Earlier this year, Google (NASDAQ:GOOGL) added Austin, Texas, to its list of Google Fiber cities, and the gigabit Internet service is slated for a mid-2014 launch. Hours after the announcement, AT&T (NYSE:T) confirmed its intentions to follow suit if it could procure similar incentives. Ma Bell has now done that and is launching its gigabit service in December.
AT&T's new GigaPower service will beat Google Fiber to market, but pricing remains the biggest unknown. Google also hasn't announced Fiber pricing in the Live Music Capital of the World, but Big G prices very aggressively in Kansas City, so chances are it will do likewise in Austin. AT&T has now had to spend on capital expenditures yet has no pricing power if Google plans to undercut.
In other markets, Verizon (NYSE:VZ) has shown a disregard for Google's threat, since it launched a new service tier in its FiOS network that offered half the speed for four times the cost. The key difference is that Google Fiber is not available in those markets, so Verizon doesn't have to worry quite yet.
In in this segment from today's episode of Tech Teardown, Erin Kennedy discusses AT&T's new network with Evan Niu, CFA.
Erin Kennedy has no position in any stocks mentioned. Evan Niu, CFA, owns shares of Verizon Communications. The Motley Fool recommends Google. The Motley Fool owns shares of Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.