Like most industries, the big fish eat the little fish. So too in the case of cable operators. The number 2 cable giant, Time Warner Cable, has agreed to purchase the number 9 cable operator, Insight Communications. Insight was once twice the size. About six years ago, it sold off half its operations to Comcast and went private. Today they are about three quarter of a million subscribers, with systems in the Midwest.
It is this consolidation that continues to change the state of the communication industry. Satellite has two main competitors, DirecTV and Dish; Telco has three, AT&T, Verizon, and Sprint. Cable still has more, including Comcast, Time Warner Cable, Cablevision, Charter, Cox, Mediacom, and others. To compete effectively in the communication and distribution platform business, cable needs more consolidation for more effective coverage of the US and more efficiency of operations.
At the same time, as these consolidations occur and industries become oligopolies, these industries start to enter into a "too big to fail space". Today we have fewer banking companies, car companies, accounting companies, and now cable companies. In the banking and car businesses, the government swooped in to save them when they became less adept to change and let power corrupt them. Are we in to the same mistakes occurring in the cable industry? Consolidation builds power, but it loses competition, the stuff that keeps them on their toes. As long as telco, cable, and satellite don't start merging each other, competition will keep excessive power at bay.
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