Selling off assets to smaller companies would give AT&T a somewhat better chance of winning DOJ approval of the T-Mobile merger, "but the [merger] is still unlikely," said Maurice Stucke, associate professor at the University of Tennessee College of Law and a former DOJ attorney.
He said AT&T faces a tough challenge in court, since the DOJ must only show the merger is anticompetitive in just one of the 100 largest U.S. wireless markets.
"DOJ has a good case under the original merger deal," Stucke said, adding that section 7 of the Clayton Act only requires that the DOJ prove that a combination will "substantially lessen competition."
Despite the odds against the deal, Stucke noted that the DOJ still "can't underestimate AT&T. There's a certain feeling that what's good for AT&T is what's good for America."
Perhaps AT&T will return to lobbying Congress or the White House to urge DOJ to settle, Stucke speculated.
Even if AT&T does sell off spectrum and other assets to smaller carriers and ultimately wins approval, "it will take a while" -- much longer than AT&T and Deutsche Telekom expected, added Chris Lemley, a professor of marketing at Georgia State University who has researched the wireless market in the U.S.
"People can't forget that neither Deutsche Telekom nor AT&T are stupid," Lemley said. "They both have smart leadership, and you know they have both looked at strategies and different options for a long time. If the merger does fall through, both companies will still try to get what each wanted out of this in other ways."
In the event the merger falls apart, Deutsche Telekom would get the $4 billion break-up payment, which could be used to improve the T-Mobile network and make the division more marketable to "any number of foreign competitors" including carriers in Asia and Orange in Europe, Lemley said.
Jeff Kagan, an independent telecom analyst, said that if the merger fails, as it currently appears, T-Mobile could ideally be sold to Sprint, which would combine the nation's fourth and third carriers to become a credible competitor behind top carriers AT&T and Verizon Wireless.
As for AT&T potentially losing $4 billion in a break-up fee, Kagan added: "AT&T will still be strong. That is no more than a stubbed toe to the phone giant."
Sign up for CIO Asia eNewsletters.