Is U.S. stuck in Internet's slow lane?

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In 2004, President Bush called for nationwide broadband access by 2007, to be nurtured by an absence of taxation and little regulation. The U.S. is very close to Bush's goal, thanks to the availability of satellite broadband across the lower 48 states.

But the Internet by satellite is expensive and slow. Nearly everyone may have access to the Internet, but that doesn't mean they're plugging in.

Part of the problem may be that people don't see fast Internet access as an essential part of modern life, and may need more of a push to get on. The U.S. does have wider income disparities than many of the countries that are outdoing it in broadband, and people in poverty may have other priorities for their money.

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Dan Correa, research analyst at the Information Technology and Innovation Foundation, believes the U.S. needs a more "proactive" broadband policy, and compares the lack of government involvement in the field with the situation in other utilities, which are mostly heavily regulated.

"In the 1930s, we recognized that electricity was essential. We're not quite at that level in broadband," Correa said.

An FCC chairman appointed by a Democratic president in 2009 may agree. Current Democratic Commissioner Michael J. Copps has said broadband availability could be encouraged with tax incentives and loans to rural utilities.

The United States doesn't look set to catch up to South Korea or even Canada (with 65 percent of households connected to broadband, according to Point-Topic) by then, because broadband adoption is slowing down after an initial growth spurt.

In the last few weeks, the U.S.'s three largest Internet service providers reported adding 1.2 million subscribers in the third quarter, down from 1.54 million in the same quarter last year, according to a tally by UBS analyst John Hodulik.

But the U.S. does have a few aces up its sleeve. Apart from satellite broadband it has widespread cable networks, which provide an alternative to DSL. Cable has some technical advantages over phone lines, and a new cable modem technology called Docsis 3.0 could allow U.S. Internet speeds to leapfrog those in countries dominated by DSL in a few years.

On the phone side, the country's second largest telecommunications company, Verizon Communications Inc., is spending $23 billion to connect homes directly with super-fast fiber optics.

"Twenty percent of the U.S. is getting a decent network," Burstein acknowledges. The new network can match or outdo the 100 megabits per second Internet service widely available in Japan and Korea, but Verizon isn't yet selling service at that speed.

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AP Business Writer Dibya Sarkar contributed to this report from Washington, D.C.

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