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AT&T last week advanced its plan to enter the local phone business on a mass scale by asking for permission to serve customers in Michigan and Illinois.

If regulators approve the request, the No. 1 long-distance carrier could, within seven months, be selling both local and long-distance service to customers in the home territory of Chicago-based Baby Bell Ameritech.

Ameritech is welcoming AT&T to its market as part of its "Customers First" test proposed in 1992; in exchange for letting outsiders into its market, Ameritech expects to gain permission to offer long-distance nationally.

State and federal regulators are weighing changes in national telecommunications policy, and the Telecommunications Competition & Deregulation Act is before Congress. But competition has already begun in certain markets.

Ameritech and AT&T are already gearing up for mass-market competition, evident in recent ad efforts. Ameritech last month launched a new corporate TV campaign to raise awareness of its brand and differentiating its brand from AT&T. Fallon McElligott, Minneapolis, is Ameritech's corporate agency of record. AT&T has heightened its local advertising nationwide, promoting the use of its calling cards for short-haul long-distance calls. FCB/Leber Katz Partners, New York, handles.

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