Hi Lee,
I use to have GTE for my land line and internet. If I remember correctly Atlantic Bell merged with GTE and became verizon at the time. My internet is now verizon. Somehow my land line became SBC now ATT. Yes SBC a region bell became big enough to buy ATT. Lots of mergers and selling of capabilities between telecoms were going on.
The baby regional bell companies were hugh companies and I belive also had some mergers. SBC Southwestern Bell actually bought ATnT which was its original parent company. It decided to keep the name ATnT. The baby bells(7) like you said were actually very large companies. I know ATT ended up buying up Cingular wireless. Based on what I read ATT now has within it 10 out of the 22 original bell operating companies, but It seems to be more based on the success of some of the 7 Regional Bells success and growth like SBC.