But since then the company hasn't lost many regulatory fights, as it has reassembled itself through a series of big-dollar acquisitions led by its swaggering CEO Ed Whitacre (who went on to become CEO of General Motors during its bankruptcy and government bailout).
This track record of success has given AT&T's D.C. office an aura of invulnerability that informed many initial reactions to this deal. AT&T even got a host of Silicon Valley companies -- the natural opponents to consolidation in the market for mobile access to the Internet -- to write a letter supporting the merger.
So perhaps the most important takeaway from today's announcement is that there is still some sand in the federal government's telecom competition policy. This is news because many if not most of the biggest fights in telecom policy over the past decade have been, in one way or another, about competition policy. And in virtually every case, the losing side has been the one seeking more government intervention to promote (the other side would say to artificially prop up) competition.
Reasonable minds can disagree on who had the better half of the competition wars. But until today's decision it was getting pretty hard to imagine any competition policy that was ever going to get traction in Washington. Indeed, in this ex-regulator's humble opinion, competition policy ranks as one of the two most bungled areas of U.S. technology policy in the past two decades (the other is Internet privacy). In any event, it is revealing that today's decision came from the DOJ and not the Federal Communications Commission, which shares jurisdiction over the merger.
The DOJ is an executive branch agency with a relatively strong tradition of non-interference by political leadership, especially in matters like antitrust and criminal justice. The FCC, by contrast, is in theory a bi-partisan, independent agency. In practice this means it is buffeted by a far greater variety of political winds -- including both parties in both branches of Congress, the huge companies it regulates -- and without the kind of protection that comes from being a formal part of the Presidential administration. So what happens next?
The main show will likely be the district court case. It seems likely that the FCC will simply hold its proceeding in abeyance pending the outcome of the judicial proceeding. There is still a chance, however, that the FCC would take the formal step of designating the merger for a hearing -- the first step towards blocking it at the FCC as well -- which would be another blow to AT&Ts chances.
Expect a lot of action in the press and political realm about whether killing the merger is good or bad for American jobs, consumer prices, and the pace of innovation and economic growth. But these political arguments are likely to matter a lot less now that the field of battle is the federal courts.