As they race to upgrade their crumbling infrastructure for broadband, big cities are facing an unexpected source of competition for startups -- rural America.

Verizon is rewiring New York City block by block at the cost of $3 billion, the New York Times reports. San Francisco, meanwhile, is considering installing fiber-optic lines in its sewers, according to Om Malik on GigaOm, though he's not sanguine about the city's political abilities to get big projects done. By contrast, the Seattle Times reports on how the tiny burg of Winthrop, Wash. -- population 351 -- already has blindingly fast broadband, which is enabling startups like HomeMovie.com to set up shop far away from any big cities. It's a trend Business 2.0 first noted two years ago: Cheap broadband and even cheaper real estate are allowing entrepreneurs to set up shop just about anywhere they can connect to the Internet.

That makes New York and San Francisco's fiber upgrade projects even more urgent. Sure, the cities will always have their charms, especially for those who like nightlife. But in the all-work-and-no-play life of a person starting a company, he'll be at the office when others are out on the town anyway. So why not set up shop where there's nothing to do but log on?

What do you think? Will big cities keep their edge for attracting entrepreneurs?