<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934

                 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001
                       COMMISSION FILE NUMBER: 333-89179

                                 KNOLOGY, INC.
            (Exact name of registrant as specified in its charter)

                    DELAWARE                       58-2424258
                    --------                       ----------
          (State or other jurisdiction of      (I.R.S. Employer
          incorporation or organization)       Identification No.)

                   KNOLOGY, INC.
              1241 O.G. SKINNER DRIVE
                WEST POINT, GEORGIA                   31833
                -------------------                   -----
    (Address of principal executive offices)       (Zip Code)

      Registrant's telephone number, including area code: (706) 645-8553

  Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                             Yes [X]   No [ ]

  As of April 30, 2001, we had 448,204 shares of common stock, 50,961,057 shares
of Series A preferred stock, 21,180,131 shares of Series B preferred stock, and
35,674,593 shares of Series C preferred stock outstanding.
<PAGE>

                        KNOLOGY, INC. AND SUBSIDIARIES
                         QUARTER ENDED MARCH 31, 2001


                                     INDEX
<TABLE>
<CAPTION>

                                                                                           PAGE
   PART I     FINANCIAL INFORMATION
   <S>        <C>                                                                          <C>
   Item 1     FINANCIAL STATEMENTS.......................................................    2
              Condensed Consolidated Balance Sheets......................................    2
              Condensed Consolidated Statements of Operations............................    3
              Condensed Consolidated Statement of Cash Flows.............................    4
              Notes to Condensed Consolidated Financial Statements.......................    5
   ITEM 2     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS........................................    7
   ITEM 3     QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK..................   15

   PART II    OTHER INFORMATION

   ITEM 1     LEGAL PROCEEDINGS..........................................................   15
   ITEM 2     CHANGES IN SECURITIES AND USE OF PROCEEDS..................................   15
   ITEM 3     DEFAULTS UPON SENIOR SECURITIES............................................   16
   ITEM 4     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........................   16
   ITEM 5     OTHER INFORMATION..........................................................   16
   ITEM 6     EXHIBITS AND REPORTS ON FORM 8-K...........................................   16
</TABLE>
                                       1
<PAGE>

ITEM 1.   FINANCIAL STATEMENTS

                        KNOLOGY, INC. AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)
                                MARCH 31, 2001
                            (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                        March 31,   December 31,
                                                          2001          2000
                                                        ---------   ------------
                      ASSETS
CURRENT ASSETS:
<S>                                                    <C>            <C>
   Cash and cash equivalents                            $  71,828  $   20,628
   Accounts receivable, net                                11,541      10,697
   Affiliate receivable                                     3,278       3,326
   Prepaid expenses and other                               1,234       1,231
                                                        ---------  ----------
          Total current assets                             87,881      35,882

PROPERTY, PLANT AND EQUIPMENT, net                        389,418     377,421

INVESTMENTS                                                12,013      11,472

INTANGIBLE AND OTHER ASSETS, net                           60,476      64,466

OTHER                                                         203         165
                                                        ---------  ----------
          Total assets                                  $ 549,991  $  489,406
                                                        =========  ==========


        LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Current portion of notes payable                     $      12   $      12
   Accounts payable                                        16,606      30,442
   Accrued liabilities                                      9,176      14,028
   Unearned revenue                                         4,963       4,318
                                                         --------   ---------
          Total current liabilities                        30,757      48,800

NONCURRENT LIABILITIES:
   Long-term notes payable                                 15,558      15,562
   Senior discount notes, net of discount                 362,772     352,054
   Unamortized investment tax credits                         282         299
                                                        ---------   ---------
          Total noncurrent liabilities                    378,612     367,915

          Total liabilities                               409,369     416,715

WARRANTS                                                    4,726       4,726

STOCKHOLDERS' EQUITY
   Convertible preferred stock                              1,051         721
   Common Stock                                                 4           4
   Additional paid-in capital                             345,306     247,730
   Accumulated deficit                                   (210,465)   (180,490)
                                                        ---------   ---------
          Total stockholders' equity                      135,896      67,965
                                                        ---------   ---------
          Total liabilities and stockholders' equity    $ 549,991   $ 489,406
                                                        =========   =========
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
financial statements.

                                       2
<PAGE>

                        KNOLOGY, INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

            (DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                     Three Months Ended
                                                                          March 31,
                                                                      2001        2000
                                                                     -------    --------


<S>                                                              <C>            <C>
OPERATING REVENUES                                               $     23,506   $    18,740
                                                                 ------------   -----------

OPERATING EXPENSES:
   Cost and expenses, excluding depreciation and amortization          25,249        19,729
   Depreciation and amortization                                       18,613        13,461
                                                                 ------------   -----------
            Total operating expenses                                   43,862        33,190
                                                                 ------------   -----------

OPERATING LOSS                                                        (20,356)      (14,450)

OTHER INCOME AND EXPENSES:
   Interest income                                                      1,119         1,397
   Interest expense                                                   (10,348)       (9,549)
   Other (expense) income, net                                           (390)            3
                                                                 ------------   -----------
            Total other income and expenses                            (9,619)       (8,149)
                                                                 ------------   -----------

LOSS BEFORE INCOME TAX BENEFIT                                        (29,975)      (22,599)

INCOME TAX BENEFIT                                                          -         1,557
                                                                 ------------   -----------

NET LOSS                                                         $    (29,975)   $  (21,042)
                                                                 ============   ===========

NET LOSS PER SHARE (Note 3):
   Basic and diluted                                                   $(0.59)       $(0.30)
                                                                 ============   ===========

WEIGHTED AVERAGE SHARES OUTSTANDING                               112,143,251    69,242,869
                                                                 ============   ===========
</TABLE>


The accompanying notes are an integral part of these condensed consolidated
financial statements.

                                       3
<PAGE>

                        KNOLOGY, INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                  (UNAUDITED)

            (DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>

                                                                     Three Months Ended
                                                                          March 31,
                                                                     2001             2000
                                                                 -----------     ------------
<S>                                                                <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                        $(29,975)      $ (21,042)
   Adjustments to reconcile net loss to net cash
    (used in) provided by operating activities:
       Depreciation and amortization                                 18,631          13,461
       Gain on disposition of assets                                      -              (3)
       Amortization of bond discount                                  4,682           4,190
       Changes in operating assets and liabilities:
          Accounts receivable                                          (844)            (93)
          Accounts receivable - affiliate                                48           3,956
          Prepaid expenses and other                                    (40)           (713)
          Accounts payable                                          (13,836)          1,247
          Accrued liabilities and interest                            1,166           4,370
          Unearned revenue                                              645             177
                                                                   --------       ---------
            Total adjustments                                        10,452          26,592
                                                                   --------       ---------
            Net cash (used in) provided by operating activities     (19,523)          5,550
                                                                   --------       ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures, net of retirements                         (25,996)        (23,106)
   Investments                                                         (541)             (5)
   Franchise cost expenditures, net                                    (643)            (25)
   Proceeds from sales of assets                                          -              15
   Proceeds from sales of marketable securities, net                      -           6,069
                                                                   --------       ---------
          Net cash used in investing activities                     (27,180)        (17,052)
                                                                   --------       ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Advances to affiliates                                                 -            (214)
   Proceeds from private placement, net of offering expenses         97,907         130,337
   Principal payments on debt                                            (4)              -
                                                                   --------       ---------
          Net cash provided by financing activities                  97,903         130,123
                                                                   --------       ---------

