For the second time in a year, the voracious appetite of AT&T ( T) has put telco rival Verizon ( VZ) on the hotseat. AT&T's $67 billion agreement to buy BellSouth ( BLS) led to a rally in some smaller telecom players Monday, as Wall Street speculated that the combination would once more force Verizon to play catch-up on the acquisition trail. Purported targets Qwest ( Q) and Alltel ( AT) each rose 4%. BellSouth rose 11%, while AT&T dropped 2% and Verizon slipped 1%, as investors chewed over the terms and the prospect of regulatory scrutiny. The all-stock deal's price tag was "steeper than we would have anticipated," Banc of America analysts said Monday. The companies said in a Monday morning conference call that they don't anticipate any problems on the regulatory front. The BellSouth deal gives AT&T full control of the nation's biggest cellphone service provider, Cingular Wireless. The companies aim to close the merger early next year. The agreement comes just four months after AT&T's creation in a $16 billion merger of San Antonio's SBC and New Jersey's AT&T. That merger, unveiled last Jan. 31, bolstered AT&T's business-services side and came just two weeks before Verizon rolled out a me-too merger with MCI. On the call, AT&T execs said they wanted to take advantage of what they called the convergence of wireless and wireline networks, as well as other trends in the communications business. Looking at the rising profile of businesses like Internet phone and Internet video, "We decided the sooner the better," AT&T chief Ed Whitacre said. He said the deal will "accelerate the industry's technological evolution." The move comes as both AT&T and Verizon, as well as Sprint ( S), are trying to move away from the shrinking wireline phone business and increase their exposure to the steadily growing wireless industry. But the big telcos increasingly find themselves competing with deep-pocketed cable operators like Comcast ( CMCSA) and Time Warner ( TWX) to offer consumers the so-called triple threat of telephone, television and Internet service. As a result, all the competitors are spending more time pushing their so-called bundles -- that is to say, two or more services sold to a given household -- to consumers.