This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

"I'm like Ma Bell, I got the ill communication." -- Beastie Boys

When considering these two particular companies, it is important to note their roots as offspring of the famous "Ma Bell" network. The Bell System, which has produced the most complex ongoing series of mergers and break-ups in the history of the United States, is the origin of the companies that are now AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ), as well as competitor Qwest Communications International (NYSE: Q). A lot has changed since those early times -- remember, after all, that the second "T" in AT&T stood for Telegraph. Now phones are the latest devices to be made supercomputers. AT&T has its exclusive deal with the Apple Inc. (NASDAQ: AAPL) iPhone, while Verizon slings the Research in Motion Ltd. (NASDAQ: RIMM) BlackBerry.

Since wireless is the way of the future, the wireless divisions of these companies is the most hotly contested, and the focus of this "Battle of the Brands." It is important to note that despite Verizon Wireless bearing solely Verizon's name, it is not owned by just them, it is a 55%-45% joint venture between Verizon and Vodafone Group (NYSE: VOD). It is also important to note that AT&T Mobility is the service formerly known as Cingular, which was acquired by AT&T in 2006 when it bought BellSouth for $86B.

"Investors have shied away from the big telcos in recent years because of concerns that their traditional businesses were shrinking," notes George Putnam III, an expert in uncovering turnarounds.

But now, he explains, "After years of concern about the cable companies invading their turf, the big telecoms are now well positioned to fight back."

In his The Turnaround Letter, the advisor looks at seven leaders in the global telecom space, all of which he says represent global leaders, with dominant positions in their local markets and the "potential to grow steadily by expanding the services they offer."

AT&T (NYSE: T) Putnam notes, gained control of Cingular Wireless due to its merger with Bellsouth. The renamed AT&T Wireless, he says, will account for about 35% of AT&T's revenues.

The advisor observes, "In addition to a strong wireless presence, AT&T is rolling out fiber-based landline services. With revenues expected to be north of $120 billion in 2007 and substantial operating cash flow, AT&T is a force to be reckoned with." Further, he notes, the dividend was just raised for the 22nd consecutive year, and the company is expected to repurchase roughly $7 billion worth of stock in 2007.

AT&T Inc.'s (NYSE:T) share price gained $1.27 to close yesterday at $36.63, and rose even further after hours, spurred by Cingular's strong earnings report yesterday, its last as an independent entity. Today's AT&T quarterly and year-end report offered more good news for investors, once again clearly based on the strength AT&T's wireless business.

With merger-related costs excluded, Wall Street had looked for 59 cents earnings per share, and AT&T reported that it would have been 61 cents, compared to 63 cents last quarter. AT&T also reported $24 billion in revenue without the merger, compared to consensus estimates of $21.3 billion. With BellSouth in the mix, it was a profit of $1.9 million, or 50 cents a share, compared to $1.7 million and 46 cents a year ago.

Like some analysts I mentioned in my earnings preview earlier this week, BloggingStocks readers were clearly optimistic (and apparently rightly so), as 73% of you polled predicted AT&T would beat expectations. Less than a quarter of you felt it would merely meet expectations.

AT&T also said it expects to see higher savings from the BellSouth merger than originally forecast, and that the newly acquired business would contribute modestly to income growth in 2007.

AT&T's stock started the day near $38.

Also check out some other earnings reports that we're following, and let us know your thoughts on earnings expectations.

With some analysts souring on tech stocks, the question for investors and watchers of AT&T Inc. (NYSE:T) ahead of its Q4 report on January 25 is whether this telecom chameleon (formerly SBC, formerly Southwestern Bell and others, formerly AT&T) can repeat its strong Q3 results. That showing was based primarily on the strength of AT&T's wireless business. And it's still wireless that provides hope in some quarters, specifically AT&T's piece of the brouhaha over Apple Inc. (NASDAQ:AAPL)'s iPhone. Cingular (soon to be known once more as AT&T Wireless) will be the exclusive service provider for iPhones, which is bound to bring in boatloads of new customers for AT&T.

Some wonder whether giants AT&T and Apple can really get along, however. And the other big AT&T news in these days leading to the Q4 report is its new Unity service, a bundling of mobile and land-line services that is widely seen as an effort to stem the tide of customers going over to the cable providers.

AT&T rates a "buy" recommendation, according the Thomson Financial, with estimated earnings per share at 0.59, compared to 0.63 actual for the previous quarter, and revenue of 21.3 billion. The target price is 37.48 (it closed at 35.07 on Friday). MarketWatch and TheStreet.com agree on the 0.59 estimate, but place the target price at 38.50, with a fiscal 2007 estimate of 2.27 and an "overweight" rating.