NET INCREASE IN CASH                                                 51,200         118,621

CASH AT BEGINNING OF PERIOD                                          20,628           7,819
                                                                   --------       ---------

CASH AT END OF PERIOD                                              $ 71,828       $ 126,440
                                                                   ========       =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

   Cash paid during the period for interest                        $    405       $     494
</TABLE>

                                       4
<PAGE>

                        KNOLOGY, INC. AND SUBSIDIARIES

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                MARCH 31, 2001
                                  (UNAUDITED)

            (DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


1.  ORGANIZATION AND NATURE OF BUSINESS

    Knology Inc. (the "Company") offers residential and business customers
  broadband communications services, including analog and digital cable
  television, local and long distance telephone, high-speed Internet access
  service, and broadband carrier services, using advanced interactive broadband
  networks. We own, operate and manage interactive broadband networks in seven
  metropolitan areas: Montgomery and Huntsville, Alabama; Columbus and Augusta,
  Georgia; Panama City, Florida; Charleston, South Carolina; and Knoxville,
  Tennessee. We also provide local telephone services in West Point, Georgia,
  and Lanett and Valley, Alabama. Our local telephone service in this area is
  provided over a traditional copper wire network while our cable and Internet
  services are provided over our broadband network. We plan to expand to
  additional mid-to-large-sized cities in the southeastern United States.

    The Company has experienced operating losses as a result of the expansion of
  its advanced interactive broadband communications networks and services into
  new and existing markets. Management expects to continue to focus on
  increasing the customer base and expanding the Company's broadband operations.
  Accordingly, the Company expects that it will continue to experience operating
  losses in accordance with the business plan. While management expects its
  expansion plans to result in profitability, there can be no assurance that
  growth in the Company's revenue or customer base will continue or that the
  Company will be able to achieve or sustain profitability and/or positive cash
  flow.

2.  BASIS OF PRESENTATION

    The accompanying unaudited condensed consolidated financial statements of
  the Company have been prepared in accordance with accounting principles
  generally accepted in the United States for interim financial information and
  with the instructions to Form 10-Q and Article 10 of Regulation S-X.
  Accordingly, they do not include all of the information and footnotes required
  by generally accepted accounting principles for complete financial statements.
  In the opinion of management, all adjustments considered necessary for the
  fair presentation of the financial statements have been included, and the
  financial statements present fairly the financial position and results of
  operations for the interim periods presented. Operating results for the three
  months ended March 31, 2001 are not necessarily indicative of the results that
  may be expected for the year ended December 31, 2001. These financial
  statements should be read in conjunction with the consolidated financial
  statements and notes thereto, together with management's discussion and
  analysis of financial condition and results of operations contained in the
  Company's 2000 Annual Report on Form 10-K for the year ended December 31,
  2000.

    Certain amounts included in the 2000 financial statements have been
  reclassified to conform to the 2001 financial statements.

3.  NET LOSS PER SHARE

    In 1997, the Company adopted SFAS No. 128, "Earnings Per Share." This
  statement requires the disclosure of basic net income (loss) per share and
  diluted net income (loss) per share. Basic net income (loss) per share is
  computed by dividing net income (loss) by the weighted-average number of
  common shares outstanding during the period. Diluted net loss per share gives
  effect to all potentially dilutive securities. As the Company has no
  significant common stock outstanding, the convertible preferred stock is
  assumed to be converted for purposes of this calculation. The Company's other
  potentially dilutive securities, including stock options and stock warrants,
  are not included in the computation of diluted net loss per share as their
  effect is antidilutive.

    In January 2001, a non-cash dividend was recognized in conjunction with the
  issuance of Series C preferred stock and the amendment of the conversion
  ratios of the Company's Series A preferred stock and Series B preferred stock
  into common stock (Note 4).  The following table represents a reconciliation
  of the net loss per the condensed consolidated statement of operations to the
  net loss attributable to equivalent common stockholders:

                                       5
<PAGE>

                                                               2001
                                                           -------------
Net loss.................................................. $    (29,975)
Non-cash distribution to preferred stockholders...........      (36,579)
                                                           ------------
Net loss attributable to equivalent common stockholders... $    (66,554)
Weighted average shares outstanding.......................  112,143,251
Net loss per share........................................ $      (0.59)

4.  EQUITY TRANSACTIONS

    In February 2000, ITC Holding Company, Inc., in connection with a
 reorganization of certain of its businesses, distributed to its option holders
 options to purchase 6,258,036 shares of our Series A preferred stock, and
 distributed to its shareholders all of its 43,211,531 shares of our Series A
 preferred stock. As a result of this distribution, we are no longer a
 subsidiary of ITC Holding. The shares of Series A preferred stock are
 convertible into shares of our common stock at any time at the option of the
 holder and automatically upon the completion of a firm-commitment underwritten
 public offering in which (1) if the offering is completed in 2001, the price
 per share is $4.00; if the offering is completed in 2002, the price per share
 is $5.00; and if the offering is completed in 2003 or thereafter, the price per
 share is $6.00, (2) the gross proceeds to us are at least $50 million and (3)
 the common stock sold in the offering is listed on the Nasdaq National Market
 or on a national securities exchange (a "Qualified Public Offering").  The
 shares are convertible into shares of common stock on a one-to-1.0371 basis,
 subject to customary anti-dilution adjustments.

    On February 7, 2000, we completed a private placement of 21,180,131 shares
 of our Series B preferred stock to a small group of institutional investors and
 certain of our executive officers for approximately $100.6 million. The shares
 of Series B preferred stock are convertible into shares of our common stock at
 any time at the option of the holder and automatically upon the completion of a
 Qualified Public Offering. The shares are convertible into shares of common
 stock on a one-to-1.4865 basis, subject to customary anti-dilution adjustments.

    On January 12, 2001, we completed a private placement of 31,166,667 shares
 of our Series C preferred stock to a small group of institutional investors for
 approximately $93.5 million. On March 30, 2001, we completed another private
 placement of 1,885,996 shares of Series C preferred stock to a small group of
 accredited investors for approximately $5.7 million. The shares of Series C
 preferred stock are convertible into shares of our common stock at any time at
 the option of the holder and automatically upon the completion of a Qualified
 Public Offering. The shares are convertible into shares of common stock on a
 one-to-one basis, subject to customary anti-dilution adjustments.

