Last month, on the weekend before AT&T and the Department of Justice were scheduled to commence what has been called “the anti-trust case of the century,” representatives from the telecommunications behemoth made an 11th-hour gesture toward a truce of sorts. The two sides had been girding for battle since November, when the D.O.J. filed a lawsuit to halt AT&T’s $86 billion acquisition of Time Warner, a protracted regulatory saga that has now been dragging on for a year and a half. During the subsequent months, employees of both AT&T and Time Warner griped about the unfairness of the legal matter, suggesting privately that it seemed like an intricate way for Donald Trump to screw his old frenemy Jeff Zucker, the president of CNN, which Time Warner owns via Turner Broadcasting. They also noted that the government’s interference in a so-called “vertical merger”—where the combined entities do not compete directly, but rather play different roles in the supply chain—had been unheard of in some 40 years. Daniel Petrocelli, lead trial counsel for AT&T and Time Warner, and best known for his work in high-profile cases involving O.J. Simpson and Enron, called the lawsuit a “serious and very troubling departure from decades of legal precedent and anti-trust guidelines.”

Still, on Saturday, March 17, Petrocelli placed a call to Makan Delrahim, a Trump appointee who heads up the D.O.J.’s anti-trust division, to see if he would be open to talking about a settlement, according to several people with knowledge of the call. They had a brief, pleasant conversation that didn’t go anywhere, these people said, in which it was made clear that the only thing the D.O.J. would accept was a full divestiture of Turner. The call ended in cordial defiance. “We expect to win this case,” said Petrocelli, according to one of the people briefed on the call. “Our guys do too,” Delrahim replied. Opening arguments in the non-jury trial began, as expected, on March 22 inside Washington’s E. Barrett Prettyman Federal Courthouse, under the jurisdiction of Judge Richard Leon.

One month later, with closing arguments expected to conclude on April 30, AT&T C.E.O. Randall Stephenson and Time Warner C.E.O. Jeff Bewkes appear likely to get what they want after all. Sources inside both companies are feeling good, if still cautious, about the course the trial has taken over the past two weeks. “I think AT&T is killing them,” one executive who’s been following the trial told me. “If you’re AT&T, all signs seem to be pointing in the direction of: you’re winning.” Third-party analysis supports their optimism. “It feels like the decision is very much leaning towards Time Warner-AT&T,” said M&A attorney Valerie Ford Jacob of Freshfields Bruckhaus Deringer, in a joint interview with her colleague Jennifer Mellott, who specializes in anti-trust at the firm. “It’s not over till it’s over,” Mellott added, “but this case has felt like an uphill battle for the D.O.J. from the very beginning, and the wind seems to be blowing in AT&T and Time Warner’s direction. In a vertical merger, the D.O.J. has the burden to prove in court that the merger will be anti-competitive. It doesn’t feel like they have met that burden.” In particular, Mellott referred to the testimony of economist Carl Shapiro, the government’s star witness, who submitted an economic model claiming that if the merger were to go through, American consumers could end up paying an extra $571 million a year in TV fees by 2021. “The D.O.J. was relying heavily on Shapiro to carry a lot of water, and the general reaction around here is that he has not done that, and in fact other witnesses have pointed out some fundamental issues with the assumptions of his model.”

The logic of the merger—to combine a data-rich mobile giant with an illustrious global media empire (Turner Broadcasting, Warner Bros., CNN, HBO, and more)—always made sense for Wall Street, with the cost savings presumably passed on to consumers. Time Warner would supply the mojo, AT&T the pipes, and both companies would get a fighting chance against the insurgent forces of Netflix, Amazon, Facebook, and Google. The D.O.J. argued doggedly that AT&T should not be allowed to oversee both Turner and the satellite provider DirecTV—which AT&T acquired in 2014—since common ownership of the two television companies could impede competition and give AT&T an incentive to raise prices for rival distributors. Before filing its complaint, the department gave AT&T the option of selling either Turner or DirecTV as a way to get the deal approved, but AT&T balked. Nevertheless, sources familiar with the case told me that an idea was floated in which AT&T might retain an 80 percent ownership stake in Turner, and spin off the remaining 20 percent as a separate public company, thereby limiting its direct control. These sources were under the impression that Petrocelli was prepared to make such a deal to Delrahim when they spoke on March 17. (A person with firsthand knowledge of AT&T’s interactions with the D.O.J. told me that AT&T has not made any settlement offers since the lawsuit was filed five months ago. Neither AT&T nor Time Warner nor the D.O.J. had a comment for this article.)