Date: 11/16/98 2:01 PM Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Attention: Jonathan G. Katz, Secretary Re: File No. S7-27-98 -- Release No. 34-40617 Purchases of Certain Equity Securities by the Issuer and Others Dear Sirs and Mesdames: I refer to your Release No. 34-40617 regarding possible amendments to Rule 10b-18 to allow issuers to purchase their shares in exempt transactions during the current black-out periods immediately following a market-wide trading suspension. We do not foresee an extensive use of this expanded authority because of the heightened levels of market drops necessary to trigger the trading relief. However, if this occurred, there would be a drastic need to restore liquidity to the market when the suspension was lifted. Since it would be impracticable to deal with the issue on an ad hoc basis, we support the Commission's consideration of a permanent approach. We believe that opening this black-out period in these very limited circumstances would be beneficial for investors, and we therefore support the proposal. It would demonstrate issuer support for its stock, which should boost investor confidence. It would also provide a good opportunity for issuers to repurchase shares at a depressed level, which it could use for issuances under benefit plans, dividend reinvestment plans, acquisitions, etc. Market manipulation is hardly an issue at such times. Furthermore, while it is not our place to comment for stock specialists and market-makers, we would like to point out that they provide substantial stability and liquidity for the market by standing ready to buy in declining markets, even if it means going very "long." In 1987, these entities incurred significant financial trouble because of their capital levels relative to their positions. Therefore, we view the proposed amendments as vehicles for relieving pressure on these buyers in the most acute of circumstances by freeing up issuers to provide a market for distressed sellers. BELLSOUTH CORPORATION By Mark E. Droege, Vice President-Financial Management and Treasurer