Wall Street's conventional wisdom is that the antitrust issues raised by the $67 billion merger of AT&T ( T) and BellSouth ( BLS) are much ado about nothing. It might be wrong. The thinking on the Street is that the Justice Department will give the merger an obligatory hard look but ultimately confer its official blessing on the big telecom deal. Few expect a Republican administration to erect roadblocks to the transaction, especially since old-fashioned phone lines are no longer viewed as a household necessity. "If you are making a phone call, you can now use cable, VoIP, traditional twisted pairs or wireless,'' says a trader with a Wall Street merger arbitrage firm. "Since there is no geographic overlap between the two companies, any antitrust argument is going to be pretty weak.'' Still, others say Wall Street would be in for a rude surprise if Justice Department antitrust attorneys raise objections about the deal on grounds that it would limit consumer choices in southeastern and southwestern states. The deal also is likely to get a grilling from legislators on Capitol Hill. Some predict that state attorneys general could get into the act if the Justice Department isn't aggressive enough. Critics say regulators may feel they have no choice but to hold up the megadeal out of fear that it will spur copycat acquisitions by AT&T's main competitors, Verizon ( VZ) and Sprint Nextel ( S). If the Justice Department allows the AT&T-BellSouth deal to go through in its present form, critics say, regulators will be hard-pressed to object to any future telecom deals. "They have to look at this pretty seriously,'' says David Balto, an antitrust attorney with Robins Kaplan Miller & Ciresi in Washington, D.C., and former policy director for the Federal Trade Commission's bureau of competition. "You have to draw the line someplace.''