Bloomberg News

Google Fiber in Austin Challenges AT&T-Led Web Providers

April 09, 2013

Google Fiber in Austin to Challenge AT&T-Led Web Providers

Boxes of equipment needed to install Google Fiber broadband network. Photographer: Julie Denesha/Bloomberg

Google Inc. (GOOG) will roll out a high- speed Internet access service in Austin, Texas, that is more than 100 times faster than some broadband services, posing a challenge to access providers.

Google will begin its first customer installations for a network that includes Internet access and television channels in mid-2014, Milo Medin, vice president of Google Fiber, said at an event today in Austin. The Texas capital follows Kansas City, Kansas, which won a deal in 2011.

While Google benefits from consumers spending more time online, the expansion into Web access will compete with cable and telecommunications providers such as AT&T Inc. (T) and Time Warner Cable Inc. (TWC) that have built vast networks to deliver Internet services to homes across the country. Google has also introduced Wi-Fi in New York’s Chelsea neighborhood and its hometown of Mountain View, California.

“We’re here because speed matters,” Medin said at the event, attended by Texas Governor Rick Perry. “Speed is the foundation of future innovation on the Web.”

Following Google’s announcement, AT&T said it’s preparing to build a rival fiber network in Austin capable of delivering speeds similar to Google’s planned service. Time Warner Cable said it welcomes the competition and has a network across central Texas.

AT&T Chief Executive Officer Randall Stephenson said in a statement that government “policies which eliminate unnecessary regulation, lower costs and speed infrastructure deployment” would boost more investment in advanced networks.

Technology Hub

Austin, with a population of about 820,000, is near the corporate headquarters of Dell Inc. (DELL), the third-largest personal- computer maker. Bolstering the city’s growing role as a technology hub, Austin hosts the South by Southwest Interactive Festival, an annual event that attracts entrepreneurs, venture capitalists and executives from Silicon Valley companies such as Google and Facebook Inc. HomeAway Inc. (AWAY), an online vacation- rental service, and Bazaarvoice Inc. (BV), a brand-awareness software maker, are funded locally by investment firm Austin Ventures.

As it did in Kansas City, Google said it will target areas with high demand for the Fiber service. Google will be seeking feedback in specific neighborhoods to measure interest, the company said on its website.

While pricing hasn’t been set, Google Fiber will be similar to Kansas City, where the search provider charges $70 a month for a high-speed connection and $120 a month for Internet and television service, Medin said. A basic broadband service will be offered for free, after a $300 connection fee, Medin said.

Perry compared Google Fiber’s impact to Texas Instruments Inc. (TXN:US)’s development of computer technology and the Johnson Space Center near Houston.

“This is a really big deal,” Perry said. “This vastly increases the odds that the next great thing -- the next Google -- will be born in the Lone Star State.”

To contact the reporters on this story: David Mildenberg in Austin at dmildenberg@bloomberg.net; Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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