Stock market slide clouds AT&T's plan to merge with T-Mobile

The stock market squeeze is threatening to take the air out of AT&T's best argument for the regulatory approval of its $39-billion acquisition of T-Mobile USA.

The nation's largest telecommunications company has argued that the combination would not stifle its rivals because there was already "intense competition" in the wireless industry. But with the market slide eroding the already troubled fortunes of many wireless companies, regulators may be wary of a deal that could leave newly merged AT&T too strong in a market with debilitated competitors, analysts said. Critics of the acquisition believe that with fewer companies competing for customers, it's easier for the strongest firms to raise prices and get away with lackluster service.