UPDATE, 2:38 PM: AT&T says today that it, too, “is prepared to build” a speedy 1 gigabit per second broadband system in Austin. It expects the city to grant “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 investment shouldn’t have a big impact on AT&T’s capital expenditures this year, it says.

PREVIOUS, 12:59 PM: Google seems to like challenging Time Warner Cable. The companies already face off in Kansas City, where Google built its first super-fast fiber optic broadband and TV network. And today the search giant confirmed that in mid-2014 it will begin to enlist customers in a second Google Fiber market: Austin, where Time Warner Cable is the dominant TV provider. “It’s 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,” Google says in a blog post. Time Warner Cable, for its part, says that “We already provide fiber-based multi-gig speed for many commercial customers throughout our service areas, and for consumers, we offer several tiers of residential service designed to fit almost any budget or household need. We’re prepared for added competition and believe that any innovation in broadband technology is good for all of us.”

Still, the news — which began to leak on Friday — appears to have contributed to a 2.3% drop in Time Warner Cable shares so far this week. The cable operator has about 45.4% of the area’s pay TV customers followed by DirecTV with 17.3%, Dish Network with 16%, and AT&T U-verse with 13.1%. ISI Media’s Vijay Jayant says he’s “not terribly concerned” for the cable company. The market only accounts for about 2.2% of its 12M video subscribers. Google Fiber is still “more of an experiment than a competitive threat,” he says — adding that the company may be picking on Time Warner Cable to prevent other cable operators from “paying too much attention to their rollout.” But BTIG’s Rich Greenfield says that “as Google works out the kinks, it now appears set for faster growth.” Although he says that he doesn’t know the underlying economics of the venture, Google Fiber “appears to hold tremendous long-term value creation potential for Google.” For example, it could use viewer data to target commercials “with a far lighter ad load, so you would not even think about skipping commercials.”

flattop
1 year
Google Fiber will never come to Killeen or Harker Heights
Ronnie Ferguson
1 year
I stay approximately 60 mile North of Austin, TX. I have been waiting for fiber optic to...
justin bailey
1 year
As a Time Warner Cable customer for years here in Austin I can honestly say that Time...