It's one thing to have senators and public-interest crusaders fighting a proposed merger. Every deal has its detractors, after all. But when the Department of Justice files a suit to destroy the deal outright, knees start a-knocking.

That's why shares of telecom giant AT&T (NYSE: T) are down more than 5% today, after the DOJ aimed exactly that weapon against its ongoing merger with T-Mobile USA.

I'm only surprised that it took the DOJ this long to file a complaint. "A merged AT&T and T-Mobile would combine two of the four largest competitors in the marketplace, and would eliminate T-Mobile, an aggressive competitor, from the market," Deputy Attorney General James Cole said.

Moreover, AT&T is trying to gloss over the inevitable job losses that would come from such a large-scale combination of two direct competitors, by focusing on bringing back a few thousand call center jobs from overseas outsourcing operations. The fact that AT&T is trumpeting this angle far and wide shows how concerned the company itself and outside observers are about job losses.

If the deal is scuttled by this DOJ action or anything else, AT&T will give T-Mobile $3 billion in cash as well as another $3 billion in spectrum licenses and roaming agreements. That's a hefty breakup fee and the reason why Ma Bell is fighting so hard to get the deal done.

The DOJ opposition doesn't kill AT&T-Mobile dead, but it's a very strong strike against the deal. The department also opposed a merger between Nasdaq OMX (Nasdaq: NDAQ) and NYSE Euronext (NYSE: NYX), prompting the Nasdaq to withdraw its bid. On the other hand, regulators also hated the idea of VeriFone Systems (NYSE: PAY) buying competitor Hypercom, but that suit was settled and the deal has been consummated.

If this blockbuster telecom deal does happen, it will be riddled with concessions and divestitures. Comcast (Nasdaq: CMCSA) had to sell off parts of NBC Universal, and VeriFone did the same to settle its Hypercom complaints. I expect similar agreements in this case, and the merger may still not happen.

Boosted by those breakup concessions, T-Mobile might even leapfrog Sprint-Nextel (NYSE: S) and become a decent competitor all its own. AT&T shareholders would hate that outcome, but consumers would love it.

How do you feel about the government potentially killing AT&T's $39 billion deal? Let loose your elation or vitriol in the comments below.

Fool contributor Anders Bylund holds no position in any company mentioned. Click here to see his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of NYSE Euronext and AT&T. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio, follow him on Twitter or Google , or peruse our Foolish disclosure policy.