The board of directors at AT&T is reportedly in favor of spinning off the company's struggling consumer long-distance business to shareholders rather than selling outright what was once a core unit of the telecommunications giant.

The AT&T board, the nation's No. 1 long-distance carrier, has expressed interest in the move since it was first proposed by management during an annual retreat held in late September, the Wall Street Journal reported in today's edition, citing people familiar with the matter.

AT&T has also approached companies that might be interested in buying the long-distance business, like Verizon Communications, the newspaper reported.