Austin did, in fact, campaign to be Fiber's debut host, a distinction that went to Kansas City in the end. Austin is also a very high tech city, not only thanks to its citizens, but companies like Samsung, AMD, Intel, and others all have offices there. Then there's the South by Southwest festival that takes place every year.
On top of all this, we already know that Google Fiber is expanding. Google has made their intentions to expand beyond Kansas City very clear. Last month Google announced that the service is coming to Olathe, Kansas, and it just makes sense to bring the service to Austin.
via The Verge