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Last April, Google announced that it was bringing its Google Fiber broadband service to Austin, Texas. Google Fiber offers very high Internet speeds — up to 1 gigabit-per-second — at prices that are competitive with slower speeds offered by other broadband providers. Needless to say, Google’s announcement didn’t sit well with AT&T, and the company vowed to stand toe to toe with Google if local authorities granted it the same terms.

google-fiberIt appears those authorities have given the green light to AT&T, which announced today that it’ll be rolling out higher speeds to Austin residents — 300 megabits-per-second — by December, and will offer speeds up to 1 gigabit-per-second by the middle of 2014. That’s around the same time that Google Fiber is expected to launch in Austin, which means there could be two gigabit Internet providers battling it out by the middle of next year.

This is a great example of why competition is important, particularly in the home broadband market, where it’s been lacking. Companies like AT&T, Comcast, Time Warner, Verizon FiOS and others are often able to exist in markets where they don’t compete with each other, leaving consumers very little choice. Without that choice, these providers have no incentive to offer a better product. When another company enters its turf, though, a provider has no choice but to step up its game, and that’s what we’re seeing with AT&T here.

Google’s Gigabit Internet service along costs $70 per month. To compare, AT&T’s highest speed offering at 45 megabits-per-second costs $64.95 for the first year, after which AT&T tacks on $11.05 to the monthly price. It’s unclear at this time what AT&T will charge for its upgraded service when the higher speeds are implemented, but it seems reasonable to believe that AT&T’s price will be somewhat competitive with Google’s, and that could potentially bump down all of the other tiers in price. Again, competition is important.

We’ll be keeping an eye on this story for any new developments.


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