RealTime IT News

AT&T, BellSouth Back at the Table

For the second time this year, long-distance provider AT&T is talking merger with regional telecom BellSouth , according to the Wall Street Journal.

Executives from the two companies met this week to discuss the possible combination, two months after initial negotiations broke down, the newspaper reported.

"As a matter of policy, AT&T doesn't comment on rumor and speculation about mergers, divestitures, or other possible business combinations," AT&T spokeswoman Sue Fleming told internetnews.com.

A BellSouth spokesman was not immediately available to comment.

Speculation about a merger has been in the air for years. Bedminster, N.J.-based AT&T has seen the Baby Bells and cable companies eat into its long distance business and it faces increased competition with MCI, once that company emerges from bankruptcy protection next year.

Earlier this week, AT&T posted its 15th consecutive quarter of declining revenue. Its consumer business was hit especially hard in the third quarter.

In contrast, BellSouth beat expectations in its third quarter, thanks to strong long distance and DSL growth.

Unlike its fellow Baby Bells -- Verizon, SBC and Qwest -- Atlanta-based BellSouth has resisted multi-company buying sprees in recent years. That leaves it with the capital needed to pull off such a deal.

If talks do succeed this time, the merged company would likely retain the AT&T name, the newspaper said. But there would be a host of regulatory hurdles to clear first as consumer advocated and government agencies would have to scrutinize the impact on competition.