Hopefully this idea/tip will help someone/anyone having trouble activating a new Apple TV (3) -- meaning either it won't activate, or gets stuck trying to set Date & Time or the Time Zone, or logging into your iTunes account won't work, or perhaps you have only 2 icons: home sharing and settings.
Here's what I have been able to deduce - apple requires at least UDP123 for nt. (network time traffic) open to your apple tv for activation, and possibly even more direct internet network exposure for activation. Rather than tinkering with your network or firewall, perhaps try this, as it was the first thing that worked for me. 🙂
1. Set up a personal hotspot on your iPhone or other capable phone - don't worry you won't use much data at all.
2. Power cycle your Apple TV (restart or pull & replace plug).
3. Connect to this temporary tethered wifi network. Go to settings any way you can (menu button several times, etc. to back out of activation attempts) > then General > then Time Zone > Switch automatic ON (it should be off and most likely set to Cupertino, home of good ol' Apple) Give it a sec, and hopefully, your location will be found.
4. Menu button back a few times and marvel at your working Apple TV.
5. Now hurry up and turn off tethering and join your activated apple tv back to your normal wifi or wired network.
This worked for me for TWO brand new Apple TVs I just got, and I'm behind a very strictly configured Cisco ASA firewall that will not allow the traffic Apple wants to activate these devices. The iPhone tethering workaround is the only thing that has worked for me and it did so in under a minute.
Best of luck everyone. I hope this helps anyone with this issue!
Bill