AT&T's (NYSE: T) proposed $39 billion acquisition of T-Mobile USA hit another major snag as the Federal Communications Commission's staff declared that the deal is contrary to the public interest and would result in the biggest single concentration in the U.S. mobile market in history.

In a draft order released on Tuesday, the FCC said it found the merger to be anti-competitive. The Department of Justice came to a similar conclusion in August. AT&T and T-Mobile will now have the opportunity to argue against the FCC's declaration before an administrative law judge.

One of AT&T's biggest arguments for the merger was that 4G services would be rolled out faster. But FCC staff found no evidence that would be the case. Nor did they buy the argument that tens of thousands of new jobs would be added.