Charter Communications’ hold on the Decatur-area broadband market faces a new challenge.

Knology Inc. will acquire the assets of Private Cable Co. LLC, known as PCL Cable, for $7.5 million cash.

Athens-based PCL, a major provider in Athens and the sole cable competitor of Charter Communications in Decatur, provides video, voice and data services to residential and business customers in both cities.

The broadband market, which includes an expanding array of services, is dynamic in the Decatur area. Bankrupt Charter previously competed solely with PCL, whose footprint was largely inside Beltline Road and therefore unavailable to many resident- ial consumers.

AT&T is poised to introduce U-Verse, a service similar to its cable competitors.

“We don’t have any immediate plans to announce for U-Verse in Decatur,” said AT&T spokeswoman Sue Sperry, despite a recent Decatur City Council resolution giving AT&T franchise rights.

West Point, Ga.-based Knology announced a definitive agreement to purchase PCL in its third-quarter earnings report, released Friday.

The company said it expects to close the deal by the end of 2009.

City to benefit?

Decatur City Councilman Gary Hammon said he expects the acquisition to benefit Decatur residents.

“PCL hasn’t put any money into Decatur in the last five years,” Hammon said. “There are a lot of places in the city where you have Charter cable or no cable. I think competition sharpens the sword.”

PCL’s operations are contiguous to Knology’s existing operation in Huntsville. PCL Cable generates about $5 million in annual- ized revenue.

Last week, the city of Decatur approved a five-year franchise agreement with PCL. City Attorney Herman Marks did not immediately return calls Monday.

Knology Vice President of Communications Tony Palermo said Knology’s purchase was contingent on approval from franchising authorities in Decatur.

He said a Knology shareholder vote was not a precondition to the acquisition.

Palermo said it was premature to predict whether the company would expand PCL’s limited footprint in Decatur.

“It’s pretty early on,” Palermo said. “Coming out of the chute, we’re looking at bringing the (existing) PCL footprint into our fold.”

He said Knology already has optical fiber running to PCL, which provides data services.

“Within a relatively short period of time, we’ll be able to bring up products and services to the level of what we’re offering in Huntsville,” Palermo said, to businesses and residents already within PCL’s footprint.

He said the acquisition gives Knology the ability to increase its revenue with investments already made in Huntsville.

“The first step for us is to get the deal done,” Palermo said. “The second step is to transition over to our network and our method and our ways of doing business. That will include checking on the integrity of the distribution network.”

Only after that, Palermo said, will Knology look at expansion in Decatur.

“We will not go in immediately and do any kind of construction work,” he said.

Knology has served the Huntsville area since 1998. Its footprint includes the city of Madison and Madison County. Knology is the exclusive cable provider for Redstone Arsenal.

The company offers bundled services ranging from $50 to $100 per month in its Huntsville market, with options including Internet, up to 200 channels of digital cable, digital phone service and video on demand.

Knology serves 12 markets, 10 in the Southeast and two in the upper Midwest.Knology began as The Interstate and Valley Telephone Co., founded in 1896. Knology was initially formed in 1994 by telecommunications holding company ITC Holding Co. Inc. and in 1999, merged with Interstate and Valley Telephone Co.

Knology became a publicly traded company in December 2003.

The company made its first-ever quarterly profit in the third-quarter of 2007.

“We’re very excited about it,” said Palermo. “It’s a very good tuck-in strategy for us. It gives us the ability to leverage all of the assets and all of the expertise we have in the Huntsville market.”

Is Palermo worried about competition from Charter?

“Anytime there is good strong competition,” Palermo said, “that always results in goodness for the consumer.”