Time Warner Cable on Monday confirmed its plans to buy Insight Communications. The $3 billion deal gives it control of TV, Internet access, and more across 750,000 homes in Indiana, Kentucky, and Ohio. CEO Glenn Britt claimed the deal, which took Insight out of the hands primarily of private investors like the Carlyle Group, would give it a “well-run, technologically advanced” cable network.
The deal will save about $100 million per year through reduced overhead, much of which should start to take effect in the first two years if the deal closes. Content buys would be part of the savings, but it’s also likely to lead to job cuts as redundant positions are taken away.
Buying Insight may trigger concerns over competition and Internet video. While most cable providers already have effective monopolies or duopolies in the markets they live in, the deal would further cement TWC’s influence in the US and could draw scrutiny from regulators concerned about net neutrality policy as well as media and network consolidation.
Time Warner Cable has sparked worry among many net neutrality advocates as Britt has regularly signaled hopes he could start metered Internet billing. Although ostensibly meant to let users pay only for what they need, it has more often been used in other countries and providers as a way of discouraging competition from cheaper, more flexible Internet video services such as Hulu, iTunes, and Netflix. The company has partly shied away from the approach but now puts it on the table for Insight-owned areas where it hadn’t been an option before.
