The U.S. once again fails the FCC’s broadband progress report

Despite Google’s (s goog) fiber to the home network in Kansas City and the spread of cable’s 100 Mbps speeds, the U.S. is failing to deploy broadband in a reasonable and timely fashion, according to the Federal Communications Commission. The declaration that the nation’s Internet service providers aren’t meeting the needs of the public for the third year in a row would be a pretty big statement, if the agency hadn’t stood back while the Department of Justice approved a spectrum sale and marketing agreements that will further reduce the state of broadband competition.

In its eighth annual broadband report the FCC notes that 19 million Americans live in places where there’s no broadband access delivered at speeds above 3Mbps. And of those 19 million people, 4.5 million don’t live in rural locations where it can be expensive to install the physical infrastructure necessary to offer broadband. That’s the equivalent of a city larger than Los Angeles not having broadband, and speaks to an accessibility problem which can be laid at the feet of ISPs reluctant to deploy networks in poor and rural areas.

But there’s a larger problem — and it’s one that Silicon Valley should pay attention to. Of those who could get broadband speeds above 3 Mbps only 40 percent do so. That means many of the people reading this blog are in the broadband minority in both their current access and their desire for faster speeds.

Given that broadband access and faster speeds are not just a gateway to entertainment in the form of Netflix or social networking like Facebook, but also the underpinning of much innovation, the idea that so many residents are content to amble along the web is a business problem for Silicon Valley and a political problem for those concerned about America’s role in the global economy.

I’m not sure why those Americans are content with their DSL lines or low-end cable subscriptions, but the simplest is that they don’t agree that faster speeds are worth the higher cost of broadband. To goose the demand side, we need better applications designed for faster networks, but we also need to see prices drop and ISPs to stop doing things such as implementing broadband caps. Netflix for example, is the type of service that might entice users to upgrade their connections, but they won’t if the cost is super high and there’s a chance they might end up getting charged an overage fee.

Thus millions of Americans are content with slower connections, caps and basic apps, while those of us in the tech world wonder why the heck more people aren’t complaining about data caps and a lack of fiber to the home. Maybe that’s the digital divide we should tackle first.

Post image courtesy of Flickr user Hans Gerwitz.