In a surprising turn of events, the mega merger that consumer watchdogs decried, but most deemed a fait accompli, faces a real risk of disintegrating at the hands of federal regulators. Last last night, a new poll of policy analysts examining the proposed $39 billion merger between AT&T and T-Mobile found that the deal was now more likely to fail than pass FCC and Justice Department approval, according to an average taken from the respondents. The poll comes as AT&T faces a string of setbacks and bad press. It was as recent as March when Bruce Gottlieb, general counsel of The Atlantic and former chief counsel of the FCC, said it was a "safer bet that the government will approve a proposed transaction than block it." Here's how the deal's fallen on hard times:

The accidental leak

On Thursday, AT&T accidentally leaked confidential information undermining one of the strongest arguments supporters of AT&T have made in support of the merger. The disclosure revealed that AT&T pondered a $3.8 billion deal to expand its new super fast LTE network to rural areas of the country before its announced acquisition of T-Mobile, reported Maisie Ramsay at Wireless Week. As she notes, "Politicians, consumer groups and top corporations in the tech industry who support the deal have all cited the company’s plan for extra LTE coverage as one of the main reasons the FCC and Justice Department should allow the massive merger to go through."

The details of the deal were supposed to be redacted before being uploaded to the FCC's website. Before the details were taken down, Wireless Week jotted them down. The disclosure shows that AT&T did have the option to expand into rural areas without the T-Mobile merger–perhaps not on the terms AT&T desired but still in the realm of possibility. An AT&T spokeswoman, however, rejected the idea in an interview with Wireless Week. “The confidential information in the latest letter is fully consistent with AT&T’s prior filings.  It demonstrates the significance of our commitment to build out 4G LTE mobile broadband to 97 percent of the population following our merger with T-Mobile.  Without this merger, AT&T could not make this expanded commitment.  This merger will unleash billions of dollars in badly needed investment, creating many thousands of well-paying jobs that are vitally needed given our weakened economy.” 

Consumer Watchdog

As one of the louder public-interest groups entering the ring, Consumer Watchdog made a strong push for federal regulators to reject the merger in a letter on Wednesday. “T-Mobile customers who are forced to migrate to AT&T’s network will have to buy new phones, agree to more expensive rate plans or cancel their contracts and pay a termination fee,” the group said in a letter sent to the FCC. “Once known for its low prices, T-Mobile has already begun increasing its rates and decreasing options in anticipation of the merger… Nothing in the terms of the proposed merger bars AT&T from engaging in a repeat performance against helpless T-Mobile customers if this deal is approved."

A loss of confidence within AT&T?

In a sign that the company is scrambling to get regulators on board, AT&T has hired Bank of America to help it divest and sell off its assets, reports The Wall Street Journal. "The U.S. telecommunications giant hired Bank of America Merrill Lynch to line up buyers of customers and wireless spectrum. The assets sales could be worth $8 billion or more, the people said, based on internal analyses of the customer markets that might have to be shed to gain regulatory approval."

The poll

Last night, Bloomberg reported on the aforementioned poll through a note by Rebecca Arbogast and David Kaut of Stifel Nicolaus & Co. The poll surveyed 32 analysts, reports the news service. "The observers rated their expectation for approval on a scale of 0-to-100 percent, and the average of their answers fell to 49.5 percent in August from 54.7 percent in July, the analysts said. Eight of those who think approval is unlikely deepened their conviction, and six of those who expect approval expressed less certainty. Arbogast and Kaut didn’t identify who was polled, calling them a council of 'wise men and women.'"

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