It is expected to spend about $12 billion on its network by 2010 to serve nearly 32 million homes (including those of BellSouth customers), according to Bernstein Research.

"We want to own the stock, but the price is too high at the moment, and the momentum story isn't here yet," said Richard Evans, an analyst with Bernstein Research.

Bernstein Research, a leading Wall Street investment research company, predicted this trend in 2003 and suggested that the practice violated no laws.

Richard Evans, an analyst with Bernstein Research, said: "Sales of this entire class of drugs are going to fall.

Cigna and United Healthcare Group each have 6.9 million, according to estimates by Bernstein Research, a Wall Street firm.

In April, Bernstein Research warned investors of probable "price discounting and promotions as carriers aggressively seek market share to maximize the contribution toward their fixed-cost base."

Richard Evans, an analyst with Bernstein Research, said that most employers would view the Medicare legislation as a heaven-sent opportunity to reduce expenses.

Richard T. Evans, an analyst with Bernstein Research, said that pharmaceuticals were "no longer a growth industry."

Brad Hintz, a bull on the bank at Bernstein Research, noted in a report last spring that the bank's likely exposure would be approximately $230 million.

Rod Bourgeois, an analyst at Bernstein Research, estimated that the contract brought E.D.S. $450 million in revenue a year.