Times are tough in the landline business, and when times get tough, the tough go shopping. After a few weeks of seeking a suitor, Embarq, the landline unit spun off from Sprint in 2006, has enticed CenturyTel into paying $5.8 billion in stock, and assuming $5.8 billion in debt for the nation’s fourth largest local exchange carrier.

CenturyTel is the seventh largest US local exchange carrier in United States based on 2.1 access lines in service and over 600,000 high-speed Internet connections deployed. Embarq was ranked fourth. The combined Embarq-CenturyTel would operate in 33 states and have about 8 million telephone access lines, 2 million high-speed Internet customers and about 400,000 video subscribers.

As competition with cable companies and new wireless broadband products increases, smaller, rural telcos are seeking to buy scale in order to compete. In February, the nation’s fifth largest LEC Windstream, purchased a tiny North Carolina carrier, and had been a suspected suitor for Embarq. Given the erosion of their core business and the grim credit markets, it’s likely that buyers with strong stock or a little cash could pay less of a premium on assets that give them the ability to expand without building out their own infrastrucutre. TDS Telecom and Frontier Communications are probably eying their own balance sheets and opportunities.