Editor's Note: This column first appeared in The Tech Edge , a proprietary newsletter, on Tuesday, June 3. For more information on The Tech Edge , click here . Talk America's ( TALK) stock performance has spoken volumes to investors, but some say that happy script is about to change. The Reston, Va., phone service reseller has surged back from the brink of obscurity this year, and its shares have more than doubled. Owing largely to a change of business strategy, a generous pricing mandate from the feds and Wall Street's embrace of any speculative tech play that promises growth, Talk America told a convincing story. However, observers fear that at its core this is a company where success or failure depends on the shifting whims of regulatory decree. And worse, after watching thousands of customers jump ship for cheaper calling plans, the Baby Bells have launched their own all-you-can-eat offers that promise to slow, if not reverse, Talk America's progress. The pricing rules in question are the much-debated unbundled network elements platform, or UNE-P, a purportedly pro-competitive policy that forces local phone giants to rent their networks to rivals at steep discounts. On Feb. 20, the day Talk America started its recent rise, the Federal Communications Commission handed down a preliminary ruling giving jurisdiction on the pricing matters over to the states, stipulating a three-year phase out. As readers may recall, the decision was seen as a huge blow to the Bells, which had been losing hundreds of thousands of customers per quarter to outfits like MCI, AT&T ( T) and Talk America. The FCC's final version of the order is due out in the coming weeks and is expected to spell out slightly more favorable terms for the Bells. But the Bells haven't exactly been sitting on their hands. Both Verizon ( VZ) and SBC ( SBC) (SBC:NYSE), the nation's two largest phone companies, have introduced flat-rate unlimited calling plans for local and long-distance service. Though it is very early in the process, the Bells have already managed to slow the pace of their customers' flight. In the first quarter of 2003, SBC lost 770,000 local lines, compared with 810,000 in the previous quarter. And similarly, Verizon lost 386,000 lines in the first quarter, far fewer than the 470,000 in the previous period. That trend reversal suggests that the days of Talk America's unfettered growth are numbered, say observers.