Apple TV 3 will not setup with iPhone 5S

I reset my Apple TV by reinstalling the operating system. As it boots up it says I can use my iPhone 5S to go through setup. I turn on Bluetooth on the iPhone and go through entering my account name and password. But the Apple TV never goes into automatic setup. I'm just caught in a loop where the TV asks me to enter the account name and password answer two questions about remembering the password and sending data to Apple... over and over and over again.