CNet headlines a Leichtman Research Group report, Broadband growth plummets in Q2:

Cable operators and phone companies signed up about half the number of subscribers in the second quarter of 2008 that they signed up during the same quarter in 2007.

Phone companies are hardest hit. Om Malik says its easily explained:

Cable companies added phone service and offered triple-play service, stealing voice customers from the phone companies. Phone companies are responding to the triple-play threat by rolling out their own video networks, but it is early days and really slow going.

Malik says they should lower prices. Leichtman might agree. They say the telcos are pushing expensive higher speed services when their market wants traditional DSL.

It’s a tough market. With broadband use nearing saturation — 90 percent of Internet users already have it — there’s a smaller pool of prospects.

In its story on the report, Wired’s Epicenter emphasizes that U.S. broadband speeds are too darn slow:

Meanwhile, super-high-speed services still aren’t widely available (or affordable), according to the Communications Workers of America. The trade group says the average U.S. internet speed was 2.3-megabits per second, up just .4 mbps from last year. Japan, by contrast, boasts average net speeds of roughly 63-mbps range.

Of course, the CWA has an agenda — the group is pushing a piece of legislation called the Broadband Data Improvement Act, which would basically funnel government money into the hands of broadband providers, or in the words of the CWA, the legislation would create a “$40 million five-year matching grant program for organizations engaged in efforts to identify barriers to broadband adoption in their state.”

Indeed CWA’s new nationwide report finds little improvement in U.S. Internet speeds. With data from nearly 230,000 Internet users they break speeds in each state down to the zip code level:

[T]he average U.S. Internet speed was 2.3 megabits per second (mbps), representing a minimal gain of 0.4 mbps over last year’s average speed. At this rate, it will take us more than a hundred years to catch up to Japan, where average speeds are estimated at 63 mbps.

South Korea gets 49 mbps; France 17 mbps. The U.S. is ranked 15th among industrial nations in home broadband subscription.

CWA sees the Broadband Data Improvement Act as an important first step. It will improve the nation’s broadband data collection and provide funding to states for public-private partnerships to increase broadband deployment and adoption.