S&P: AT&T on watch

Standard & Poor's said it placed the ratings on AT&T Inc. (A/A-1) and its related entities on CreditWatch with negative implications.

S&P said this action reflects its view that there is a higher level of uncertainty about the business prospects for the local wireline businesses of investment-grade communications carriers and also prompted the negative CreditWatch placement of BellSouth Corp. (A/A-1), CenturyTel Inc. (BBB+/A-2), Telecomunicaciones de Puerto Rico Inc. (BBB+/A-2) and Cingular Wireless LLC (A) and the one-notch downgrade of the long-term ratings on Verizon Communications Inc. (A/negative) and related entities.

The agency noted AT&T has expansive plans to mitigate further line losses through introduction of competitive consumer video services through a fiber to the node architecture in selected markets for existing homes, adding AT&T's more favorable wireless business risk, derived from Cingular, partially tempers the increase in wireline risk.

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