The Shock Heard Round The World

Verizon

has been famous for their commercials "Can you hear me now?" It looks as if AT&T

will be asking the same question after the Department of Justice has filed an antitrust complaint against the AT&T/T-Mobile merger. AT&T shares dropped as soon as the news hit the wires, and the Department of Justice will hold a press conference to discuss their findings at 11 a.m. While many expected the deal to have some complications, no one expected that a deal would ultimately not go through. We have seen a significant number of mergers go through the Obama administration, and no one really expected this time would be any different. “AT&T's elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” DOJ said in the filing. The tower stocks, such as SBA Communications Corporation

, American Tower Corporation

and Crown Castle International Corp.

are moving higher on this news. AT&T promised that it would create 5,000 new jobs in the country to help get the deal passed, but ultimately it looks as if AT&T will have to do much more to get the deal done, if it is approved at all. UPDATE: This article is updated with some comments from the Department of Justice press conference. In the conference, the DOJ said that a merger between AT&T and T-Mobile would result in tens of millions of consumers facing higher prices, fewer choices and lower quality choices for their mobile needs. The DOJ said that consumers have benefited from competition, and the lawsuit seeks to ensure that everyone can benefit from this competition going forward. The lawsuit is preserving competition among the top four carriers, which have 94% of the United States' cellular population. Preserving this is crucial. AT&T and T-Mobile compete in 97 of top 100 markets nationwide, and the Department of Justice is intent on keeping that competition for consumers. One of the last major points is that price, quality, and innovation would be diminished if the deal went through. If the deal went through, T-Mobile would be eliminated as a major competitor. This is obviously major news, and speaking to Verizon employees, analysts, and some on Wall Street, very few expected that this deal would get blocked. A Verizon employee, who asked not to be named, said, "Neither did we," when asked if he expected the deal would get blocked. J.P. Morgan

even provided financing for the merger, in expectation that it would get approval. There were some who expected it, but the timing of the blockage is shocking everyone. Many expected the review to take nine to twelve months, and the deal was blocked just a few days after the Department of Justice started the review clock. Ultimately, it may get done in a much different form, but AT&T is going to have to provide many more concessions and lean on its lobbyists even more to get the deal pushed through the DoJ. That $6 billion break-up fee is looming very large right now. AT&T is not asking "Can you hear me now?", but rather "What do we do now?"

Traders who believe that AT&T's deal with T-Mobile does not happen might want to consider the following trades:

Traders who believe that a deal ultimately gets done may consider alternate positions: