[Rolling eyes] AT&T's feeble bluff on Google Fiber.

Yesterday, AT&T announced that they were going to bring fiber optic 1 gigabit connections to homes in Austin Texas, the same day that Google officially announced that they were bringing Google Fiber to Austin.  Considering how the rumors were circulating the internet for over a week, it's not entirely shocking that AT&T pulled this stunt.

In their announcement, AT&T remarked that they expected to get the same terms as Google did, and would also bring a free-level internet service to Austin residents.

They can't be serious
AT&T's profit (in this market segment) is based on ISP and add-on services such as TV and phone.  Google's profit is based on ad clicks.  Yes, Google Fiber would rely on the same sort of income as AT&T's fiber network, but again, those clicks add to Google's bottom line, which AT&T does not have.

AT&T's leap into this market race (at least in public relations rhetoric) seems like an attempt to protect its Texas turf, but Google could lower prices below that of AT&T's tolerance level.  Again, it's those ad clicks, and to improve those click opportunities, Google's Fiber TV comes with a free Nexus 7 as a remote control.  You just know that customers will use their Nexus 7 to do a lot of things other than just as a glorified TV remote control.

Finally, ask Verizon why they haven't continued their build-out of FiOS: "Wall Street punished us for investing in FIOS."

It's quite simple: If you're trying to earn a living off the income from that traffic on your pipes, you can't offer it for free without getting punished by Wall Street; if you earn your income on the transactions in that traffic (ad clicks, Wallet, etc), you can offer it for free, and Wall Street will be happy.

Google wins.