    In connection with the January 12, 2001 private placement of Series C
  preferred stock, the Company amended its amended and restated certificate of
  incorporation to adjust the ratios at which the Series A preferred stock and
  Series B preferred stock convert into common stock to the ratios set forth
  above. With respect to the amendment of the conversion ratios of the Series A
  preferred stock and Series B preferred stock, the Company recognized a non-
  cash dividend in January 2001 (Note 3).

5.  SEGMENT INFORMATION

    Effective January 1998, the Company adopted SFAS 131, "Disclosures about
  Segments of an Enterprise and Related Information," which established revised
  standards for the reporting of financial and descriptive information about
  operating segments in financial statements.

    The Company owns and operates advanced interactive broadband networks and
  provides residential and business customers broadband communications services,
  including analog and digital cable television, local and long distance
  telephone, and high-speed Internet access, which the Company refers to as
  video, voice, and data services. We also provide other services including
  broadband carrier services, which includes local transport services such as
  local Internet transport, special access, local private line, and local loop
  services.

    While management of the Company monitors the revenue generated from each of
  the various broadband services, operations are managed and financial
  performance is evaluated based upon the delivery of multiple services to
  customers over a single network. As a result of multiple services being
  provided over a single network, many expenses and assets are shared related to
  providing the various broadband services to customers. Management believes
  that any allocation of the shared expenses or assets to the broadband services
  would be subjective and impractical.


                                       6
<PAGE>

    Revenues by broadband communications service are as follows:

                               THREE MONTHS ENDED MARCH 31,
                                   2001          2000
                               ----------     ---------
Video.........................   $11,237        $ 9,714
Voice.........................     9,989          7,673
Data and Other................     2,280          1,353
                                 -------        -------
Consolidated Revenues.........   $23,506        $18,740
                                 =======        =======

6.  SUBSEQUENT EVENTS

    On April 13, 2001 the Company issued to a small group of accredited
  investors, in a private placement, 2,621,930 shares of its Series C preferred
  stock, at a purchase price of $3.00 per share, for aggregate proceeds of
  approximately $7.9 million.


ITEM 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

    THE MANAGEMENT'S DISCUSSION AND ANALYSIS AND OTHER PORTIONS OF THIS REPORT
INCLUDE "FORWARD-LOOKING" STATEMENTS WITHIN THE MEANING OF THE FEDERAL
SECURITIES LAWS, INCLUDING THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995,
THAT ARE SUBJECT TO FUTURE EVENTS, RISKS AND UNCERTAINTIES THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED. IMPORTANT
FACTORS THAT EITHER INDIVIDUALLY OR IN THE AGGREGATE COULD CAUSE ACTUAL RESULTS
TO DIFFER MATERIALLY FROM THOSE EXPRESSED INCLUDE, WITHOUT LIMITATION, (1) THAT
WE WILL NOT RETAIN OR GROW OUR CUSTOMER BASE, (2) THAT WE WILL FAIL TO BE
COMPETITIVE WITH EXISTING AND NEW COMPETITORS, (3) THAT WE WILL NOT ADEQUATELY
RESPOND TO TECHNOLOGICAL DEVELOPMENTS IMPACTING OUR INDUSTRY AND MARKETS, (4)
THAT NEEDED FINANCING WILL NOT BE AVAILABLE IF AND AS NEEDED, (5) THAT A
SIGNIFICANT CHANGE IN THE GROWTH RATE OF THE OVERALL U.S. ECONOMY WILL OCCUR
SUCH THAT CONSUMER AND CORPORATE SPENDING ARE MATERIALLY IMPACTED, AND (6) THAT
SOME OTHER UNFORESEEN DIFFICULTIES OCCUR, AS WELL AS THOSE RISKS SET FORTH IN
OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2000, WHICH ARE
INCORPORATED HEREIN BY REFERENCE. THIS LIST IS INTENDED TO IDENTIFY ONLY CERTAIN
OF THE PRINCIPAL FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS INCLUDED HEREIN.

    The following is a discussion of our consolidated financial condition and
results of operations for the three months ended March 31, 2001 and certain
factors that are expected to affect our prospective financial condition. The
following discussion and analysis should be read in conjunction with the
financial statements and notes thereto and other financial data included
elsewhere in this Form 10-Q.

GENERAL

    Knology, Inc. was formed in September 1998 to enable ITC Holding to complete
a reorganization of some of its subsidiaries. In November 1999, in order to
effectuate the reorganization:

-  ITC Holding contributed to Knology, Inc.:

   -  its 85% interest in Knology Broadband, Inc. (formerly Knology Holdings,
      Inc.);

   -  all of the outstanding capital stock of Interstate Telephone Company,
      Inc., Valley Telephone Company, Inc., Globe Telecom, Inc. and ITC Globe,
      Inc., referred to as our "telephone operations group;"

   -  a note in the principal amount of $9.6 million; and

   -  its 6% interest in ClearSource, Inc., subscription rights to purchase
      ClearSource shares and $5.6 million in cash to purchase the additional
      ClearSource shares; and

                                       7
<PAGE>

-  the holders of the remaining 15% interest in Knology Broadband exchanged that
   interest for shares of Knology, Inc. and the holders of outstanding warrants
   to purchase Knology Broadband preferred stock exchanged those warrants for
   warrants to purchase preferred stock of Knology, Inc.

    As a result of the reorganization, ITC Holding held a 90% interest in us,
which it distributed to its stockholders in February 2000.

    The reorganization was accounted for in a manner similar to a pooling of
interest for the telephone operations group. Knology Broadband and its
subsidiaries are treated as an equity investment in our consolidated financial
statements from 1996 through June 1998 because ITC Holding owned 29.0% of
Knology Broadband during that time. Knology Broadband and its subsidiaries have
been consolidated in our financial statements since July 1998 when ITC Holding
increased its ownership to 85.0%. The 1998 financials include the accounts of
Knology Broadband for the entire year and the minority interest in losses
includes the 58.0% share of Knology Broadband's losses for the period from
January 1998 to July 1998.

    In January 2000, InterCall, Inc., a subsidiary of ITC Holding, loaned us
$29.7 million to fund our capital expenditures and working capital. The loan,
which had a maturity date of March 31, 2000, provided that InterCall could elect
to convert it into options to purchase our Series A preferred stock. In February
2000, InterCall converted the loan into options to purchase 6,258,036 shares of
our Series A preferred stock, and we issued to ITC Holding a note under which we
will pay ITC Holding any proceeds from option exercises received by us,
including an amount equal to the exercise price for cashless exercises. The
options were distributed to ITC Holding's option holders on February 4, 2000.

    In June 1998, Knology Broadband acquired TTE Inc., a non-facilities based
reseller of local, long-distance and operator services in Charleston, South
Carolina. The acquisition was accounted for as a purchase, and the results of
TTE have been included in our financial statements since the date of its
acquisition.

