AT&T's "GigaPower" all-fiber network has launched in parts of Austin, Texas, with a price of $70 per month for download speeds of 300Mbps (which will be upgraded to a gigabit at no extra cost in 2014).

The $70 price is only available if you agree to see targeted ads from AT&T and its partners, however. Interestingly, AT&T labels the Internet service with targeted ads as its "premier" service while calling the service without targeted ads "standard."

Not only is the price of the premier service (with ads) only $70 a month, but it comes with a waiver of equipment, installation, and activation fees. The standard service without ads is $99 a month, and there's no mention of a waiver in AT&T's announcement. "The waiver is part of the Premier package, so is not available with the standard service at this time," AT&T told Ars.

U-Verse TV adds $50 to the monthly bill regardless of which package you choose.

A footnote in the announcement notes that the lower premier price "is available with your agreement to participate in AT&T Internet Preferences. AT&T may use your Web browsing information, like the search terms you enter and the Web pages you visit, to provide you relevant offers and ads tailored to your interests."

GigaOm asked AT&T if it plans to use deep packet inspection to deliver the ads. AT&T's response was as follows:

We use various methods to collect web browsing information, and we are currently reviewing the methods we may use for the Internet Preferences program. Whichever method is used, we will not collect information from secure (https) or otherwise encrypted sites, such as online banking or when a credit card is used to buy something online on a secure site. And we won’t sell your personal information to anyone, for any reason. ... We won’t sell your personal information. Rather, AT&T may use your personal information to direct another advertiser’s ad to you, but that advertiser would never have access to your Personal Information. For example, after you browse hotels in Miami, you may be offered discounts for rental cars, but that rental company doesn’t know who you are.

AT&T said users won't necessarily see more ads, "but those you do see may be more suited to your interests," because it knows what search terms you're entering and what webpages you visit.

The targeted ads are simply part of AT&T's "latest innovation," the company also said. "We are trying something different here," AT&T told Ars. "Consumers are used to the concept of a mobile app or an e-reader being priced differently with or without certain ads, or a free email service that stays free by serving ads. We want to give Austinites a similar choice with our latest innovation, U-verse with GigaPower."

We asked where the ads will be displayed during browser usage, but haven't gotten an answer yet.

AT&T's fiber deployment in Austin comes after Google's announcement that it would bring gigabit fiber to the city. Google has said its network will come to Austin by mid-2014, so AT&T has beaten it to the punch.

The initial GigaPower rollout in Austin comes to the French Place, Mueller, Zilker, and Onion Creek neighborhoods and will expand beyond that in 2014. "Expansion plans will, in part, be influenced by the number of Austinites voting for their neighborhood at www.att.com/gigapower," AT&T said.

In Kansas City, Google Fiber pricing is $70 per month for gigabit Internet and $120 per month for gigabit Internet plus TV. The price is the same as AT&T's with-ads service, but Google doesn't differentiate Internet pricing based on any ad preference. Google is already delivering targeted ads on its own websites, of course, but those are for all users rather than just its Internet subscribers.