Update Malfunction

I am unable to fully set up my Apple Watch Series 1 (watchOS 6.1) with my iPhone 7 (iOS 14.2) due to a "Software Update" catch-22. I have done a factory reset on the Watch and initiated the pairing through the Watch app on my iPhone several times. The phone usually pairs right away but I get stuck when it asks me to update the watch software. The watch app will consistently says that it cannot update the software because it is "not connected to the internet" even though it is. I tried this several times to ensure I'm not missing anything in the steps, then I even tried pairing my work phone iPhone 8 and same issue. Definite glitch.

Need help!