Before the $85 billion merger of AT&T and Time Warner was official, it was already being decried by people in both presidential campaigns, consumer advocates, lawmakers, and former regulators. Amid this backlash to the news, both companies’ values have taken a bit of a ding today.

As of this afternoon, share prices for AT&T and Time Warner Inc. were both down — around 2% and 3%, respectively — from where they started the day. This is of particular concern for TWX, whose $87/share price is more than 20% below the $107.50/share that AT&T will pay to acquire the company.

Of course, that acquisition is destined to face an awful lot of opposition — as we detailed earlier today — from people and organizations that don’t believe the deal should be allowed, and skepticism from analysts who aren’t certain if the deal will be allowed.

“There is a litany of things to worry about,” analyst Craig Moffett explains to the Wall Street Journal. “The deal faces a steep uphill climb in Washington, and it obviously isn’t helped by the fact that both the Republicans and the Democrats have now come out against it.”

Just this afternoon, Sen. Patrick Leahy (VT), Ranking Member of the Senate Judiciary Committee called on his colleagues to hold a public hearing on the merger.

“This proposed massive consolidation of distribution and content raises potentially serious questions about competition, consumer choice, and privacy across the media, cable TV, wireless and broadband industries,” said the senator.

His colleague on the committee, Sen. Orrin Hatch (UT) was not as ready to tear into the deal, but is not apparently ready to rubber-stamp the merger.

“AT&T and Time Warner’s proposed merger deserves careful scrutiny,” said Hatch in a statement. “The deal will affect hundreds of millions of Americans and lead to increased concentration in the telecommunications space. At the same time, we must be careful not to rush to judgment.”

Meanwhile, AT&T CEO Randall Stephenson is attempting to allay investors’ concerns about another doomed merger. It wasn’t that long ago that AT&T failed at its attempt to acquire T-Mobile USA and had to fork over $4 billion in cash and spectrum to its wireless competitor. And the specter of the failed Comcast merger with Time Warner Cable (a different company than Time Warner Inc.) looms over all cable-industry/telecom deals.

What makes this merger different, argues Stephenson, is that the combination of AT&T and Time Warner Inc. doesn’t remove any competition from the marketplace. In the companies’ views, this is a purely vertical integration of two businesses that complement each other.

“In fact, I’m not sure I know of a situation where vertical integration has been blocked by the government in our two sectors,” Stephenson told analysts during a conference call on Monday, according to the New York Times.

The review process of the merger won’t even begin until both parties file the official notices with the FCC and DOJ, so it remains to be seen if the skittish Wall Street reaction is just a short-term response to the big news — after all, TWX’s share price did jump by around $10 on Friday based solely on speculation of a merger — or if this skepticism will remain for the long-haul of the merger review.

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.