In a deal that took most by surprise Monday, AOL is acquiring Time Warner and getting a much-needed asset: a pipeline to cable subscribers. It's an asset that AT&T began developing almost two years ago. "This deal definitely reaffirms AT&T's strategy of delivering broadband over cable," said Kevin Roe, an analyst with ABN AMRO. "AT&T hasn't gotten any [stock] valuation for its cable assets. I think this is a positive affirmation of AT&T's strategy. They did it first." Having massive cable holdings has put AT&T in a pretty powerful position over the last few months. Once AT&T completes its acquisition of MediaOne Group, AT&T will have a total of 15 million subscribers. But with Monday's deal, AOL will have access to the nation's second-largest catalogue of cable subscribers, with 13 million customers. In the past, AOL has battled with AT&T to gain access to AT&T's cable subscribers. But since AOL had no direct pipeline to customers, there was little incentive for AT&T to allow AOL access to its lines. "The deal certainly puts more of an impetus on a relationship with AT&T," said Bruce Leichtman, a cable-industry expert with the Yankee Group consulting firm. "I think it puts more pressure on AT&T to ink an agreement." Leichtman's reasoning is this: AT&T has always been a phone company. It wants to sell long-distance and local phone service and data services to Americans through cable. If it inks deals with the nation's seven largest cable companies, it can offer phone service to 85 percent of the nation's population. On the flip side, AOL's primary mission is to sell Internet service. Until the Time Warner deal, it had no pipeline. Since AT&T's cable assets pass roughly 25 million households, gaining access to AT&T's customers has always been an AOL goal. AOL now has more bargaining power. Despite the attraction of Time Warner's bandwidth, Leichtman said he sees the AOL/Time Warner deal as being about content. AOL will be able to give its customers access to Time Warner's magazines, entertainment programming and news operations, including CNN. He said he doesn't expect AT&T to try to look for a similar partnership in reaction to the merger. "AT&T keeps saying that they are not a content company," Leichtman said. "And I don't see this as a cable investment. It goes well beyond that. I think what AOL is doing is much more related to Internet content." Other big companies have already picked up the same trail. Just hours after AOL and Time Warner announced the deal, SBC Communications issued a statement saying any open-access debate would now have to include access to content. SBC General Counsel James Ellis questioned whether access to CNN would be denied consumers unless they accepted AOL as a carrier. "We used to know exactly what these deals meant," said Atlanta-based telecommunications observer Jeffrey Kagan. "Now, we really don't know all the implications." He said he believes the AOL/Time Warner deal may force AT&T to look for more content opportunities. "There are two pots of gold," he said, "content and pipeline." Neither AT&T nor the combined AOL Time Warner are likely to make overtures toward other cable operators, since regulations prohibit any one company from owning access to more than 30 percent of the US' cable customers. But as climbing stock prices across the sector showed Monday, investors clearly believe cable companies are now takeover targets. However, the Yankee Group's Leichtman pointed out that none of the remaining, stand-alone cable companies have Time Warner's world-wide brand. Instead, they are generally regarded as regional companies. Meanwhile, an interesting footnote to the AOL/Time Warner deal is that AT&T -- once its acquisition of MediaOne Group is complete -- will have a 15 percent stake in a Time Warner phone-services unit. For full coverage, see the AOL-Time Warner News Roundup. What do you think? Tell the Mailroom. And read what others have said.