Santa Barbara businessman Don Oas bubbles with enthusiasm when he talks about phone service. The self-proclaimed phone fanatic sees plenty of blue skies ahead with the launch of his new company called Blue Casa Communications LLC, the first to offer local home phone service to compete with Verizon in Santa Barbara County.

Until this month, county residents had only one choice for local home phone service -- Verizon, previously called GTE.

California telecommunications law changes, which went into effect in March, now allow other firms to compete with the incumbent phone companies and use the existing networks. This allows Blue Casa to offer local and long-distance service using Verizon's network.

"The consumer market is underserved and we think it offers the most room for improvement," said Mr. Oas, who spent 15 years with GTE, where he was most recently the head of consumer products. "Until now, people in the county have had only one choice. That was a monopoly."

"For the most part (the county) is just an afterthought for the national phone companies. We rank No. 257 on their list," he added.

By making Santa Barbara County and its 200,000 local telephone accounts the priority, Mr. Oas said Blue Casa can offer better service and rates than its corporate competitor. Blue Casa monthly rates start at $19.99 for unlimited local calls only, and go up to $41.99 per month for unlimited local plus 300 minutes of long distance.

Three of the company's four packages offer calling features that rival those of Verizon. Blue Casa also said it has a simplified international call plan that charges the same rate for a particular area regardless of what time or day the call is made.

Mr. Oas estimated that customers could expect to save between $200 and $300 a year with a Blue Casa plan versus a similar Verizon plan.

While Blue Casa's concept for bundled local and long-distance service may be new in Santa Barbara County, he said similar companies emerged on the East Coast two years ago.

One out of four home telephone customers on the East Coast have moved away from the incumbent phone company to smaller new players, he said. Among the notable firms providing local service are Florida-based Z-Tel and MCI, which provides local service in the Pac Bell territory.

"In California it hasn't yet taken hold," Mr. Oas said. "The incumbent phone companies did a very effective job of advocating against competition."

In addition to Verizon, Pac Bell is the other incumbent in California.

"The regulation (in California) is just 60 days old," said Mr. Oas. "But I think we'll see the same thing that happened on the East Coast, with people making the switch."

Blue Casa is the first firm to offer local phone service to compete with Verizon, but another firm in Santa Barbara has been battling the incumbents for at least six years in the business phone segment.

TMC Communications, headed by John Marsch, has been offering long-distance phone service to businesses in Santa Barbara County since 1983. The company also provides its service nationwide to 15,000 business consumers, with 300 of them in the county. Later this month, TMC Communications will launch local phone service for businesses in the county, Mr. Marsch said.

He also plans to offer local home service by the end of the year, but unlike Blue Casa, TMC will use a network not owned by Verizon.

The competition could heat up quick with other companies jumping into the local residential phone market, but Blue Casa may be one step ahead with its focus on reaching both the English-speaking and Spanish-speaking market.

"We're doing 100 percent bilingual marketing," Mr. Oas said. "There's a tremendous amount of work to be done, but if you're a business in California and in Santa Barbara County, where four out of 10 people are of Latino background, then you need to be bilingual, otherwise you're not being a good marketer."

Blue Casa's strategy clicked immediately with investors, Mr. Oas said. All except one of the investors in the company are from the local area, he added. Mr. Oas first came to Santa Barbara in 2000 to work for Software.com. He was working in Hong Kong running Software.com's Asia region when he read about the upcoming changes to the California telecommunications laws.

"I thought that it was time to come back and to start this company," he said.

He returned to Santa Barbara last December to hammer out a business plan for Blue Casa and to find investors to fund the venture. Starting in February, he was able to raise all the money he needed by May, he said.

"I'm proud of getting financing in a space as beleaguered as telecom," said Mr. Oas, who declined to disclose how much money he raised. "But we're fully funded now."

Calls to a Verizon representative on Thursday were not returned.