Expanding broadband usage throughout the United States will require subsidies and investment in infrastructure upgrades of as much as $350 billion, a regulatory panel said on Tuesday.
The U.S. Federal Communications Commission is crafting a national broadband plan aimed at increasing usage in rural and urban areas. The report is due to be submitted to Congress in mid-February.
In a mid-course status report, an FCC task force said preliminary estimates indicate that investments in the range of $20 billion to $350 billion may be needed, depending on the speed of service.
The panel said the majority of Americans have Internet service at home, one-third have access to broadband but have not subscribed, and another 4 percent have no access.
However, those who have broadband are receiving slower speeds than what is being advertised, said the panel, which estimated that actual speeds lag by as much as 50 to 80 percent.
The panel also said broadband usage is increasingly used on mobile devices and putting a strain on networks, driving a need among carriers for more spectrum to meet consumer demand.
Big wireless providers such as AT&T Inc, Verizon Wireless, Sprint Nextel Corp and T-Mobile are seeking more spectrum as they roll out more sophisticated bandwidth-hogging smartphones such as Apple Inc's popular iPhone.
T-Mobile is a unit of Deutsche Telekom AG. Verizon Wireless is a joint venture between Verizon Communications Inc and Vodafone Group Plc.
The FCC panel said sales of smartphones are expected to surpass standard phones by 2001.
(Reporting by John Poirier, editing by Matthew Lewis)