Three groups, the Consumer Federation of America, Consumers Union (responsible for Consumer Reports magazine), and media policy group Free Press, have released a joint report (PDF) called "Broadband Reality Check II." A follow up to a similar report issued last, the year, the picture it paints of the broadband landscape in the United States is not a flattering one.

Divided into sections covering broadband penetration, speed and price, market structure, new technologies, the digital divide, FCC metrics, and policy recommendations, the report touches on just about every aspect of the US broadband market, mostly in a very critical fashion.

Looking at the statistics contained in the report, we discover that the US is 16th in the world in terms of broadband penetration and 15th in rate of growth. As of December 2005, the US had approximately 16 broadband subscribers for every 100 inhabitants. In contrast, Iceland had almost 27, while South Korea, the Netherlands, and Denmark were right around 25 per 100.

US residents lag in speed as well, but pay more for their slower connections. In Japan, symmetrical 100Mbps connections are available for less than $35 per month, while residents of South Korea can get similarly speedy fiber optic connections for around $32. Those speeds are unheard of for consumer broadband in the US, and prices for much slower hookups are significantly higherComcast charges $69 for 10Mbps/768Kbps service where I live, by way of example.

The litany of bad news about US broadband goes on, with the report highlighting the lack of competition in the US market. "Consumers across the nation have relatively little choice in broadband services. The top two cable companies and the top two DSL companies together controlled over half of the entire U.S. broadband market," according to the report. The conclusion? "The U.S. broadband market is essentially a series of regional duopolies. The largest non-incumbent provider is Sprint, accounting for less than 2 percent of the entire market."

Is the situation as dire as the report claims? While some US consumers are seeing the benefit of high-speed fiber deployments in limited areas served by Verizon and AT&T, most folks are faced with just one or two relatively slow and expensive (compared to other developed nations) choices. At least there's hope on the horizon from the likes of WiMAX, BPL (broadband over power lines), satellite, and other upcoming technologies, right?

Not really. Market share for technologies other than DSL and cable have actually declined in recent years, although that may change in years to come as WiMAX becomes more commonplace. Even then, breaking into the duopolies present in most markets will be difficult in the years ahead, especially with 15 states having laws on the books that bar municipalities from creating broadband networks of their own.

There are a handful of policy recommendations in the report that are worth taking a look at. One of the most logical is to allow local governments to get into the broadband business. That would require repealing the state laws current barring such activities or the passage of federal legislationand the most recent massive telecommunications bill that appears to be dead in the water would have done just that. Actions such as the FCC's recent decision to open up some analog TV spectrum to unlicensed devices are another step in the right direction.

Lurking in the background of the topic are the steps taken by the US government to deregulate broadband over the past several years. Those steps include classifying cable Internet as an information service, which means cable ISPs don't have to lease their lines, and telling DSL providers they don't need to share either. If the FCC had decided to mandate line sharing, not only for cable and DSL, but for new fiber deployments, consumers would arguably have a lot more choice in broadband providers, and the more competitive market would likely result in better service and faster connections. Instead, Americans are stuck with high prices, limited choice, and lower speeds.