McLeodUSA Inc., a fast-growing, Cedar Rapids, Iowa-based telecommunications company, is taking steps to join the handful of companies competing here for local phone-service customers.


McLeodUSA, which provides local and long-distance telephone service to business and residential customers in 11 states, hopes to offer both business and residential local service in the Spokane-Coeur dAlene area starting early next year, company spokesman Bruce Tiemann says.


While the company expects initially to be reselling dial-tone service through an agreement with US West Inc., it plans by the middle of next year to spend millions of dollars to install the equipment here necessary to launch such service through its own system, possibly a fiber-optic network. McLeodUSA officials decline to disclose the size of that planned investment, but Tiemann says switch sites typically cost between $2 million and $12 million to install.


Also by mid-2000, the company expects to employ about 30 people here.


After that, it depends on the marketplace, Tiemann says. Its likely that wed add more salespeople and support staff as time goes on.


McLeodUSA already operates has a sales office in downtown Spokane and a presence in the long-distance market here. About three months ago, it acquired Salt Lake City-based Access Communications Inc., which did business as Access Long Distance and had established the sales office here before the acquisition. The local office, which is located in the U.S. Bank Building, at 422 W. Riverside, employs between 10 and 15 peoples.


Spokane is among the first cities in Washington to be targeted by McLeodUSA, and the company still needs to obtain regulatory approval from the states Utilities and Transportation Commission before it can offer local telephone service here. It filed its application with the state last week, says commission spokeswoman Marilyn Meehan. The approval process typically takes 30 days, Tiemann says.


In Idaho, the company received regulatory approval to offer local telephone service in parts of the state two years ago, but that approval doesnt include the area of Idaho that GTE serves, which includes Coeur dAlene and the rest of Kootenai County. However, Wayne Hart, a telecommunications analyst for the Idaho Public Utilities Commission, says McLeodUSAs approval could be amended rather easily to include the GTE area.


Switching station


In addition to its downtown office space, McLeodUSA has leased about 24,000 square feet of space in a building at 627 E. Sprague that formerly housed a U.S. Bancorp data-processing center and student-loan center. The company plans to establish its Spokane switch site there, which basically will be composed of electronic equipment necessary to provide local telephone service independent of US West.


Bruce Miller, vice president of WAM Enterprises Inc., says McLeodUSA has signed a long-term lease, and extensive tenant improvements to the space will start soon. WAM Enterprises owns the 70,000-square-foot building, which is completely leased now. Miller and Jeff McGougan, of Tomlinson Black Commercial Inc., along with CB Richard Ellis Chicago office, handled the lease.


Entry into the Spokane market is part of McLeodUSAs rapid expansion plan in both the long-distance and local-service markets. Earlier this year, it had announced plans to gain a foothold in five statesIdaho, Montana, Utah, Kansas, and Nebraska. With its acquisition of Access Communications, it bought a market share in Oregon, Arizona, New Mexico, and Washington state.


In addition to offering telephone services, McLeodUSA publishes telephone directories. This year, the company estimates it will distribute about 21 million telephone directories in 22 states.


Tiemann says the company usually publishes phone books in the areas where it provides local service, but he doesnt know what its plans are concerning publishing directories for the Spokane-Coeur dAlene area.