In buying Time Warner Inc., America Online Inc. finds itself with arch-rival AT&T Corp.

AOL and AT&T will be linked through a separate media partnership called Time Warner Entertainment, which consists of Time Warner_s cable-TV systems — Home Box Office, Warner Bros. movie studios and Road Runner, a high-speed Internet access service that works over cable lines. Time Warner Entertainment (TWE), is majority owned by Time Warner (which, of course, AOL is acquiring), and 25.5% owned by cable giant MediaOne Group (which AT&T is buying). Thus, two separate marriages are making cousins out of AT&T and AOL. Problem is, AT&T and AOL have been at serious odds in the marketplace. Each is vying to lead the emerging “broadband” revolution — a big reason AT&T is buying MediaOne, and AOL is buying Time Warner. Each hopes to use cable-TV lines to offer customers voice, high-speed Internet and video services. AOL and AT&T also have polar-opposite views of the “open access” issue, AOL parlance for the notion that cable companies should be forced to lease out their cable-TV lines to Internet service providers such as AOL at low rates. AT&T and its peers have balked at that idea, calling it little more than “forced access.” Publicly, each has painted the other as monopolistic and anticompetitive. Some cable operators think AOL, based in Dulles, Va., will soften its position now that it is buying Time Warner and becoming a cable operator itself. Then there is the Road Runner issue: AT&T, the nation_s biggest cable-TV operator, already has a major stake in Excite At Home Corp., a Road Runner rival that is carried exclusively on AT&T cable systems. (This exclusivity expires in 2002.) Road Runner, which is controlled 50-50 by Time Warner and MediaOne, and Excite At Home don_t currently compete — but they could later on down the road, depending how the broadband market unfolds. So once the MediaOne deal closes, AT&T would have a big influence over both services, a situation that might not sit so well with regulators, much less AOL. The wild card is the Justice Department, which is reviewing the AT&T-MediaOne deal. Many are betting that antitrust regulators won_t let AT&T keep stakes in both At Home and Road Runner, and could force AT&T to sell one of them.