Southwestern Bell plans sometime next year toenter Montgomery County, Md., a wealthy area of about 350,000 northwest of Washington, that traditionally has been served by Bell Atlantic.
Final regulatory approval is expected by February, both companies said.
Bell Atlantic already faces competition in the county from MFS Telecom, but primarily in the business market.
"There [will be] two Baby Bells fighting here. One is the invader and one is protecting its home territory," said Bill Howe, Bell Atlantic VP-marketing, consumer line of business. "This is unique and it has never happened before. But we will defend our territory and defend our franchise ... vigorously."
"It is a wake-up call to the industry that a lot more of this will happen," said Brian Adamik, consumer communications director, the Yankee Group, Boston.
A Southwestern Bell spokesman said the plan is a "natural extension" of a cable property it owns in the Maryland county.
To counter Southwestern Bell's planned entry, Bell Atlantic last week unveiled a multimillion-dollar TV, radio, print, outdoor and transit campaign, touting its local service as the "gold standard" by which other providers should be judged.
TV spots, from J. Walter Thompson USA, New York, show a series of unusual but real-life statistics that conclude with Bell Atlantic's reliability data. Spots end with "Your local phone service. The one you can always count on," and are tagged, "Bell Atlantic. The heart of communication."
The campaign begins in Washington and is expected to be extended to other Bell Atlantic markets, including Philadelphia, Pittsburgh, Baltimore and Norfolk, Va.