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Time Warner to Buy Insight for $3 Billion

Cable giant Time Warner, Inc. will buy Insight Communications for $3 billion.

Insight put itself up for auction earlier this year and attracted a host of large bidders. The bids at that time, however, were lower than Insight had reportedly sought, according to sources close to the deal. Company officials did not comment on the potential sale at the time.

Time Warner is the nation’s second-largest cable provider, and the purchase will give the company inroads in the midwestern market. Insight is the nation’s ninth-largest provider.

Businessweek reports that Time Warner “will begin a review of Insight’s employees to retain the best performers…Call-center operators and technicians will likely not be affected because the volume of work won’t change with the acquisition.”

The deal may generate annual cost savings of $100 million within two years, Time Warner Cable said in a statement today.

The acquisition is Time Warner Cable’s biggest since its spinoff from Time Warner Inc. in 2009 and may help the cable operator compensate for declining pay-TV demand. A wider footprint lets Chief Executive Officer Glenn Britt reach more customers while eliminating duplications in programming and corporate costs including staff and infrastructure.

Calls to Insight were not immediately returned.

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Speculation Increases Around Possible Insight Sale

Officials with Insight Communications remain tight-lipped about the company’s potential sale.

The company put itself up for auction in March. The Wall Street Journal cites sources close to the deal who say final bids for the company have come in at around $3 billion and potential buyers include Time Warner Cable, midwestern cable provider Mediacom and the Colorado-based WideOpenWest.

Insight would not confirm or deny any details of the auction or bidders, but a company spokesperson did say a sale isn’t guaranteed.

“We are undertaking the very normal process of examining our company’s strategic options – a review that we have done many times before and has become a commonplace part of our business,” says a statement issued by the company. “This process is something that all healthy company’s do from time to time and we are evaluating a myriad of possible alternatives. In fact, we went through a similar process last year which resulted in a transaction that had absolutely no impact on our customers. Insight has always been focused on delivering the most advanced and reliable technology to our customers and that commitment hasn’t changed.”

The private equity firm the Carlyle Group, which owns 42 percent of Insight, declined to comment.

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Local News Politics

Insight Franchise Agreement Under Review in County Attorney’s Office

The Louisville Metro Council’s Public Works Committee met again Thursday without discussing one piece of legislation that’s been pending before the panel for weeks—Insight Communications’ contract with the city. But the council can’t consider the contract yet, and has no timeline to do so.

The committee approved the contract—called a franchise agreement—last year when it was up for renewal. But, when council members raised questions about whether the document should require Insight to be more open about its finances and operations, the contract was sent back to committee and its sponsors withdrew.

It’s now in the County Attorney’s office, where the city will negotiate the terms with Insight. Some council members have previously said they want more transparency requirements in the document when it comes back up for review. There’s no set date for when that must occur, and the council is expected to hold another public hearing on the contract once it’s renegotiated.

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Local News Next Louisville Politics

Insight Contract Talks To Continue In Metro Council

The Louisville Metro Council ended 2010 with a piece of unfinished business still on the table. The body has yet to decide whether to renew the city’s contract—or franchise agreement—with Insight Communications for the next fifteen years.

When the contract first came up in committee, several council members complained about Insight’s service and cost. Despite that, the renewal passed the committee unanimously.

It was later sent back to that committee when it was revealed the company was late in paying a 2009 tax bill. Councilwoman Madonna Flood says Insight may not be open enough with the city, and the contract should be revised to hold them to stricter transparency rules.

“If they do not perform up to submitting financial records, audits, paying their taxes in time, there has to be some kind of measure that Louisville Metro has to come back at that company, whether it’s to renegotiate the whole franchise agreement or make it null and void,” she says.

“Certainly we’ll continue to work with them and we’re open to any ideas that they may have because we’re committed to Louisville,” says Insight spokesperson Jason Keller.

Keller says the tax bill was received late and that delayed the payment.

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Council Tables 15-Year Insight Agreement Renewal

The agreement that regulates how Insight Cable operates in Louisville will get another review by the Metro Council.

A council committee unanimously approved Insight’s franchise agreement last week. The full council, however, sent the agreement back to the committee Thursday due to some questions about the company’s operations.

Specifically, the council will look at why Insight waited until this month to pay more than five million dollars for taxes owed in 2009. Insight contends that the bill was late, but majority caucus spokesperson Tony Hyatt says more review may be necessary.

“There have been some members of the caucus who have been concerned that there is not enough monitoring of Insight in the light of what we’ve been finding out there in the last week or so,” he says.

Also at question is whether Insight has been open enough with the city. Hyatt says council members will review how well the cable provider has followed recommendations from a previous audit.

“This is going to be more of a situation where the committee looks at what it would like to see as far as any type of annual report or update coming from Insight, because the auditors in 2006 had recommended Insight needed to do an annual report on various areas of its operations.”

While the council may require Insight to report more frequently to the city, it’s not clear whether the body will impose more regulation on rates or services. Hyatt says cities often don’t strongly regulate cable providers.

“As the cable industry and communications in general have been deregulated over the years, the Public Service commission handles an awful lot now, the federal government with the FCC handles a lot now,” he says.

The committee that will review the document will likely meet once more this year.

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Local News Politics

Committee Approves Insight Agreement Extension

A Louisville Metro Council committee Wednesday unanimously approved the extension of the city’s contract with Insight Cable.

Technically called a franchise agreement, the contract regulates Insight’s operations in ways not already controlled by the state or federal government. For instance, the document cannot control how much Insight charges customers or how much it must pay to use existing utility poles, but it can control who pays to put cables on those poles.

Insight attorney Larry Zielke says the franchise agreement mandates that the costs to extend cable to less populous areas must be shared by Insight and homeowners, though the city often helps residents pay such costs.

“There may be a group of a subdivision that comes to their Metro Council member and says ‘We want to get Insight into our neighborhood because they provide such good service.’ The Metro Council member has discretionary funds to have that happen,” he says.

In the past, council members have provided money to help extend lines in their districts. Zielke says if that happens, the city usually retains control of the infrastructure.

“If it’s a private easement, the private easement might specify that it only has one use—let’s say for multi-channel video programming,” he says. “If it’s a public easement, if the city buys an easement for example, then any utility can use it.”

Just four members of the public addressed the committee on Insight’s agreement and three of the speakers work for the cable provider. But the council members provided harsher comments as they questioned the company’s rates and programming options. When asked afterward if the agreement gives Insight a monopoly over cable in the city, Zielke said no; other cable providers may operate under separate franchise agreements. That may not be likely, though, since companies must pay to put their cable lines on existing utility poles.

“There are pole attachment agreements that we have with the utilities, and indeed the Kentucky Public Service Commission regulates how much pole attachment charge either LG&E or AT&T can charge us,” he says.

The agreement also requires Insight to include Metro TV on the basic cable package. The agreement will go before the full council next week for a final vote. The agreement lasts for 15 years.