Steady growth in broadband revenue has helped cable operators offset a stagnant pay-TV market in recent years. But now, the industry is resisting pressure from local governments, businesses and universities to offer ultrafast Internet service, opening the door to new competitors.

Google Inc. and a host of smaller companies working in partnership with cities like Seattle and Urbana, Ill., are building fiber-optic networks that offer speeds of a gigabit per second. That's more than three times as fast as the maximum speeds...