Now that FCC Chairman Julius Genachowski has called for an administrative hearing on AT&T's proposed buyout of T-Mobile, the two parties have decided to formally withdraw their application to the Commission. The confirmation came today, with an announcement from AT&T and Deutsche Telekom, which owns T-Mobile USA. In a statement, the two companies reiterated their commitment to the deal, adding that they're looking to receive final approval from the DoJ: "This formal step today is being undertaken by both companies to consolidate their strength and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice." AT&T also reaffirmed that it would incur a $4 billion hit should the deal fall through, and that it expects to take out a pretax charge for that amount during the fourth quarter of this year. Of course, Genachowski's decision must still obtain approval from the full Commission, but it certainly looks like both parties are gearing up for a courtroom battle.

FCC chairman Julius Genachowski issued a draft order this morning that calls for a hearing to take the AT&T / T-Mobile merger before an Administrative Law Judge. Such a hearing, reminiscent of the one held for the attempted buyout of DirecTV by EchoStar in 2002, would be held once the Department of Justice's litigation is complete and would certainly be another blockade for AT&T to push through. According to the FCC, the Chairman's order is awaiting final approval from the Commission at a later date, and won't be made public until that time. If the order gets the green light and a hearing is held, it'll be done so like a trial -- one involving cross examination, witnesses, rules of evidence and a good 'ol fashioned two-sided duel.

It's no secret that the FCC has raised concerns over the proposed merger, and pushing this order forward understandably reflects that. In fact, during a conference call with media, the FCC expressed fears that the deal would violate antitrust standards and isn't in the public interest, and the Commission cited records showing it would ultimately result in a loss of jobs, contrary to AT&T's claims. Naturally, this means there's one more hoop for the carrier to go through before it can hope to pick up T-Mobile, and it's a biggie; with the FCC and DoJ holding steadfastly against the acquisition, the GSM carrier's chances of success appear to be slimming significantly. Head past the break to see AT&T and Sprint's reactions to the news.