    In September 1998, Knology Broadband acquired the Cable Alabama cable
television system serving the Huntsville, Alabama area. The acquisition was
accounted for as a purchase and the operations of the system have been included
in our financial statements since the date of its acquisition.



REVENUES AND EXPENSES

    We have incurred net losses in each quarter since our inception, and as of
March 31, 2001, the accumulated deficit had reached approximately $210.5
million. We anticipate incurring net losses during the next several years while
continuing to expand operations, and as a result of substantially increased
depreciation and amortization from the construction of the new networks and
operating expenses incurred in building the customer base. There can be no
assurance that growth in revenue or the subscriber base will continue or that we
will be able to achieve or sustain profitability or positive cash flow.

    We can group our revenues into the following categories:

    - Video revenues. Our video revenues consist of fixed monthly fees for
      expanded basic, premium and digital cable television services, as well as
      fees from pay-per-view movies and events such as boxing matches and
      concerts, that involve a charge for each viewing. Video revenues accounted
      for approximately 51.8% and 47.8% of our consolidated revenues for the
      three months ended March 31, 2000 and 2001, respectively.

    - Voice revenues. Our voice revenues consist primarily of fixed monthly fees
      for local service, enhanced services such as call waiting and voice mail,
      and usage fees for long distance service. Voice revenues accounted for
      approximately 40.9% and 42.5% of our consolidated revenues for the three
      months ended March 31, 2000 and 2001, respectively.

    - Data revenues and other revenues. Our data revenues consist primarily of
      fixed monthly fees for Internet access service and rental of cable modems.
      Other revenues resulted principally from broadband carrier services. These
      combined revenues accounted for approximately 7.2% and 9.7% of our
      consolidated revenues for the three months ended March 31, 2000 and 2001,
      respectively.

                                       8
<PAGE>

      As we continue to sell bundled services, we expect that our voice and data
  and other revenues will continue to increase at a higher rate compared to
  video revenues. Accordingly, we expect that our voice and data and other
  revenues will represent a higher percentage of consolidated revenues in the
  future.

Our operating expenses include cost of services, selling, operations and
administrative expenses and depreciation and amortization.

Cost of services include:

  -   Video cost of services. Video cost of services consist primarily of
      monthly fees to the National Cable Television Cooperative and other
      programming providers, and are generally based on the average number of
      subscribers to each program. Programming costs are our largest single cost
      and we expect this to continue. Since programming cost is partially based
      on the numbers of subscribers, it will increase as we add more
      subscribers. Additionally, programming costs will increase as cost per
      program channel increases over time.

  -   Voice, Data and Other cost of service. Voice, data and other cost of
      services consist primarily of transport cost and network access fees.

Selling, operations and administrative expenses include:

  -   Sales and marketing costs. Sales and marketing costs include the cost of
      sales and marketing personnel, and advertising and promotional expenses.

  -   Network operations and maintenance expenses. Network operations and
      maintenance expenses include payroll and departmental costs incurred for
      network design and maintenance monitoring.

  -   Customer service expenses. Customer service expenses include payroll and
      departmental costs incurred for customer service representatives and
      management.

  -   General and administrative expenses. General and administrative expenses
      consist of corporate and subsidiary general management and administrative
      costs.

  Depreciation and amortization expenses include depreciation of our interactive
broadband networks and equipment, and amortization of cost in excess of net
assets and other intangible assets related to acquisitions.

  As our sales and marketing efforts continue and our networks expand, we expect
to add customer connections resulting in increased revenue. We also expect our
operating expenses, including depreciation and amortization, to increase as we
expand our networks and business.

  We have experienced operating losses as a result of the expansion of our
advanced broadband communications networks and services into new and existing
markets. We expect to continue to focus on increasing our customer base and
expanding our broadband operations. Accordingly, we expect that our operating
expenses and capital expenditures will continue to increase as we extend our
interactive broadband networks in existing and new markets in accordance with
our business plan.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2001 COMPARED WITH THREE MONTHS ENDED MARCH 31,
2000

The following table sets forth financial data as a percentage of operating
revenues for the three months ended March 31, 2001 and 2000.

                                               THREE MONTHS ENDED
                                                   MARCH 31,
                                               2001         2000
                                             --------     --------
     Operating revenues:
         Video...........................        48%          52%
         Voice...........................        42           41
         Data and other..................        10            7
                                             ------       ------
            Total........................       100          100
     Operating expenses:

                                       9
<PAGE>

             Cost and expenses, excluding
              depreciation and amortization     108          105
             Depreciation and amortization..     79           72
                                             ------       ------
              Total.........................    187          177
                                             ------       ------
            Operating loss..................    (87)         (77)
            Other income and expenses, net..    (41)         (43)
                                             ------       ------
            Loss before income tax benefit..   (128)        (120)
            Income tax benefit..............      0            8
                                             ------       ------

            Net loss........................   (128)%       (112)%
                                             ======       ======

  The following table sets forth certain operating and financial data for the
periods ended March 31, 2001 and 2000:

                                        AS OF MARCH 31,
                                        2001     2000     CHANGE       %
                                      -------   -------   ------    -----
MARKETABLE HOMES PASSED (1).......... 388,710   317,859   70,851     22.3 %
CONNECTIONS (2)
   Video............................. 105,859    93,770   12,089     12.9 %
                                      -------   -------   ------    -----
   Voice
     On Net..........................  61,034    41,006   20,028     48.8 %
     Off Net.........................   6,936     7,609     (673)    (8.8)%
                                      -------   -------   ------    -----
                                       67,970    48,615   19,355     39.8 %
   Data..............................  18,885     7,662   11,223    146.5 %
                                      -------   -------   ------    -----
     Total........................... 192,714   150,047   42,667     28.4 %
                                      =======   =======   ======    =====

(1)  Marketable homes passed are the number of small business and residential
     units, such as single residence homes, apartments and condominium units,
     passed by our broadband networks other than those we believe are covered by
     exclusive arrangements with other providers of competing services.

