Baby Bells to Compete: Southwestern Bell Corp. became the first Baby Bell to directly challenge another Bell over local phone service. Its target is a Bell Atlantic Corp. operation in suburban Washington. A Montgomery County cable TV system that Southwestern Bell purchased earlier this year asked the Maryland Public Service Commission for permission to offer local phone service. The commission could take months to issue a ruling. But the request signals the start of direct competition between the Baby Bells as phone and cable systems are improved for two-way voice, video and data signals.