Alltel today announced it has started the formal process of assessing the market environment for repositioning options related to its wireline business. In January, the company said it would undertake a review of strategic alternatives.

Since then, the company has started reviewing different capital structures and “early indications are encouraging,” according a prepared statement.

Among the potential alternatives for Alltel would be a spin-off of wireline assets that would create a high-dividend entity. A number of independent telcos including Iowa Telecom, Citizens and Otelco have created capital structures in which shares yield close to, or in some cases more than, 10% dividends.

Another potential avenue would be a traditional sale, though finding a buyer for Alltel’s 2 million-plus access lines would be difficult in the current environment. Few large-scale buyers have emerged, though Verizon earlier this year closed a multi-billon dollar deal to sell off its wireline assets in Hawaii The Carlyle Group.

Regardless of the path, Alltel CEO Scott Ford said at the Goldman Sachs Global Investment Research Communacopia XIV Conference today that the company would likely not put significant debt onto the wireline business.

“I think the appropriate capital structure while we try to work though the wireline transition is fairly low debt,” he said, noting that he anticipates the wireline segment’s debt to maintain investment-grade ratings.

Alltel is expected to give a further update on the wireline group’s future when it announces third-quarter earnings in late October.