The Federal Communications Commission will allow AT&T to withdraw its application for merger with T-Mobile USA.

A person familiar with the matter first told The Wall Street Journal of the FCC's decision. The FCC couldn't be reached for comment, and an AT&T spokesman didn't have an immediate comment.

Last week, FCC Chairman Julius Genachowski called for an administrative hearing on the $39 billion AT&T/T-Mobile merger, and other commissioners were expected to agree with the chairman. This likely meant the FCC believed the deal wasn't in the public's best interest, and the companies would have to prove otherwise.

AT&T then said it was withdrawing its application and would attempt to reapply later, but FCC officials said it wasn't that easy. The officials said the company could withdraw with prejudice, which means AT&T couldn't apply for reapplication, or it could deny the withdrawal altogether, which means the FCC would move forward with plans for an administrative hearing.

AT&T was displeased with the FCC blocking its withdraw plans.

We have every right to withdraw our merger from the FCC, and the FCC has no right to stop us, AT&T Executive Vice President and General Counsel Wayne Watts said in a statement at the time. Any suggestion the agency might do otherwise would be an abuse of procedure which we would immediately challenge in court.

Despite the opposition from the FCC, AT&T plans to forge ahead with the merger plans. In order to gain approval from regulators, the company is looking to sell some of its assets. AT&T plans to go to trial Feb.13 against the U.S. Department of Justice, which has filed a lawsuit against the merger.