(2)  All of our video and data connections are provided over our networks. Our
     voice connections consist of both "on net" and "off net" connections. On-
     net refers to lines provided over our broadband networks. It includes
     22,697 and 23,271 lines as of March 31, 2000 and 2001, respectively,
     provided using traditional copper telephone lines. Off-net refers to
     telephone connections provided over telephone lines leased from third
     parties.
<TABLE>
<CAPTION>
                                                                       THREE MONTHS ENDED
                                                                            MARCH  30,
                                                                        2001       2000      CHANGE     %
                                                                      --------   --------   -------   -----
         <S>                                                          <C>        <C>        <C>       <C>
         OPERATING REVENUES:
            Video..................................................   $ 11,237   $  9,714   $ 1,523    15.7%
            Voice..................................................      9,989      7,673     2,316    30.2%
            Data and other.........................................      2,280      1,353       927    68.5%
                                                                      --------   --------   -------   -----
                  Total............................................     23,506     18,740     4,766    25.4%
         OPERATING EXPENSES:
           Cost and expenses, excluding depreciation
            and amortization.......................................     25,249     19,729     5,520    28.0%
            Depreciation and amortization..........................     18,613     13,461     5,152    38.3%
                                                                      --------   --------   -------   -----
                  Total............................................     43,862     33,190    10,672    32.2%
                                                                      --------   --------   -------   -----
         OPERATING LOSS............................................    (20,356)   (14,450)   (5,906)   40.9%
         OTHER INCOME AND EXPENSES, NET............................     (9,619)    (8,149)   (1,470)   18.0%
         LOSS BEFORE INCOME TAX BENEFIT............................    (29,975)   (22,599)   (7,376)   32.6%
         INCOME TAX BENEFIT........................................          0      1,557    (1,557)  100.0%
                                                                      --------   --------   -------   -----
         NET LOSS..................................................   $(29,975)  $(21,042)  $(8,933)   42.5%
                                                                      ========   ========   =======   =====
</TABLE>

   Revenues. Operating revenues increased 25.4% from $18.7 million for the three
months ended March 31, 2000, to $23.5 million for the three months ended March
31, 2001. Operating revenues from video services increased 15.7% from $9.7
million for the three months ended March 31, 2000 to $11.2 million for the same
period in 2001. Operating revenues from voice services increased 30.2% from $7.7
million for the three months ended March 31, 2000 to $10.0 million for the same
period in 2001. Operating revenue from data and other services increased 68.5%
from $1.4 million for the three months ended March 31, 2000 to $2.3 million for
the same period in 2001, $2.1 million of which were revenues from data services
in 2001.

                                      10
<PAGE>

   The increased revenues from voice, video and data and other services are due
primarily to an increase in the number of connections, from 150,047 as of March
31, 2000 to 192,714 as of March 31, 2001. The additional connections resulted
primarily from:

 .  the extension of our broadband networks in the Augusta and Charleston
   markets;

 .  the upgrade of our existing one-way network to an advanced interactive
   broadband network in Huntsville;

 .  internal growth in connections generated by our sales and marketing efforts;
   and

 .  the construction of a new broadband network in Knoxville.

  Expenses. Operating expenses, excluding depreciation and amortization
increased 28.0% from $19.7 million for the three months ended March 31, 2000, to
$25.2 million for the three months ended March 31, 2001. The increase in our
operating expenses is consistent with the growth in revenues and is a result of
the expansion of our operations and the increase in the number of employees
associated with such expansion and growth into new markets. We expect our
operating expenses to continue to increase as we add more connections. Selling,
operations and administration expenses will increase operating expenses as we
expand into additional markets. Programming costs, which are our largest single
expense item, have been increasing over the last several years on an aggregate
basis due to an increase in subscribers and on a per subscriber basis due to
increase in costs per program channel. We expect this trend to continue. We may
not be able to pass these higher costs on to customers because of competitive
forces, which would adversely affect our cash flow and operating margins.

  Depreciation and amortization increased 38.3% from $13.5 million for the three
months ended March 31, 2000, to $18.6 million for the three months ended March
31, 2001. The increase in depreciation and amortization is due to significant
additions in property, plant and equipment resulting from the expansion of our
networks; the upgrading of older systems to broadband capabilities; and the
purchase of buildings, computers and office equipment. We expect our
depreciation and amortization expense to continue to increase as we make capital
expenditures to extend our existing networks and build additional networks.

  Other Income and Expense. Interest income was $1.4 million for the three
months ended March 31, 2000, compared to $1.1 million for the same period in
2001. The interest income earned is the result of the short term investment of
the proceeds from our equity transactions.

  Interest expense increased from $9.5 million for the three months ended March
31, 2000, to $10.3 million for the three months ended March 31, 2001. The
increase in interest expense is due to the accretion of the book value of the
11 7/8% senior discount notes issued by Knology Broadband in October 1997. We
capitalized interest related to the construction of our broadband networks of
$528 and $777 for the three months ended March 31, 2000 and 2001, respectively.

  Income Tax Benefit. We recorded an income tax benefit of $1.6 million for the
three months ended March 31, 2000. The income tax benefit in 2000 resulted from
our utilizing net tax losses under a tax sharing agreement with ITC Holding. The
tax sharing agreement became effective August 1998 upon the acquisition by ITC
Holding of its majority interest in Knology Broadband. Following the spinoff of
Knology, Inc. by ITC Holding, effective February 7, 2000, we no longer
participate in the tax sharing agreement. Therefore, we no longer receive any
payments from ITC Holding related to income tax benefits. As a stand-alone
entity after the spin-off, we now record a full valuation allowance against any
income tax benefit until management determines that it will be more likely than
not that a tax benefit will be realized, at which time a tax benefit will be
recorded.

  Net Loss Attributed to Common Stockholders. We incurred a net loss of $21.0
million for the three months ended March 31, 2000, compared to a net loss of
$29.9 million for the three months ended March 31, 2001. We expect net losses to
continue to increase as we continue to expand our business.

LIQUIDITY AND CAPITAL RESOURCES

  As of December 31, 2000, we had a net working capital deficit of $12.9
million, compared to net working capital of $57.1 million at March 31, 2001. The
increase in working capital is principally due to the completion of funding for
the private placement of our Series C preferred stock.

                                      11
<PAGE>

  Operating activities provided cash of $5.5 million and used cash of $19.5
million for the three months ended March 31, 2000 and 2001, respectively. The
net cash flow activity related to operations consists primarily of changes in
operating assets and liabilities and adjustments to net loss for non-cash
depreciation and amortization.

  Investing activities used cash of $17.1 million and $27.2 million for the
three months ended March 31, 2000 and 2001, respectively. Investing activities
in the 2001 period primarily consisted of $26.0 million of capital expenditures,
$643 of franchise cost expenditures, and a $496 investment in Clearsource.

  Financing activities provided cash of $130.1 million and $97.9 million for the
three months ended March 31, 2000 and 2001, respectively. Financing activities
in the three months ended March 31, 2001 consisted of $97.9 million in proceeds,
net of expenses, from the private placement of Series C preferred stock.

FUNDING TO DATE

  We have raised equity capital and borrowed money to finance a significant
portion of our operating, investing and financing activities in the development
of our business. In October 1997, Knology Broadband received net proceeds of
approximately $242.4 million from the offering of units consisting of senior
discount notes due 2007 and warrants to purchase preferred stock. The notes were
sold at a substantial discount from their principal amount at maturity, and
there will not be any payment of cash interest on the notes prior to April 15,
2003. The notes will fully accrete to face value of $444.1 million on October
15, 2002. From and after October 15, 2002, the notes will bear interest, which
will be payable in cash, at a rate of 11 7/8% per annum on April 15 and October
15 of each year, commencing April 15, 2003. The indenture contains a number of
covenants that restrict the ability of Knology Broadband and its subsidiaries to
take certain actions, including the ability to:

       -        incur indebtedness;

       -        pay dividends;

       -        prepay subordinated indebtedness;

       -        redeem capital stock;

       -        make investments;

       -        engage in transactions with stockholders and affiliates;

       -        create liens;

       -        sell assets; and

       -        engage in mergers and consolidations.

