The FCC has approved the purchase of Insight Communications by Time Warner Cable.
TWC last August agreed to buy Insight for $3 billion in cash. TWC will acquire control of Insight by merging Insight into Derby Merger Sub Inc., a wholly-owned subsidiary of TWC, with Insight as the surviving entity, said the FCC. Insight will become a wholly-owned subsidiary of TWC.
"We have analyzed the potential harms and benefits of the proposed transaction," the FCC said. "On balance, we find that the potential public interest benefits, taken as a whole, outweigh the potential public interest harms. The combined company's broader service footprint, increased operating efficiencies, and greater scale and scope create a potentially stronger competitor to the incumbent LEC especially in light of the combined company's ability to offer IP-based voice and other services to residential and business customers throughout Insight's three-state region. We find that this outweighs the potential harm that could arise from eliminating Insight as a competitor in the limited area in which both companies compete. Accordingly, we find that the transaction serves the public interest, convenience, and necessity. "
That approval also meant granting a waiver of the commission's prohibition on cable operators from buying local phone companies that provide service in their cable franchise areas.
The FCC said that there was limited overlap of those services and pointed out that nobody had opposed the transaction. "We conclude that, overall, approval of the applications will serve the public interest, convenience, and necessity, and hereby grant the applications," the commission said the heads of the wireless and wireline competition bureaus in granting the purchase.
The deal boosts TWC's mid-eastern presence, adding more than 750,000 subs in Indiana, Kentucky and Ohio. Insight is owned by The Carlyle Group, Crestview Partners, MidOcean Partners, members of Insight management and others. Carlyle and Insight management took the company private in December 2005, and Crestview and MidOcean purchased a significant stake in the company in April 2010.
Mike Reynolds contributed to this report.