Adonis Hoffman, former chief of staff and senior legal advisor to FCC Commissioner Mignon Clyburn, said, if accurate, the developments are "troubling."
Vertical mergers with very little competitive impact would usually get a "green light" from regulators, he told "Closing Bell."
"Let's hope that this one is a unique sort of set of circumstances that revolve around the politics and not some sort of policy departure that is going to be ushered in by the Trump administration," he said.
Antitrust attorney Kevin Arquit agrees that AT&T would have a "strong case" in court.
"Vertical deals are generally seen as pro-competitive and so the government is usually loath to try to stop them," he said in an interview with "Power Lunch."
Levin noted blocking such a vertical deal would take the government back to a period most Republicans wanted to leave — when it says "big is bad."
"This has much broader implications. If the Trump Department of Justice is saying 'we're now going to look at vertical deals as potentially anti-competitive,' you're going to see all kinds of investment bankers and all kinds of others go 'whoa, whoa, whoa, wait a minute.' That has precedential problems for lots of other things we're thinking about," said Levin.
"The Department is committed to carrying out its duties in accordance with the laws and the facts," a DOJ spokesperson said in response to Stephenson's statement. "Beyond that, the Department does not comment on any pending investigation."
The Financial Times first reported the Justice Department told AT&T it must sell CNN and later The New York Times reported either CNN or DirecTV must be sold.
— CNBC's Tae Kim and Andrew Ross Sorkin contributed to this report.