It is likely true that they don't currently have any competition. But Google Fiber is making some inroads, and perhaps they realize that if they don't make any improvements and don't do anything, they are making it easier for disruptive players to enter the market (in whatever form that may take).
Additionally, with the increase of higher bandwidth usage like 4k Netflix as was mentioned or whatever it happens to be, they potentially realized that they were going to have to do something to increase capacity in their backend network if they want to maintain service. People live with traffic volume caps now but as demand for higher caps increases there are going to be more and more complaints, again, opening the field for disruption. Thus they have to beef up their backbone network (my terminology is probably weak as I don't have much knowledge of how ISP networks are constructed and how peering arrangements and such work). You can't really sell an improved backbone network to customers, but if you couple that with last mile upgrades, which are probably going to have to happen eventually anyway, you can drive interest as you prepare for the future.
People are generally willing to pay a little bit more for a service that just works most of the time and is as fast as the other guy. Upgrading their network means that disruptive players have to prove themselves based on something other than speed.