BLS and SBC have learned that one should not do business as wcom and Q have done. And it is good to have examples of failure, to keep on track. Ed at SBC may not be the most well liked guy in the world, but he knows this business. Verizon has gone through many changes in the past years, and now is one of the best contenders. Did you know that a verizon tech was killed at the Pentagon on 9/11? This jobs calls for more that just dial tone. BLS has been so restructured that is can go nowhere but up. This is a tough team of telecoms to beat.
I believe you're correct in predicting the "big 3". I'm not sure it will happen quite as fast as you think (by the end of the year) but I am confident SBC, VZ and BLS will be the only ones left when the dust settles. I've heard this prediction a number of times now. This will drive the stock of these companies up. All 3 are a good buy right now.