AT&T has spent months trying to convince the U.S. government to allow their $39 billion takeover of T-Mobile to go ahead. Along the way, the Telecom giants have argued the necessity of the merger, saying that the demands put upon the companies exceed the available wireless bandwidth allotted to them. However, the merger had several critics who said that merging the two companies would stifle competition. Today, AT&T announced that it was ceasing its bid for T-Mobile.

As you may know, AT&T has had its sights set on T-Mobile for a while now, and the two had agreed that AT&T would be allowed to gobble up T-Mobile for a scant $39 billion. If you had your money on the merger getting blocked for antitrust violations, you were right. Today, the U.S. Government sued to block the merger on grounds that it would "substantially lessen competition," at which point AT&T's stock took a 5% hit. If the merger should happen to go through after all, we will see the birth of the largest mobile service provider in the United States.

Due to cancelation language written into the merger agreement, AT&T has some significant incentives to fight these antitrust allegations. If the deal fails to go through, AT&T owes T-Mobile a check for $3 billion and reduced charges for dialing into AT&Ts network as part of a package that's worth somewhere around $7 billion.