  If Knology Broadband fails to comply with these covenants, Knology Broadband's
obligation to repay the notes may be accelerated. However, these limitations are
subject to a number of important qualifications and exceptions. In particular,
while the indenture restricts Knology Broadband's ability to incur additional
indebtedness by requiring compliance with specified leverage ratios, it permits
Knology Broadband and its subsidiaries to incur an unlimited amount of
indebtedness to finance the acquisition of equipment, inventory and network
assets and to secure such indebtedness, and to incur up to $50 million of
additional secured indebtedness. Upon a change of control of Knology Broadband,
as defined in the indenture, Knology Broadband would be required to make an
offer to purchase the notes at a purchase price equal to 101% of their accreted
value, plus accrued interest.

  In November 1999, we completed an exchange in which we received the Knology
Broadband warrants, issued in connection with the senior discount notes in 1997,
in exchange for warrants to purchase shares of our Series A preferred stock.

  On December 22, 1998, Knology Broadband entered into a $50 million four-year
senior secured credit facility with First Union National Bank and First Union
Securities, Inc. This credit facility allows Knology Broadband to borrow up to
five times the annualized consolidated adjusted cash flow of each of its
subsidiaries, if such subsidiary's cash flow is positive. The credit facility
may be used for working capital and other purposes, including capital
expenditures and permitted acquisitions. At Knology Broadband's

                                      12
<PAGE>

option, interest will accrue based on either the prime or federal funds rate
plus applicable margin or the LIBOR rate plus applicable margin. The applicable
margin may vary from .50% to 2.50% based on the leverage ratio of Knology
Broadband. The credit facility contains a number of covenants that restrict the
ability of Knology Broadband and its subsidiaries to take certain actions,
including the ability to :

       -        incur indebtedness;

       -        create liens

       -        pay dividends;

       -        make distributions or stock repurchases;

       -        make investments;

       -        engage in transactions with affiliates;

       -        sell assets; and

       -        engage in mergers and acquisitions.

  The credit facility also includes covenants requiring compliance with certain
operating and financial ratios on a consolidated basis, including the number of
customer connections and average revenue per subscriber. Knology Broadband is
currently in compliance with these covenants, but there can be no assurances
that Knology Broadband will remain in compliance. Should Knology Broadband not
be in compliance with the covenants, Knology Broadband would be in default and
would require a waiver from the lender. In the event the lender would not
provide a waiver, amounts outstanding under the facility could be payable to the
lender on demand. A change of control of Knology Broadband, as defined in the
credit facility agreement, would constitute a default under the covenants.

  The maximum amount available under the credit facility as of March 31, 2001
was approximately $17 million, assuming compliance with all of the operating and
financial covenants. As of March 31, 2001, $15.5 million had been drawn against
the credit facility.

  We obtained an aggregate of approximately $39.4 million in loans from ITC
Holding and its subsidiary InterCall during November 1999 and January 2000.
Approximately $9.6 million of these advances were provided to us in November
1999. This loan was converted into 2,029,724 shares of Series A preferred stock
in November 1999. Another $29.7 million loan was made in January 2000. The loan
bore interest at an annual rate of 11 7/8% and had a maturity date of March 31,
2000. In February 2000, the loan was converted into options to purchase up to
6,258,036 shares of our Series A preferred stock, and we issued to ITC Holding a
note under which we will pay ITC Holding any proceeds from option exercises
received by us, including an amount equal to the exercise price for cashless
exercises. The options were distributed to ITC Holding's option holders on
February 4, 2000.

  In connection with our spin-off from ITC Holding in February 2000, we entered
into an agreement with ITC Holding in which we made certain covenants that
restricted our ability to issue additional shares of capital stock under certain
circumstances. In connection with our private placement of 31,166,667 shares of
our Series C preferred stock on January 12, 2001, ITC Holding agreed to release
us from these covenants pursuant to the agreement. Accordingly, we are no longer
restrained by the ITC Holding agreement with respect to the issuance of
additional shares of capital stock.

  In February 2000, we issued to qualified investors in an equity private
placement 21,180,131 shares of our Series B preferred stock at a purchase price
of $4.75 per share, for aggregate proceeds of approximately $100.6 million.

  On January 12, 2001, the Company issued to certain existing investors and a
select group of new accredited investors, in a private placement, 31,166,667
shares of Series C preferred stock at a purchase price of $3.00 per share, for
aggregate proceeds of $93.5 million. In connection with the completion of this
private placement, we amended our amended and restated certificate of
incorporation to adjust the ratios at which our Series A preferred stock and
Series B preferred stock convert into common stock. Prior to the completion of
the private placement of Series C preferred stock, both the shares of Series A
preferred stock and shares of Series B

                                      13
<PAGE>

preferred stock converted into shares of common stock on a one-to-one basis. As
amended, the conversion price for each share of Series A preferred stock was
reduced from $4.75 per share to $4.58 per share and the conversion price for
each share of Series B preferred stock was reduced from $4.75 per share to
$3.1954 per share, both as may be further adjusted for stock splits and
dividends and issuances of additional shares of capital stock and rights to
purchase capital stock at a per share price less than $3.1954, other than
additional issuances of the Series C preferred stock at $3.00 per share or more
prior to April 15, 2001. With respect to the amendment of the conversion prices
of the Series A preferred stock and Series B preferred stock, we recognized a
non-cash dividend in the approximate amount of $36.6 million in the first
quarter of 2001.

  On March 30, 2001 the Company issued to a small group of accredited investors,
in a private placement, 1,885,996 shares of Series C preferred stock, at a
purchase price of $3.00 per share, for aggregate proceeds of approximately $5.7
million.

  On April 13, 2001 the Company issued to a small group of accredited investors,
in a private placement, 2,621,930 shares of its Series C preferred stock, at a
purchase price of $3.00 per share, for aggregate proceeds of approximately $7.9
million.

  Our use of the net proceeds from the offerings of our Series C preferred stock
to date and from future offerings of debt and equity securities and future
borrowings is limited by the provisions of the stock purchase agreement that we
entered into in connection with the January 12, 2001 offering.  Specifically,
the first $90 million in net proceeds are restricted to construction and
operation of our networks in the Augusta, Charleston, Columbus, Huntsville,
Montgomery and Panama City markets.

