AT&T said today that it withdrew from the Federal Communications Commission its application to acquire T-Mobile, and will take a $4 billion charge, or "break-up fee."

AT&T said today that it withdrew from the Federal Communications Commission its application to acquire T-Mobile, and will incur a $4 billion "break-up fee."

The wireless carrier insisted, however, that the deal is not dead, and said it will instead focus on winning an , which seeks to block the merger over competition concerns.

"AT&T Inc. and [T-Mobile parent company] Deutsche Telekom AG are continuing to pursue the sale of Deutsche Telekom's U.S. wireless assets to AT&T and are taking this step to facilitate the consideration of all options at the FCC and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice either through the litigation pending before the United States District Court for the District of Columbia ... or alternate means," AT&T said in a statement. "As soon as practical, AT&T Inc. and Deutsche Telekom AG intend to seek the necessary FCC approval."

The break-up fee, meanwhile, covers $3 billion in cash and spectrum worth $1 billion.

The move comes two days after FCC chairman Julius Genachowski recommended to his fellow commissioners that the because it was not in the public interest.

"The record clearly shows thatin no uncertain termsthis merger would result in a massive loss of U.S. jobs and investment," a senior FCC official said at the time.

The chairman's recommendation was basically a rejection of the deal. But technically, the FCC cannot block a transaction; it can only approve, approve with conditions, or refer to an administrative law judge. In reviewing the deal, the commission found that a combined AT&T and T-Mobile would result in unprecedented concentration and massive layoffs, FCC officials said, prompting Tuesday's order.

An administrative law review operates much like a normal trial, overseen by Judge Richard L. Sippel. The last case of this size to be referred to an administrative law judge was EchoStar-DirecTV in 2002.

The DOJ's case against the merger in February.

Consumer groups viewed the move as a last-ditch effort to save the merger.

"After today's actions, the chances that AT&T will take over T-Mobile are almost gone," Gigi B. Sohn, president and co-founder of Public Knowledge, said in a statement. "While you can never count out AT&T entirely, the fact that they pulled their FCC application speaks volumes about the company's lack of confidence that it could prove in a legal setting at the Federal Communications Commission (FCC) the claims it spent millions of dollars to make about job creation and rural deployment of broadband, among other issues."

Sohn suggested that AT&T was trying to "prevent the FCC from making public its many, well-documented findings that the deal is not in the public interest." She called on the carrier to also withdraw its application from the DOJ "and end this charade once and for all."

Andrew Jay Schwartzman, senior vice president and policy director of the Media Access Project, said the move was an "act of desperation."

"It is time for vainglorious managers at AT&T to accept that there is no way that this deal can obtain approval of the FCC and the courts," he said.

On an otherwise quiet Sunday afternoon in March, AT&T surprised the tech community when it announced plans to . AT&T argued that the purchase will help stop the spectrum crunch and spur the companies' deployment of 4G service. Detractors, especially rival Sprint, countered that the deal would lead to a duopoly, with AT&T and Verizon controlling the wireless industry, and likely lead to job cuts and price hikes.

For more, see Also check out the slideshow below, which chronicles some of the biggest tech-related antitrust suits.