Google announced Tuesday that its experimental superfast Internet service will spread to Austin, the Texas home of a South By Southwest festival beloved by technology trendsetters.

Google Fiber should start connecting its so-called gigabit Internet to homes in Austin, the Texas state capital and a hotbed for Internet entrepreneurs, by the middle of next year, said vice president of access services Milo Medin.

"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," Medin said of Austin.

"We're sure these folks will do amazing things with gigabit access."

The announcement was greeted immediately with a challenge from telecom giant AT&T, which said it would offer a similar service if it gets the same access as Google.

Google Fiber debuted in Kansas City and in November began providing users there with Internet service that moves data at a blazing gigabyte per second, about 100 times faster than the speed provided by typical broadband connections.

"When the startup community hears about Google Fiber coming to Austin there may be celebration in the streets," said Eugene Sepulveda, chief executive of the Entrepreneurs Foundation in that city.

Google said pricing details for the service were being worked out but were expected to be on par with those in Kansas City, where gigabyte-speed service is available for a monthly fee of $70.

Slower Google Fiber connection to the Internet is made available free, after a one-time "construction fee" of $300.

Consumers also will have an option to pay $120 monthly for superfast Internet combined with Google TV service that syncs with notebooks, smartphones or tablets powered by Android software backed by the California technology titan.

Google will hook schools, hospitals, community centers and other public facilities to Fiber for free, according to Medin.

"I don't think, probably, any Austinite can tell you what Google Fiber will mean to Austin a year from now, and that is really the cool part," Texas state Senator Kirk Watson said in a video posted at Google's blog.

"We are ready to see what it will do," he continued. "And I promise you it is going to be fun by the end."

Aspiring tech tycoons, their potential financiers, plus indie film-makers and musicians of all generations and genres flock by the thousands to Austin each year for a pop culture jamboree known as SXSW.

AT&T responded to the challenge from Google by announcing that it is prepared to build an advanced fiber optic network in Austin, provided it gets the same terms from local officials.

"Most encouraging is the recognition by government officials that policies which eliminate unnecessary regulation, lower costs and speed infrastructure deployment, can be a meaningful catalyst to additional investment in advanced networks which drives employment and economic growth," AT&T chief executive Randall Stephenson said in a release.

AT&T said it would match Google if it received "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."