Comcast Corp. and Insight Communications Company Inc. have reached an agreement on their joint venture, Insight Midwest, which spokespersons from both companies are calling a “dividing of the partnership.”

Insight and a Comcast subsidiary each hold a 50 percent interest in Insight Midwest, which Comcast acquired with its acquisition of AT&T Broadband in 2002. The agreement makes Comcast’s interest in the JV a direct ownership in cash-flow generating cable systems, and no longer a passive investment.

Upon completion of the transaction, Insight will own 100 percent of the cable systems serving customers in Kentucky (in Louisville, Lexington, Bowling Green and Covington), Evansville, Ind., and Columbus, Ohio—approximately 1.3 millions homes passed.

Comcast will own 100 percent of the cable systems serving customers in Illinois (in Rockford/Dixon, Quincy/Macomb, Springfield, Peoria and Champaign/Urbana) and Indiana (in Bloomington, Anderson and Lafayette/Kokomo)—approximately 1.2 million homes passed. Comcast expects the new systems will generate about $290 million in operating cash flow this year.

“This is a logical split for both companies,” said Insight CEO Michael Willner, in a statement. “Comcast already has significant properties in Indiana and Illinois, so it makes sense for them to assume control over the systems in these states.”

Comcast will be responsible for $1.34 billion of partnership debt, and Insight will be responsible for $1.26 billion.

In its 10-K annual report, filed on March 27, Insight estimated Comcast's cash value interest in Insight Midwest to be between $1.1 billion and $1.8 billion.

The transaction’s closing is subject to conditions, including government and other approvals, and it is expected to be completed by the end of the year. Comcast has held the right to dissolve the partnership since Dec. 31, 2005.

Insight, the nation’s ninth largest cable operator, serves approximately 1.4 million customers in Illinois, Kentucky, Indiana and Ohio.