The potential merger between cellular giants AT&T, Inc. and T-Mobile USA has competitors frantically lobbying the federal government to kill the proposal. TM

The $39 billion deal is pending approval from the Federal Communications Commission. It will also be investigated by the U.S. Department of Justice.

The addition of T-Mobile’s 46 million customers would make AT&T the largest wireless carrier in the United States, leapfrogging the company ahead of Verizon Communications, Inc. The deal would allow Deutsche Telekom AG, which owns T-Mobile, to exit the cellular market in the U.S. Deutsche Telekom operates primarily in Europe.

Concerns have been raised among consumer groups that the deal could result in less competition and raise prices. Sprint Nextel Corp. CEO Dan Hesse has also publicly criticized the deal. Despite the protests, the deal will likely be approved, albeit with conditions, said Matteo Arena, an assistant professor of finance.

The merger would give AT&T and Verizon unprecedented power over the U.S. cellular industry, said Michael Waxman, a professor of law.

“Together AT&T and Verizon would have so much power that they wouldn’t even have to agree to any (mutual business decisions) – they could just play follow the leader and ignore other competitors,” Waxman said.

Waxman said the deal could also benefit Verizon because it would leave one less competitor in T-Mobile. He also pointed out that T-Mobile customers would not necessarily switch to AT&T.

“They’re not T-Mobile customers anymore,” Waxman said. “They’re just out there in the marketplace, so they could just as easily go to Verizon.”

The deal would also likely benefit Apple, Inc., as its iPhone, currently available on AT&T and Verizon, would become even more widespread. Google, Inc.’s popular Android operating system could lose some ground.

Some analysts say the FCC’s decision could have political implications as well due to AT&T’s role as a political contributor. But AT&T’s donations have been largely balanced between Republicans and Democrats, said John McAdams, an associate professor of political science.

Currently, the FCC leans Democratic. But that could work both ways in this decision, McAdams said.

“Democrats are more likely to be tough on business, but the Democrats on the FCC have a kind of missionary zeal about bringing broadband to everyone,” McAdams said. “The AT&T strategy is going to be to promise to build a very extensive 4G network and build broadband.”

Regardless, the deal represents a significant bet for AT&T, which would have to pay T-Mobile $3 billion and turn over valuable wireless spectrum space if the merger fails.

“It’s a gamble, but these are big boys,” Waxman said. “They know what they’re playing with.”