The fourth largest city in Tennessee has installed a fiber optic network enabling speeds 200 times faster than the national average.
NEW YORK (TheStreet) -- To find the fastest Internet in the U.S., skip tech hot beds like Silicon Valley, Boston or New York.
Instead, look to Chattanooga, the fourth largest city in Tennessee, which has installed a fiber optic network enabling upload and download speeds of one-gigabyte-per second, or 200 times faster than the national average.
Chattanooga is the first city to make this type of Internet speed available to all 150,000 of its residents covering 600 square miles -- even ahead of Kansas City, Kan., which Google(:GOOG) selected this summer to become the recipient of its gigabit network.
But as Chattanooga's local government and business leaders soon realized, having a superfast Internet connection was one thing -- figuring out how to take advantage of it was another.
More than a year after the network was installed by Chattanooga's community-owned electric utility EPB with the help of a $111 million federal stimulus grant, only a handful of users have signed up. Still fewer have figured out the best ways to utilize the city's gigabit network.
"We've traveled all over the country trying to figure out the next killer app but there's no clear cut path," said Jack Studer, a partner at Chattanooga-based start-up incubator Lamp Post Group. "There's the obvious answer, to stream higher quality videos, but that's incremental and doesn't get you so far."
Last week, the city announced a nationwide call for students and entrepreneurs to spend their summer in Chattanooga developing applications and future uses for its Internet connection. Established business teams will be offered up to $15,000 in investment capital to jumpstart their idea with the best plans winning a cash prize of $10,000. Students, meanwhile, can take home $50,000.
The competition is part of a plan to boost economic development in Chattanooga, a former industrial city that is looking to reinvent itself in the wake of lost manufacturing jobs. Some 2,000 new jobs will come from Volkswagen, which in September opened a $1 billion plant in the city, though local leaders are hopeful their new broadband network will also provide a significant boost.
"To build a kind of playground for companies to do things they haven't done before is to create a situation that invites the launching of new ventures, new users and new jobs," said J. Ed Marston, vice president of marketing and communications for Chattanooga's Chamber of Commerce.
What to do with a Gig?
Chattanooga's super-fast Internet has a variety of potential applications, including telemedicine (think connecting top surgeons to rural patients via videoconferencing), manufacturing and cloud computing.
"When we first got broadband, people said, 'why do you need that?," said Lamp Post's Studer. "But we really have the opportunity to push the frontier and come up with what's next."
Chattanooga's plan is also part of a larger push from the government to increase broadband speeds in the U.S, which reports say are significantly slower than those of other countries, including South Korea.
In his State of the Union address in January, President Obama focused heavily on connecting more Americans to superfast Internet services. Within the next five years, "we will make it possible for business to deploy the next generation of high-speed wireless coverage to 98 percent of all Americans," Obama said.
Investment in wireless technology is also believed to contribute to overall economic development, according to Lawrence Summers, former director of the White House National Economic Council, who believes every dollar invested in wireless deployment contributes $7 to $10 dollars to GDP.
"It's a virtuous circle," said Debbie Goldman, an economist at the Communications Workers of America. "As one has more capacity, this then stimulates the development of new services and new applications."
The Future is Chattanooga
Chattanooga is hopeful the competition will draw brilliant minds from all over the world to southern Tennessee.
In a promotional video, the city calls on people to tag their "geekiest friends" on Facebook and Twitter, who will then be referred to the Chattanooga Chamber of Commerce as potential applicants.
"There's a test bed here that doesn't exist anywhere else in the U.S," said Harold DePriest, president & CEO of EPB. "If there are companies or individuals out there are interested in products for the future, well the future is here in Chattanooga."
--Written by Olivia Oran in New York.
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