Bell''). This new company sells phones through 461 Bell Phone Center Stores scattered across the country, as well as through some Sears and Target stores.

What may seem especially confusing to many people is that many of the Bell Phone Center Stores and local company service centers used to all be the same thing. Baby Bell simply skimmed off a portion of those locations to start their retail business. They both even still have identical blue bell-shaped logos over their doorways.

While customers will still be able to rent phones for the forseeable future, phone manufacturers are hoping they won't want to. It will most likely become increasingly difficult to lease a phone. At the same time, heated-up competition in phone sales will probably bring prices down and add features that boggle the imagination.

In years to come, consumers will have the option of buying phones through Bell Phone Center Stores, a large number of retail stores, or catalogs, rather than rent them from the local phone company. A growing number of consumers are already buying - some 5 million last year, and an expected 10 million this year.

Industry experts, watching the changes, say telephones are becoming consumer appliances - like toaster ovens and trash compacters - that you buy and maintain yourself.

The market is an attractive one: An estimated 80 million US households have phones, many with more than one.

Next on the agenda, and adding to confusion over the changing shape of phone service, is the busting up of American Telephone & Telegraph Company (AT&T) slated to start next year. This will result in, among other things, higher local telephone service rates.

''Consumers will first of all be faced with confusion,'' says Samuel Simon, executive director of the Telecommunications Research and Action Center, a consumer-advocate group based in Washington. But out of the chaos, he adds, will emerge more choices and, in some cases, the opportunity to save money.

For example, Bell's basic beige Trimline telephone with push-buttons costs $ 71.95 at the Phone Center, while a nearby Radio Shack sells a similar phone for stores. ''But a telephone isn't just plastic and wires; it's also the service that stands behind it,'' says Randall L. Tobias, president of the consumer products division of American Bell.

The FCC rule changes that went into effect at the start of this year blocked local phone companies from adding to their stock of phones until the end of this year. This means if you move or want to add an extension phone, you'll have to hope the local company has what you want in inventory.

Delays are likely to crop up when certain styles of phones run out in one city and must be shipped in from another, ''such as if the Princess you want is in Bangor and you're in Boston,'' says AT&T spokesman Bill Mullane.

At least seven states have pushed ahead with programs to sell customers the phones they already have in their homes. Many more states are now considering the move.

About 10 percent of California's 8 million residential customers have bought their phones since the sale option was first offered there last October. Under the plan, for example, a Princess telephone with rotary dial costs $27 to buy, compared to $2.27 a month to rent. At that rate, the phone pays for itself in less than a year - a promotional point the company is quick to highlight. But the payback on other models can be considerably longer.

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