"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 ruling is also a major blow to Donald Trump's Justice Department.
The ruling blesses the $85 billion merger, one of the biggest media deals ever. Looming in the background of the deal has been Trump's long-running feud with Time Warner's CNN, which he has often derided as "failing" and a purveyor of "fake news". Judge Richard Leon ruled the deal is legal and he did not impose any conditions on the merger. The "drop dead" deadline for completing the merger is June 21.
With or without Time Warner, AT&T is very focused on its media business.
The ruling is a stinging defeat for the Justice Department.
Trump says Canada PM Justin Trudeau comments will cost Canada 'a lot'
The comments dashed hopes that Trump had moved on from what he believed to be was a "dishonest" action by Trudeau. Peter Navarro , the director of the White House National Trade Council, took the attacks a step further.
"AT&T/DirecTV would hinder its rivals by forcing them to pay hundreds of millions of dollars more per year for Time Warner's networks, and it would use its increased power to slow the industry's transition to new and exciting video distribution models that provide greater choice for consumers", the DOJ said in its complaint. Comcast is expected to try to buy much of 21st Century Fox, potentially laying the groundwork for a bidding war with Disney.
As a candidate for president, Trump vowed to block the merger, stating it would concentrate too much power in one company. And in order to stay competitive, AT&T's CEO Randall Stephenson said during the trial that it needed a big deal to survive.
Some critics of President Trump have questioned whether the case was brought as political payback against Time Warner's CNN for unfavorable coverage of President Trump, who often called the cable news channel "fake news".
But the most immediate effect of the deal will be on the already consolidated media market. In fact, he suggested, consumers could end up paying less after a merger - maybe even $500 million less annually.
"The judge's sweeping rejection of the government's case doesn't surprise us at all", AT&T attorney Daniel Petrocelli told reporters outside of the courthouse shortly after the decision was issued. That leverage would allow AT&T to raise prices for Time Warner content, with those costs being passed on to consumers, according to the Justice Department.
In a recent court filing, Redstone said her long-term plan was to create a combined company, which would unite media assets including CBS" broadcast networks, Showtime, MTV, Comedy Central and Nickelodeon, and then sell it. Halford, from OCC added, "All I know is that this will be a blockbuster summer for media mergers!'