Parents often say they'll do anything for their kids. Even so, you can see where Ma Bell would be feeling torn today.

Thursday brought a fitting telecom milestone, as AT&T ( T) -- the giant whose 1984 breakup spawned the competitive telecommunications industry -- dropped out of the bellwether Dow Jones Industrial Average after 65 years. Replacing the New Jersey long-distance giant is its biggest offspring: the current top U.S. telco, Verizon ( VZ).

Verizon's ascension to the nation's most closely watched stock index highlights the ongong shift in the struggling telecom industry. While sales of plain vanilla local and long-distance services continue to tumble, the wireless industry is hotter than ever, reeling in millions of new customers and posting impressive revenue growth.

Tellingly, even after a series of botched face-lifts, AT&T remains stuck in the sinking long-distance and business services markets. Meanwhile, Verizon is the majority holder in the most successful stateside wireless telco, Verizon Wireless.

"It makes perfect sense," says Blaylock & Partners analyst Rick Black, who has a neutral rating on Verizon and whose firm has done banking for the big New York telco. "The businesses Verizon is in, is what telecom is all about."

With money managers gaming the changes, shares of Verizon rose 79 cents, or 2%, to $37.33, while AT&T fell 31 cents, or 2%, to $19.26.

Sibling Rivalry

Verizon becomes the second regional Bell phone company in the 107-year-old DJIA, joining 1999 addition SBC Communications ( SBC). Like Verizon, SBC has bulked up via acquisitions of its erstwhile Baby Bell siblings. Also similarly, SBC has pushed for an increasing presence in the fast-growing wireless and broadband businesses: Its Cingular cell-phone joint venture with BellSouth ( BLS) is the No. 2 wireless player, and its digital subscriber line venture with Net titan Yahoo! ( YHOO) has been a heavily promoted success.

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