@Home, controlled by Tele-Communications Inc. - soon to be acquired by AT&T - and Road Runner, controlled by Time Warner and MediaOne, have talked about a deal before.

They came oh-so-close. TCI and @Home offered to share revenues with Road Runner based on the number of cable homes each contributed.

By one account, Time Warner wanted the deal, but Media One's Chuck Lillis nixed it. Time Warner and MediaOne insiders say that's not the case and they actually saw eye-to-eye on the matter. But now, several of those insiders agree is more likely, though far from a certainty.

@Home and Road Runner have their differences. @Home is a public company that shares revenues with its cable affiliates. Road Runner 032 . 0000.00is private, primarily serving its cable owners, while keeping a cut for itself.

But the two businesses have more in common than not. Both offer high-speed Internet access to homes over cable lines. @Home offers its service to users of most of the biggest cable operators, including TCI, Comcast, Cox, and Cablevision, while Road Runner is offered to customers of Time Warner and MediaOne.

Linking up would have clear advantages.

If the two services became one, they would create economies of scale and enable customers of each company to share advanced services like phone and games.

Without a national footprint, You lose the power of the cable system, Tom Jermoluk, @Home's boss, said in an interview.

032 . 0000.00In addition, @Home and Road Runner have a common rival: the Baby Bells, which are planning a rival high-speed Internet service over phone wires.

Since the @Home-Road Runner talks failed, the communications landscape has changed.

AT&T announced it will acquire TCI, the nation's No. 2 cable company, to compete with the Baby Bells in the local phone market.

Now AT&T's Michael Armstrong's in talks to affiliate with a slew of other cable operators, primarily Time Warner, the No. 1 cable operator, to offer phone service.

Time Warner boss Jerry Levin wants a deal, and predicts he'll have one soon. Sources say Media One's Chuck Lillis is less interested in an AT&T hookup. But if Armstrong and Levin can win Lillis over, an @Home-Road Runner deal may not be far behind.

There are no such talks now, Armstrong said recently.

But if AT&T and Time Warner link up for phone service, the similar technol032 . 0000.00ogy of @Home and Road Runner would become even more compatible.

(If Armstrong) can find a way through them, or around them, maybe I can use the same thing, said @Home's Jermoluk.

Road Runner won't have to do a lot of extra homework before moving ahead. The company already has seen @Home's financial records from the previous talks.

Jermoluk is optimistic that terms could be easily worked out.

Once they decide they want to do it, it's a couple of weeks, he said.032 . 0000.00 00000

-- Midknight - 11/09/98