When AT&T (NYS: T) saw FCC commissioner Julius Genachowski unsheathing a rarely used weapon against unwanted radio-wave mergers, Ma Bell backed off to regroup.

AT&T and Deutsche Telekom have dropped their FCC application to transfer radio-spectrum licenses, but the companies plan to refile that crucial application when the time is right. In the meantime, the battle goes on to convince the DoJ, Sprint Nextel (NYS: S) , and other deal critics that AT&T-Mobile is a good idea, and not at all a job-destroying, anticompetitive Faustian deal.

For the first time, AT&T admits that the merger might indeed fail: The telecom giant is taking a $4 billion charge in the current quarter to account for payment of the potential breakup fee. This is new.

Management would dearly love to keep that $4 billion in the bank, of course. Expect the reworked FCC application to show significant differences from the first version.

AT&T might sell some overlapping spectrum licenses to MetroPCS (NYS: PCS) , Sprint, or a patchwork of regional networks such as Cincinnati Bell (NYS: CBB) . That's a good start. In fact, it might cure the bulk of the FCC's objections, given the agency's radio-centric jurisdiction. If the telecoms simply wanted to avoid the torpedo that sank a blockbuster combination of DirecTV (NAS: DTV) and EchoStar (NAS: SATS) a decade ago, I guess it's mission accomplished.

But job losses should be a far bigger sticking point, and that one has little to do with the FCC. Bringing call centers back to the U.S. while chopping higher-paid heads in engineering, field installations, and other departments doesn't sound like high-quality job creation. In this economic climate with rampant unemployment, I wouldn't be surprised to see the White House stepping in with a veto if all the other checks and balances fail. And I don't know how AT&T would work around this huge issue without losing the biggest cost-control benefits of merging in the first place.

This action notwithstanding, I agree with AT&T's suddenly cautious accountants: Dead deal walking.

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At the time this article was published Fool contributor Anders Bylund holds no position in any of the companies mentioned. We Fools don't all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.

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