Google Fiber devices

Internet giant hopes to spur ultra-fast broadband, but analysts skeptical

Google, as part of its campaign to crank up broadband speeds across the U.S., aims to start connecting Austinites by mid-2014 to an all-fiber network that will provide super-fast Internet and TV.

Austin, Tex., is the second market for Google Fiber, after the company began connecting customers in Kansas City, Mo., and Kansas City, Kan., late last year.

“We believe the Internet’s next chapter will be built on gigabit speeds, and we hope this new Google Fiber city will inspire communities across America to think about what ultrafast connectivity could mean for them,” Google Fiber veep Milo Medin said in a blog post Tuesday.

But some analysts question whether Google’s fiber plans will have any broader effect on the business and regulatory environment for high-speed Internet. “We remain skeptical that Google will find a scalable and economically feasible model to extend its buildout to a large portion of the U.S., as costs would be substantial, regulatory and competitive barriers material,” Sanford Bernstein senior analyst Carlos Kirjner wrote in a research note last week.

Meanwhile, shortly after Google’s announcement, AT&T said it would also build an advanced fiber-optic network in Austin, capable of delivering speeds up to 1 gigabit per second. “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,” the telco said.

The City of Austin did not provide Google with any special incentives to bring Google Fiber to the city, according to a spokeswoman.

Google is still working out pricing details for Austin, “but we expect them to be roughly similar to Kansas City,” Medin said. In KC, Google Fiber offers TV and 1-gigabit broadband for $120 per month, with standalone Internet at $70 monthly.

When Google was selecting which community it would bless with fiber first in 2010, “Austin had one of the most enthusiastic responses,” company said on its website. Google will be focused within the Austin city limits for the fiber build.

Google announced plan at an event Tuesday with Austin Mayor Lee Leffingwell and other local officials.

Medin called Austin, home of the SXSW fest, “a mecca for creativity and entrepreneurialism, with thriving artistic and tech communities, as well as the University of Texas and its new medical research hospital.” He added, “We’re sure these folks will do amazing things with gigabit access, and we feel very privileged to have been welcomed to their community.”

Internet company will compete with incumbent providers Time Warner Cable and AT&T, which it’s also challenging in Kansas City.

Google Fiber will ‘support Austin’s ‘quality of place’ and will be a great resource for our students, entrepreneurs and businesses,” Austin Chamber of Commerce president Michael Rollins said in a statement. “It will provide a catalyst in our efforts to increase mobility, identify solutions for congestion and accelerate smart grid initiatives.”

As in the KC region, Google expects to offer free Internet connection at 5 Mbps for seven years to consumers who pay a one-time connection fee. Company also plans to hook up public institutions in Austin, including schools, hospitals and community centers, for no charge.

Google posted video on its YouTube site with execs and Austin locals touting the fiber project:

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