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No, it doesn't, once it has been set up.

AT&T has nothing to do with home sharing, which only requires your home Wi-Fi network to operate. You could still use home sharing even with no Internet service provider at all, once the initial setup is complete.

Well I don't know what to tell you. No Apple devices would work using Apple services (Bonjour type related) within the house. You see that picture of the AppleTV, there was only TWO icons.

The AppleTV could see all my movies (~850) and it could see all my music. It would play music, but it would just sit there like it was stuck in limbo trying to load any movie. These are all hand ripped and none purchased from iTunes.

And like I mentioned, my iOS devices would either not load the Home Sharing library at all, or it would load the list of movies and then when I went to play a movie it would say I do not have permission to watch the movie...again that sounds like an authentication issue.

Seeing as how ALL the issues cleared up as soon as I selected a different DNS server for my computers and devices I would be inclined to believe this was 100% related to Internet connectivity.

Now what may be happening is that if the devices see it has no Internet connection then it make skip the authentication and use some cached version or just do a local handshake. But if it sees that there is some form of Internet connection then it may try to do an official authentication through iTunes. Which in that case, if it can't reach the Apple server it may just time out or deny the handshake.

The point of this post was not to rant about AT&T specifically, but hopefully to get some hits on Google incase someone else has the same issue.

By affecting the DNS, they are not technically blocking a website, but rather just not giving me directions to that website. I could still get there if I knew the IP address. Whether this is on purpose or a case of technical trouble, there is really no way to know.
 
When you restart or plug up an ATV, it has to contact Apple's servers to... I'm not sure. I know it sets time and date, but I assume it does more. Occasionally, it reconnects with them.

From my experience, if you lose internet connectivity for a day or two (or your DNS screws up and you lose connectivity with just Apple), you'll still be able to maintain homesharing as long as the ATV doesn't restart, isn't unplugged, or your power doesn't go out.

Though, after an undetermined length of time, the ATV will try to talk to Apple, and... you're back at the icons the OP was seeing.

I had to get creative when I moved in my new house before internet was hooked up. I was able to get the ATV and homesharing to work, but I had to let the ATV connect to the internet first (some acrobatics with tethering, a wireless bridge, and my Linksys router facilitated that). Homesharing doesn't require an internet connection, but the ATV has to "authorize" itself... or some such nonsense.

Again, this is just my experience. I hope it helps someone.
 
I had the same problems on the same day around the same time. It was also the same time the iTunes store was offline, and apparently that was causing the ATV to not load any of the apps, which was really weird. I confirmed that I couldn't "test" the network connectivity on the ATV, because it does so by hitting the iTunes store; the store was also unavailable on all of my devices. Finally, a twitter search indicated that the iTunes store was down for other users as well. I was still able to access my home server and watch my media, but it did send me into a frantic troubleshooting frenzy for about 30 minutes.
 
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