By Alexei Oreskovic and Sinead Carew
SAN FRANCISCO/NEW YORK, April 9 Google Inc
said on Tuesday it plans to bring its ultra high-speed
Internet and television service to Austin, Texas, next year,
prompting AT&T Inc to reveal its own plans to follow suit
- if it gets the same terms from local authorities.
AT&T appeared to be making a political point to highlight
the heavy regulations that encumber traditional phone companies,
Google promised to begin connecting homes in Austin by the
middle of 2014 with a 1-gigabit-per-second Internet service,
roughly 13 times faster than the speediest service AT&T had
previously committed to offering and about three times faster
than the zippiest available from Verizon Communications.
The Austin launch would be Google's first move to expand its
"Google Fiber" service beyond Kansas City, Missouri, introduced
last year. Google says the Fiber Internet service is 100 times
faster than today's average broadband performance.
But as Google unveiled its plans at an event in Austin that
featured Texas Governor Rick Perry, Austin's mayor and other
city officials, AT&T issued a challenge to the city to provide a
more level playing field.
"AT&T's expanded fiber plans in Austin anticipate it will be
granted the same terms and conditions as Google on issues such
as geographic scope of offerings, rights of way, permitting,
state licenses and any investment incentives," AT&T said in a
The No.2 U.S. telecommunications firm did not provide a time
frame for its own planned Gigabit network, which it said would
not materially alter its anticipated 2013 capital expenditures.
"AT&T is making the point that they could make a lot more
investments in many of their communities, absent the regulatory
burdens which every community puts on providers," said Raymond
James analyst Frank Louthan.
While Louthan said he did not know what the terms of
Google's Austin deal were, he pointed out that Google received
various benefits in Kansas City, including preferential
right-of-way access, access to data centers, and reduced pole
"This immediately puts the city of Austin in a box," said
Louthan. "They realize that if they actually give that to AT&T
and build it, Google may not come."
Austin City spokesman Doug Matthews said there was no
"special incentives" for Google. "The negotiated agreement we
had with Google, by state law we're obligated to provide to
anybody else who wants to offer the same service," Matthews
"If AT&T is interested in providing a similar service we're
happy to talk to them about that," Matthews said. He noted that
Google was committed to connect up to 100 public facilities
under the terms of the agreement.
Google, the world's No. 1 Internet search engine, launched
its first Google Fiber service in Kansas City in November. The
company initially billed the service as a test project to spur
development of new Web services and technology but now says it
views Google Fiber as a viable business.
The ultra high-speed connections and television offerings
are aimed at surpassing those of current providers, such as
cable and telecommunications companies, such as AT&T and Time
Warner Cable Inc.
As in Kansas City, consumers in Austin will be able to get
standalone Gigabit Internet service or a bundle that includes
nearly 200 high-definition television channels. Pricing in
Austin is still to be determined, Google said.
Google said it will also offer Austin residents free
Internet service, at a slower 5 megabit per second rate for
seven years, provided they pay a one-time construction fee that
was not specified. In Kansas City, the fee is $300.
The city's authorities, as opposed to federal regulators,
hold the oversight power over the terms and conditions for
AT&T's and Google's projects.
Federal Communications Commission Chairman Julius
Genachowski has been a big proponent of growing high-speed
internet access across the country and on Tuesday, FCC
Commissioner Jessica Rosenworcel welcomed the news from Austin.
"Every effort we can make to make sure we have the highest
speeds available is a good one," Rosenworcel said on the
sidelines of the National Association of Broadcasters trade show
in Las Vegas. "I think it is such an important economic
imperative that we need to fire on all fronts at once."
Google shares finished Tuesday up $2.80, or less than 1
percent, at $777.65. Shares of AT&T closed the session up 14
cents, or less than 1 percent, at $37.76.