While it is shrinking, AT&T's consumer long-distance unit does generate a lot of cash.
AT&T added that its core consumer long-distance unit would shrink faster than expected.
The company hopes to generate steady cash from the long-distance unit, and analysts say that may prove fruitful.
Shares of Sprint FON, Sprint's main long-distance unit, rose 56 cents, or 4.79percentto to $12.26 on the news.
If the shrinking consumer long-distance unit were made separate, the remainder of the company would show faster growth.
I received a more elaborate explanation from Gary Morgenstern, a spokesman for AT&T's long-distance unit.
One reason AT&T may want to issue a new stock to track the long-distance unit is that its shares have languished recently.
But what has also begun to shrivel in recent years is the overall revenue of AT&T's consumer long-distance unit.
Still, an 8.4percentt jump in wireless sales cushioned the effect of a 12th consecutive revenue decline at the long-distance unit.
The consumer long-distance unit, for instance, could explore partnerships with outside companies that provide high-speed Internet access over normal telephone lines.
If the department simply asks WorldCom to sell off Sprint's consumer long-distance unit, the response will probably be clear: no problem.
