"Goodbye Yellow Pages -- Hello ADS-1001," heralds a new brochure, significantly yellow-covered, now making the rounds of Washington businesses.

ADS-1001 is the brainchild of Arthur E. Morrissette, president and founder of Interstate Van Lines, whose intention is to take on the Bell System's multibillion-dollar Yellow Pages and offer the first serious competition it's ever had.

He's using the Bell System's own phones and a computer to do it.

If he has his way, Morrissette will break the public of "letting their fingers do the walking"--except to the phone. There, they can dial ADS-1001 to get the information they need just as fast or faster, Morrissette says, than wading through what he describes as the "gang of confusion" in the Yellow Pages.

ADS stands for Automated Directory Services and the "1001" stands for the 1001 questions you can ask, Morrissette says. Already, 82,000 Washington-area businesses have been entered into the computer in categories that are similar to those in the Yellow Pages, and calls are being taken from the public.

From the consumer's point of view, this is how ADS-1001 works: A Washingtonian, Marylander or Virginian seeking a plumber, or whatever, dials ADS-1001, night or day. The caller asks for a plumber and, in turn, is asked for the first three digits of his or her telephone number. Within a minute or two, the name and telephone number of a plumber is given. If it is possible, it's a plumber with the same telephone exchange. If there is no plumber within the same exchange, a plumber in a contiguous telephone exchange is offered.

There is no charge to the consumer. Revenues for ADS-1001 will come from Washington area businesses who become subscribers, the same way the Yellow Pages gets its advertising revenue, Morrissette explained in an interview.

The cost of signing up is $2.50 a year per listing per exchange; a listing in each of the metropolitan area's 429 telephone exchanges costs $1,000. A business has innumerable options, ranging from a single listing in one classification in one exchange to multiple listings in many categories in every exchange. For instance, a plumber could be listed under plumbers and also under hot water heaters, in every exchange in the District, some in Maryland and none in Virginia, or any other combinations.

"We can offer as much exposure as a business wants, or as little--just like a newspaper, where you can take a three-line ad in classified or buy an entire two-page centerfold," Morrissette said. "You can subscribe to 429 telephone exchanges, or choose those in Virginia, Maryland or in D.C.; you can buy as little or as much as you want."

According to Morrissette, there are about 10,000 phones in each telephone exchange. A company can buy listings in all 158 exchanges in the District, the 155 exchanges in suburban Maryland, or the 116 in suburban Virginia, or all of them, or it can buy listings in selected areas, such as the dozen exchanges in Kensington or the five in Landover. A business wanting to target customers in a single area could buy positions--turns at the wheel--in just one or a few exchanges.

Because there may be many plumbers in a given exchange, ADS's system for giving out numbers to the public uses a rotary, or ferris wheel, principle. Think of a ferris wheel with a different plumber in each place. The first caller for a plumber would be given the number for ABC plumbers, the second caller would get DEF plumbers, the third caller GHI plumbers, and so on around the wheel. If a business wants to get more "turns," he can pay for extra listings--at the same $2.50 per exchange.

The names and numbers of the 82,000 area businesses already entered into the computer came from a mailing list Morrissette purchased. Each business gets a free listing with ADS, limited to the exchange in which it's located, until contacted by one of Morrissette's sales force. Once contacted, a business will be removed from ADS if it doesn't want to become a subscriber. Although Morrissette admits that it will take a long time to contact 82,000 businesses, he thinks they won't wait to be contacted. "I anticipate that businessmen will be calling us when we get better known," he said.

A long-time critic of the Yellow Pages, Morrissette contends his new service affords businesses a less expensive and more efficient option to advertising in the Yellow Pages. His pamphlet lists what he contends are disadvantages of the Yellow Pages: high monthly charges, pressure to be listed in each of the area's Yellow Pages--the District's, Maryland Suburban and Northern Virginia--and requests to buy larger and larger ads in more and more categories. There is also the possibility that a mistaken address, phone number or other pertinent information will appear in printed form, and remain unchanged for a year, Morrissette noted.

In contrast, he tells prospective subscribers, information on the ADS computer can be updated or altered at any time. In addition, he'll be able to give a subscriber a print-out to show just how many times his number was given out to callers. "In the Yellow Pages, a businessman doesn't know what he gets for his investment," Morrissette said. "Some spend as much as $50,000, $60,000, even $100,000 a year in that book and they don't really know what they're getting for it."

A spokesman for the Chesapeake and Potomac Telephone Co. said the company has no comment on Morrissette's new service but prefers to "accentuate the positive" on their own. The C&P spokesman noted that more than 3 million phone books are delivered to every home and business in the area each year free of charge to recipients, and consumers can look through them at any time and comparison shop since businesses are listed by specialty, location and brand name.

Although each business gets a free white page and yellow page listing as part of its monthly telephone service, he said, a display ad is very effective and can be paid for by the business in its monthly phone bill.

A small display ad, a quarter-column, costs $74 a month in the DC Yellow directory, $77 a month in Northern Virginia, and $94 a month in Maryland. The prices are based on a market value index, he said, with differences having to do with the number of copies delivered in the different jursidictions and where they're delivered.

A quarter-page ad would cost $296 a month in the District, $308 a month in the Virginia book, and $376 a month in Maryland's. A half-page ad costs $740 a month in the District, $770 a month in Virginia and $940 a month in Maryland. Full page ads cost more, as does the use of red ink.

So far, Morrissette is fighting the Yellow Pages, which he estimates is worth $55 million a year in revenues in this area and $10 billion nationwide. He has a workforce of just 22, eight of them answering the phones. But he envisions, eventually, a staff of 500.

Morrissette estimates that it will take as much as $2 million to promote his new business, which is separate from Interstate. So far, he has no other investors.

"As soon as I set it up in Washington, I will move to other cities," he promises.