In the global race to see who can offer the fastest Internet service, an unlikely challenger has emerged: Chattanooga, Tenn.

The city-owned utility, EPB, plans to announce on Monday that by the end of this year it will offer ultra-high-speed Internet service of up to one gigabit a second. That is 200 times faster than the average broadband speed in America.

Only Hong Kong and a few other cities in the world offer such lightning-fast service, and analysts say Chattanooga will be the first in the United States to do so. “This makes Chattanooga — a midsized city in the South — one of the leading cities in the world in its digital capabilities,” said Ron Littlefield, the city’s mayor.

There is one caveat: the highest-speed service will cost $350 a month, a price that may appeal to some businesses but few households, even though the service will be offered to all the 170,000 homes and businesses EPB serves.

“We don’t know how to price a gig,” said Harold DePriest, chief executive of EPB. “We’re experimenting. We’ll learn.”

Chattanooga’s effort is the byproduct of an aggressive high-tech economic development plan in recent years, helped along by funds from the federal economic stimulus program. But it comes at a time of increasing debate among communities, countries and corporations about how best to pursue the next generation of broadband, a technology seen as the gateway to a new wave of Internet-based products and services.

The Obama administration presented its broadband strategy earlier this year and set the goal of bringing broadband to 100 million American homes at download speeds of at least 100 megabits a second — a tenth of Chattanooga’s top speed — by 2020. The United States, according to studies, is a laggard among developed nations in broadband adoption and service speeds.

Eric E. Schmidt, Google’s chief executive, and other leaders in technology and government point to the trailing broadband performance as a danger to American competitiveness that threatens to saddle the nation with an “innovation deficit” compared with other countries.

To help close the gap, Google pledged this year to supply service at one gigabit a second to up to 500,000 people in the United States. The company says that 1,100 communities have applied, and Google will make its selection — one community, or a few — this year.

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