chattanooga speedHow do you get a startup to move to Chattanooga, Tennessee? You could try, I guess, selling young companies on the glorious aesthetic benefits of the “Scenic City,” population 170,000. You could point out that it’s within striking distance of the lovely Huntsville, Alabama, hometown of Wikipedia founder Jimmy Wales. Or you could lure them in with the hearty promise of Southern cooking.

If you’re the one-year-old accelerator Gig Tank, on the other hand, you might just point to the city’s 1 Gigabit-per-second fiber optic Internet connection and say, “Hey, show me what you can do with this.”

Chattanooga’s Gig Tank is what one might call a boutique accelerator. It accepts just 10 startups and entrepreneurs, invests tens of thousands of dollars each in return for equity, and gives them access to corporate partners – including Alcatel-Lucent, Mozilla, US Ignite, and Cisco – to help bring theirs products to life and to market. Aside from the money and the corporate hookups, though, it’s the super-fast Internet that the little-known Gig Tank is attempting to build its reputation on.

There’s been a lot of talk about Google’s Fiber project in Kansas City, in which the search giant has deployed cheap 1 Gps connections (or close enough) to some parts of the city. But Chattanooga has been enjoying that privilege since 2010, when its publicly owned electric power system, the EPB, invested in and rolled out a network that subscribers could tap into in order to get Internet speeds at 200 times the national average.

Last year, Gig Tank opened its doors to its first intake, based on the question “What do you do with a Gig?” The winner of the accelerator’s end-of-program competition was a company called Banyan, which provides a cloud-based system for collaborative real-time research. Banyan has raised funding from investors in Tennessee and Silicon Valley. (Update: A previous version of this story said it had raised $3 million, but that’s not so. Banyan is yet to announce its funding.) It also picked up $100,000 for winning the competition and is relocating permanently to Chattanooga from Florida.

This year, the accelerator runs from May to August (applications are already open) and will focus on the question of what kinds of businesses can be built when you have this ubiquitous high-speed infrastructure. Gig Tank’s founder Sheldon Grizzle says the accelerator will be looking for applications related to the “Internet of Things,” which could apply to home, retail, healthcare, media, among other sectors.

One of the quirks of Gig Tank is that it also considers startups that want to come in and build a business around existing ideas that have been partially developed by companies that, for whatever reason, have decided to take the products to market. Such prototypes on offer include Fan Cam, which lets sports fans live-stream a game from wherever they happen to be sitting in a sports arena, and Next Gen TV, which explores ways to offer interactive television in real time.

Investment firms Solidus Capital, from Nashville, and the Chattanooga Renaissance Fund help front up the capital for investments, which start at $10,000 but can reach as high as $110,000, and the corporate partners also offer some grants in the range of $10,000 to $20,000 to help specific companies build prototypes of their products. As an added perk, Gig Tank has also partnered with a local university to offer free, fully furnished housing for participating companies.

Of course, if you’ve been reading PandoDaily closely, you’ll know that joining an accelerator isn’t always a great idea, as Erin Griffith pointed out recently. And one should always be careful before upping sticks to live in what verges on a rural backwater. It just so happens, however, that this particular backwater is living in the future. Jimmy Wales would approve.

[Image courtesy xtremecamera]