"The impact from this decision will have wide reaching ramifications across the telecommunications, media, and tech industry for decades to come", said GBH Insights analyst Dan Ives.
The Justice Department has six days to ask the judge to stay his ruling, though Leon said he hoped the government would have the "good judgment, wisdom and the courage" not to do so.
If AT&T wins, the Justice Department may rethink whether to sue to stop other deals where a company buys a supplier, known as a "vertical merger".
But AT&T failed to provide any evidence suggesting that the DOJ's prosecution of the merger had "discriminatory effect and discriminatory intent", Leon said in a ruling earlier in the trial. However, now that the AT&T deal has been approved by a federal judge, there is precedent for such a deal and Comcast believes it won't be blocked.
A ruling in favor of AT&T would also ease the path for a merger. "For AT&T and Time Warner, this is a major victory lap". Disney has bid for 21st Century Fox's entertainment assets, a deal that appears to have been shaped to avoid a challenge by Delrahim's antitrust squad.
The Justice Department had repeatedly suggested the judge consider forcing AT&T to divest some of Time Warner's cable channels.
Trump's frequent attacks on CNN led to much speculation, including from AT&T Chairman and CEO Randall Stephenson, that the president's opposition stemmed from anger over the network's coverage rather than concern over greater corporate consolidation. President Donald Trump, while still a candidate, said he would block the deal "because it's too much concentration of power in the hands of too few". Disney has a deal to buy the bulk of Fox, but Comcast is now expected to make a counterbid, especially with the favorable ruling for AT&T. The government's star witness was Carl Shapiro, an economist at the University of California, who used an economic model to predict that consumer cable bills could rise by $500 million annually in aggregate by 2021. Judge Richard Leon rejected arguments by Justice Department lawyers that the combined company would be too large and too powerful and that the $85 billion deal would harm competition and hurt consumers. In fact, he suggested, consumers could end up paying less after a merger - maybe even $500 million less annually.
"We are disappointed with the Court's decision today", a spokesperson for the agency said in a statement.
AT&T and Time Warner said they need to combine in order to better compete with Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Google (GOOG), companies that are already powerhouses in the content game. And the company said it plans to close the merger, which was announced a year and a half ago, on or before June 20.