Credit Suisse analysts recently raised their target price to $39 and fiscal 2007 earnings estimate to $2.54, as well as maintaining their rating of "outperform," based not only on the iPhone deal, but the completion of the merger with BellSouth as well.

What do you think? Are investors in line for another positive surprise from AT&T?

Also check out some other earnings reports that we're following, and let us know your thoughts on earnings expectations.

The S&P 500 has announced several changes to the index. Ensco International (NYSE:ESV) is replacing BellSouth (NYSE:BLS). Cimarex (NYSE:XEC) will join the S&P Midcap 400. Hornbeck Offshore Services (NYSE:HOS) will join the Small Cap 600.

As the stocks are added to major indices, many index funds will be forced to buy them to stay current with the indices they track. Other "closet index funds" may add them as well. Should you?

If history is any guide, probably not. According to a piece in last week's Wall Street Journal [subscription required]: "... buy stocks that have been removed from the S&P 500. Those that suffered that indignity this year are up 27% on average since removal, while those that were added to the index are up only 1% since joining, notes Paul Hickey of Birinyi Associates."

While there were no stocks demoted in this group (BellSouth is no longer listed as it was acquired by AT&T.), the data would seem to suggest that investors may do well to avoid ESV and possibly HOS and XEC too.

'Tis the season. While AT&T Inc.(NYSE:T) got its massive merger with BellSouth cleared by the FCC, it had to promise "net neutrality" for a time. In other words, it cannot charge websites that are bandwidth hogs because of their large numbers of users and the nature of their content more than some plain vanilla website in Akron.

The net neutrality provision is good for two years. What happens then is anyone guess.

But what might have happened? AT&T may well have tried to get tens of millions of dollars from big websites with rich content. High on the list would be Microsoft's (NASDAQ:MSFT) MSN, Time Warner's NYSE:TWX) AOL, Yahoo! Inc.'s(NASDAQ:YHOO) and Google Inc. (NASDAQ:GOOG). News Corp's (NYSE:NWS) MySpace would also have potentially faced tolls for its use of AT&T Internet pipes as a conduit to consumers.

With its operating profit running about $200 million a quarter, the decision by AT&T to pass on charging big websites for traffic could actually save Yahoo! some real cake. With current Wall Street estimates of $.13 for the next quarter and the same for Q1 07, could the waiver of charging fees be worth a penny a quarter? Maybe.

If so, Yahoo! got a gift. And, if it helps the market's perceptions of its future cost base, that might be worth a little on the old stock price.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Every couple years, there seems to be yet another New AT&T.

And, according to a cover story in Barron's [this is a paid online service], it looks like the latest reconstruction is something for investors to stay away from.

At the end of the year, AT&T did get approval for its mega acquisition of BellSouth. Of course, the company will have tremendous scale -- with local phone service, wireless, and so on.

And, yes, the merger should mean significant cost cutting, which should mean some growth in profitability.

But the big problem persists: Where will the growth come from?

If anything, there's a good chance for a loss of market share because of the onslaught from the cable companies, as well as Net upstarts like eBay's Skype and Vonage.

Another risk factor: AT&T's move into video.

History is not encouraging when big telcos move into new industries. Besides, AT&T's roll-out of its video service will cost a fortune. Then again, the company might consider buying a digital satellite company, such as Echostar.

Besides, the shares of AT&T have been particularly strong in 2006. In other words, a few disappointments could knock down the stock price in 2007.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates DealProfiles.com.

It seems like a lifetime ago that the old Ma Bell phone monopoly was broken up by the government back in 1984, but approval today by the Justice Department puts modern day parts of that company, AT&T Inc. (NYSE: T) and BellSouth Corp (NYSE: BLS), one step closer to reuniting.

After examining the impact of AT&T gaining control of Cingular Wireless, the Justice Department's antitrust division concluded that the merger would not have a material impact on competition in the industry. Should the deal make it through the Federal Communications Commission, AT&T will end up with roughly 57.3 million cellular customers.

A ruling is scheduled tomorrow from the FCC, but from the looks of things an approval should be in the making. The Justice Department announced that while reaching their decision they coordinated with the FCC in the investigation. There are some rumors that the FCC is under political pressure that could cause a delay in tomorrow's decision, but barring that possibility, we should know the fate of this merger within a day.