  The next $10 million in net proceeds can be used to construct and operate
Knology's networks in the first six markets as well as in the Knoxville and
Nashville markets. The next $35 million in net proceeds that we raise in future
offerings of debt or equity securities and future borrowings must be used to
construct and expand our networks in the first six markets. The next $10 million
of net proceeds must be used to construct and expand Knology's networks in the
first six markets as well as in the Knoxville market. Any additional net
proceeds can be used for any corporate purpose.

 The table below summarizes these uses:

--------------------------------------------------------------------------------
Use of Net Proceeds from
Series C Preferred Stock
Offerings and Future Offerings       Use of Proceeds
------------------------------       ---------------
$0-$90 million                       Augusta, Charleston, Columbus, Huntsville,
                                     Montgomery & Panama City markets
$90-$100 million                     Augusta, Charleston, Columbus, Huntsville,
                                     Montgomery, Panama City, Knoxville and
                                     Nashville markets
$100-$135 million                    Augusta, Charleston, Columbus, Huntsville,
                                     Montgomery and Panama City markets
$135-$150 million                    Augusta, Charleston, Columbus, Huntsville,
                                     Montgomery, Panama City and Knoxville
                                     markets
Over $150 million                    Any corporate purpose
--------------------------------------------------------------------------------

These restrictions on our use of proceeds from the Series C preferred stock
offerings and future offerings may be waived if approved by a majority of our
board of directors, including at least one director appointed by the holders of
our Series B preferred stock (if there are any then serving on our board).

FUTURE FUNDING

  Our business requires substantial investment to finance capital expenditures
and related expenses, to expand and upgrade our interactive broadband networks,
to fund subscriber equipment, to maintain the quality of our networks and to
finance the repayment, extinguishment or repurchase of our debt. We presently
expect that our current cash reserves (including the $107.1 million of funding
that we received from the sale of our Series C preferred stock through April
2001), cash flow from operations, and funding obtained through our existing
credit facility will be sufficient to fund our planned 2001 capital
expenditures. In 2001, we currently expect to use approximately $2.0 million to
fund operating losses and approximately $85.0 million for capital expenditures,
of which approximately $32.2 million relates to the construction of networks in
the markets where we currently provide service and the remainder primarily
relates to the purchase of equipment for customer premises, such as cable boxes,
and information systems.

  We have completed the construction of our networks in Montgomery, Alabama;
Columbus, Georgia and Panama City, Florida. We expect to complete the upgrade of
the Huntsville network to broadband capacity by the end of 2001.  We expect
that, with sufficient funds, the construction of our networks in our other
existing markets will be substantially completed during 2005. We will not have
sufficient funds to complete this construction without significant additional
financing. We expect to raise this capital through bank borrowings, private and
public debt offerings and private and public equity offerings, although there is
no assurance that this financing will be available on terms favorable to us.

                                      14
<PAGE>

  If we are not successful in raising additional capital, we may not be able to
complete the construction of our networks throughout these markets. This may
cause us to violate our franchise agreements, which could adversely affect us,
or may just limit our growth within these markets.  If we raise additional
financing, we plan to increase the amount we spend for capital expenditures in
2001.

  We have recently received franchises to build networks in Nashville, Tennessee
and Louisville, Kentucky, although our franchise in Louisville is currently
being contested by the incumbent cable provider. We have begun planning the
construction of our network in Nashville. We also plan to expand to additional
cities in the southeastern United States. We estimate the cost of constructing
networks and funding initial subscriber equipment in these new cities as well as
others at approximately $750 to $1,000 per home. The actual costs of each new
market may vary significantly from this range and will depend on the number of
miles of network to be constructed, the geographic and demographic
characteristics of the city, costs associated with the cable franchise in each
city, the number of subscribers in each city, the mix of services purchased, the
cost of subscriber equipment we pay for or finance and other factors. We will
need additional financing to complete this expansion, for new business
activities or in the event we decide to make acquisitions. The schedule for our
planned expansion will depend upon the availability of sufficient capital.
Definitive decisions on which cities will be chosen for expansion are not
expected to be made until this capital has been raised. If we are not successful
in raising additional capital, we will not be able to expand as planned.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

   We are exposed to market risk from changes in interest rates. We manage our
exposure to this market risk through our regular operating and financing
activities. Derivative instruments are not currently used and, if used, are
employed as risk management tools and not for trading purposes.

  We have no derivative financial instruments outstanding to hedge interest rate
risk. Our only borrowings subject to market conditions are our borrowings under
our credit facility which are based on either a prime or federal funds rate plus
applicable margin or LIBOR plus applicable margin. Any changes in these rates
would affect the rate at which we could borrow funds under our bank credit
facility. A hypothetical 10% increase in interest rates on our variable rate
bank debt for a duration of one year would increase interest expense by an
immaterial amount.

                          PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

  We are subject to litigation in the normal course of our business. However, in
our opinion, there is no legal proceeding pending against us which would have a
material adverse effect on our financial position, results of operations or
liquidity. We are also a party to regulatory proceedings affecting the relevant
segments of the communications industry generally.

ITEM 2. Changes in Securities and Use of Proceeds

  On January 12, 2001, the Company issued to certain existing investors and a
select group of new accredited investors, in a private placement, 31,166,667
shares of Series C preferred stock at a purchase price of $3.00 per share, for
aggregate proceeds of $93.5 million. In connection with the completion of this
private placement, the Company amended its amended and restated certificate of
incorporation to adjust the ratios at which the Series A preferred stock and
Series B preferred stock convert into common stock. Prior to the completion of
the January 12, 2001 private placement of Series C preferred stock, both the
shares of Series A preferred stock and shares of Series B preferred stock
converted into shares of common stock on a one-to-one basis. As amended, each
share of Series A preferred stock converts into 1.0371 shares of common stock
and each share of Series B preferred stock converts into 1.4865 shares of common
stock. With respect to the amendment of conversion ratios of the Series A
preferred stock and Series B preferred stock, the Company recognized a non-cash
dividend in January 2001 (Note 3). In addition, the amended and restated
certificate of incorporation was amended to change the trigger for the automatic
conversion of our Series A preferred stock and Series B preferred stock.
Previously, the shares of our Series A preferred stock and Series B preferred
stock would automatically convert into shares of common stock upon the
completion of a firm-commitment underwritten public offering in which (1) the
price per share is $6.00, (2) the gross proceeds to us are at least $50 million
and (3) the common stock sold in the offering is listed on the Nasdaq National
Market or on a national securities exchange.  As amended, our amended and
restated certificate of incorporation provides that the shares of our Series A
preferred stock and Series B preferred stock will automatically convert into
shares of common stock upon the completion of a firm-commitment underwritten
public offering in which (1) if the offering is completed in 2001, the price per
share is $4.00; if the offering is completed in 2002, the price per share is
$5.00; and if the offering is completed in 2003 or thereafter, the price per
share is $6.00, (2) the gross proceeds to us are at least $50 million and (3)
the common stock sold in the offering is listed on the Nasdaq National Market or
on a national securities exchange (a "Qualified Public Offering").

