A DOJ official said that the department would rather the merger not happen at all, according to CNBC, but that it was open to other proposals in addition to those it laid out. But many, including AT&T executives, expected the acquisition to be finalized by the end of the year, and the DOJ's pushback has all but ensured that won't be the case. Stephenson, however, made it clear that AT&T was prepared to fight attempts to block the deal. "It's time to settle, or it's time to go to court," he said.

Correction: This post originally said AT&T's bid for Time Warner was $85.4 million, rather than $85.4 billion. We apologize for the error.