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Tables turning for old-world telecom firms?

The big telephone companies have for months been unsuccessful in their attempts to persuade investors they deserve to be among the market's high-flying technology stocks.

The big telephone companies have for months been unsuccessful in their attempts to persuade investors they deserve to be among the market's high-flying technology stocks.

But as those stratospheric Internet-driven shares have come crashing to earth, the stodgier communications stocks are suddenly looking like a better bet, analysts say.

Companies from Bell Atlantic to AT&T have earned a few of their own Wall Street blemishes the last few days. But the damage has been limited, and as investors look for safer places to put their money, the telecom players with high-tech plans are a good place to start, according to many analysts.

"They were less overvalued, so there was less correction that had to be done," said Merrill Lynch Global Securities analyst Megan Kulick. "Now I think their fundamentals are going to stand out in a pretty volatile market."

Wall Street's plunge last week and the fluctuations still rippling through the technology sector are sending many investors scrambling for cover. Many of the most ambitious technology companies have lost a quarter or even half of their market value in the last week, driven by concerns about funding, federal economic policy and outright market panic.

Most of the big telecommunications providers have been caught in this downdraft, losing about 15 percent of their value in the case of SBC Communications and AT&T, or just 10 percent in the case of US West. This isn't pretty, especially for stocks long viewed as some of the most stable on the market. But that's the price of having at least one foot in the new technology economy, analysts say.

It's just this bridge that could make the companies attractive in a time of market uncertainty.

The big telephone companies have been doing their best to turn themselves into technology companies, with high-speed Internet plans, wireless company spinoffs and tracking stocks, and e-commerce initiatives. For many in the market, this has been viewed by some measures as the worst of both worlds: the bureaucracy and slow speed of an old economy giant, and the uncertainty of the digital business plan.

But now there's a flip side. The big communications players all have shown solid earnings over the last few quarters, with the billions in revenue that the new technology companies lack. Overlaying this is a new veneer of high tech, as growth increasingly comes from the companies' data and Net businesses.

"People like security stocks," said Bruce Roberts, a financial analyst with Dresdner Kleinwort Benson. "As people realize that these are new economy stocks in old economy clothing, I think they'll flock to them even more."

Several of the big telephone companies, including Sprint and BellSouth, are releasing earnings this week that are expected to continue a consistently solid trend shown over the last few quarters. That could help jolt the entire sector upwards, some analysts say.

On the fringes of the telecommunications sector are the new players, ranging from all-infrastructure companies like Qwest Communications International and Level 3 Communications to more Net-focused companies like Exodus Communications and Covad Communications.

These companies, which had seen their valuations climb much more quickly than their old-world communications counterparts over the last year, were hit much harder last week.

But some analysts think they'll climb back from the depths faster than the e-commerce and other solely Internet companies, because they have actual physical assets and reasonably solid revenue pictures.

"I think their valuations have reached lows we haven't seen for years now," said Michael Bowen, an analyst with Deutsche Bank Alex Brown. "In a shakeout like this, the good ones, like Exodus and Covad, are going to come back first. But everyone's still in wait-and-see mode."