                                      15
<PAGE>

  On March 30, 2001 the Company issued to a small group of accredited investors,
in a private placement, 1,885,996 shares of Series C preferred stock, at a
purchase price of $3.00 per share, for aggregate proceeds of approximately $5.7
million. The shares of Series C preferred stock are convertible into shares of
our common stock at any time at the option of the holder and automatically upon
the completion of a Qualified Public Offering.  The shares of Series C preferred
stock are convertible into shares of common stock on a one-to-one basis.

  The issuance of securities described above was made in reliance on exemptions
from registration provided by Section 4(2) or Regulation D of the Securities
Act, as amended, as transactions by an issuer not involving any public offering.
The persons and entities exchanging securities in the transactions represented
their intention to acquire the securities for investment only and not with a
view to or for distribution in connection with such transactions, and
appropriate legends were affixed to the share certificates issued in such
transactions. All recipients had adequate access to information about the
Company, through their relationship with the Company or through information
about the Company made available to them.

ITEM 3. Default upon Senior Securities

 None

ITEM 4. Submission of Matters to a Vote of Security Holders

 In order to issue shares of Series C preferred stock, we obtained the approval
 of our stockholders, by written consent, to amend and restate its amended and
 restated certificate of incorporation to, among other things, designate the
 rights, preference and privileges of the Series C preferred stock and to
 authorize its issuance. The amended and restated certificate, as so amended,
 also modified certain rights of the holders of our Series A preferred stock,
 Series B preferred stock and common stock, including those modification
 described under Item 2 above.  The amended and restated certificate, which was
 previously filed as Exhibit 3.1 to the Company's Current Report on Form 8-K
 filed on January 26, 2001, is incorporated by reference herein.

 The amendment of the amended and restated certificate was approved on January
 12, 2001 by the holders of 43,926,409 shares out of 50,912,894 shares of our
 Series A preferred stock, the holders of 20,686,878 shares out of 21,180,131
 shares of our Series B preferred stock, and the holders of 64,603,287 shares
 out of 72,536,338 shares of our commons stock.

ITEM 5. Other Information

 None

ITEM 6. Exhibits and Reports on Form 8-K

 (A)  EXHIBITS

 Exhibit
   No.                       Exhibit Description

   3.1  Amended and Restated Certificate of Incorporation of Knology, Inc.
        (Incorporated herein by reference to Exhibit 3.1 to Knology Inc.'s
        Current Report on Form 8-K filed on January 26, 2001).

   3.2  Bylaws of Knology, Inc. (Incorporated herein by reference to Exhibit 3.2
        to Knology Inc. Registration Statement on Form S-1 (File No. 333-
        89179)).

   4.1  Specimen of Stock Certificate for Shares of Common Stock, par value
        $0.01 (Incorporated herein by reference to Exhibit 4.1 to Knology Inc.'s
        Registration Statement on Form S-1 (File No. 333-89179)).

   4.2  Specimen of Stock Certificate for Shares of Series A Preferred Stock,
        par value $0.01 (Incorporated herein by reference to Exhibit 4.2 to
        Knology Inc.'s Registration Statement on Form S-1 (File No. 333-89179)).

   4.3  Indenture dated as of October 22, 1997 between Knology Holdings, Inc.
        and United States Trust Company of New York, as Trustee, relating to the
        11 7/8% Senior Discount Notes Due 2007 of

                                      16
<PAGE>

        Knology Holdings, Inc. (Incorporated herein by reference to Exhibit 4.1
        to the Registration Statement of Knology Broadband, Inc. (formerly
        Knology Holdings, Inc.) on Form S-4 (File No. 333-43339)).

   4.4  Form of Senior Discount Note (contained in Exhibit 4.3).

   4.5  Form of Exchange Note (contained in Exhibit 4.3).

  10.1  Stockholders Agreement dated February 7, 2000 among Knology, Inc.,
        certain holders of the Series A preferred stock, the holders of Series B
        Preferred stock, certain management holders and certain additional
        stockholders (Incorporated herein by reference to Exhibit 10.84 to
        Knology, Inc.'s Post-Effective Amendment No. 2 to Form S-1 (File
        No. 333-89179)).

10.1.1  Amendment No. 1 to Stockholders Agreement, dated as of February 7, 2000,
        by and among Knology, Inc. and the other signatories thereto, dated as
        of January 12, 2001, by and among Knology, Inc. and the other
        signatories thereto (Incorporated herein by reference to Exhibit 10.2 to
        Knology, Inc.'s Current Report on Form 8-K filed on January 26, 2001).

  10.2  Joinder Agreement, dated as of January 12, 2001, by and among Knology,
        Inc. and the stockholders thereof who are signatories thereto
        (Incorporated herein by reference to Exhibit 10.3 to Knology, Inc.'s
        Current Report on Form 8-K filed January 26, 2001).

  10.3  Series C Preferred Stock Purchase Agreement, dated as of January 12,
        2001, by and among Knology, Inc. and each of those persons and entities
        whose names are set forth on Exhibit A thereto (Incorporated herein by
        reference to Exhibit 10.1 to Knology, Inc.'s Current Report on Form 8-K
        filed January 26, 2001).

  10.4  Credit Facility Agreement between First Union National Bank, First Union
        Capital Markets Corp. and Knology Holdings, Inc. dated December 22, 1998
        (Incorporated herein by reference to Exhibit 10.53 to Knology Broadband,
        Inc.'s Annual Report on Form 10-K for the year ended December 31, 1998).

10.4.1  First Amendment to Credit Facility Agreement, dated as of July 8, 1999.

10.4.2  Second Amendment to Credit Facility Agreement, dated as of November 24,
        1999.

10.4.3  Third Amendment to Credit Facility Agreement, dated as of March 31,
        2000.

10.4.4  Fourth Amendment to Credit Facility Agreement, dated as of September 30,
        2000.

10.4.5  Fifth Amendment to Credit Facility Agreement, dated as of March 31,
        2001.



  (B) REPORTS ON FORM 8-K

  On January 26, 2001, the Company filed on Form 8-K, a report announcing the
completion of a private placement of 31,166,667 shares of its Series C Preferred
Stock, at a price per share of $3.00, or an aggregate of $93.5 million.

  On April 2, 2001, the Company filed on Form 8-K, a report reflecting the
consent of Arthur Andersen, LLP to the incorporation, by reference in the
Company's Registration Statement on Form S-8, of their report dated February 13,
2001 for the year ended December 31, 2000, included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2000.

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<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

                                           KNOLOGY, Inc.

May 15, 2001                          By:  /s/ RODGER L. JOHNSON
                                           -------------------------------------
                                           President and Chief Executive Officer


                                           KNOLOGY, Inc.

May 15, 2001                          By:  /s/ ROBERT K. MILLS
                                           -------------------------------------
                                           Chief Financial Officer
                                           (Principal Financial Officer)

                                      18