The U.S. is lagging behind Europe and Asia in broadband availability, and American small businesses, particularly Internet startups, are at a critical disadvantage, according to speakers who addressed a hearing on Capitol Hill on Wednesday.

The hearing, chaired by Senator John Kerry (D-Massachusetts), is part of a congressional effort to find out if national legislation or U.S. Federal Communications Commission action is needed to spur the spread of affordable broadband across the country.

First to address the panel were the two Democratic commissioners of the U.S. Federal Communications Commission, Michael Copps and Jonathan Adelstein.

“Many small businesses in America cannot get a broadband connection at all and when they can they are paying too much for service that is too slow,” said Commissioner Copps.

A number of surveys have ranked the U.S. anywhere from 15^th to 24^th in the world in terms of broadband penetration and the speed of the available service, and that has rankled the U.S. government.

U.S. small businesses spend $25 billion a year on telecom services, and for many small startups such as those involved in software as a service, broadband is the reason they are in business, Commissioner Adelstein said.

“These businesses are integrating new telecom services into their business plans…it is their sole means of distribution to their customers,” he said.   

One of the problems the FCC faces is of its own making. The Commission classified broadband as an information service and not subject to the vast array of regulation that has made voice universally available.

“In countries like Japan they have broadband regulation and that has resulted in greater availability, faster speeds, and lower prices” said Commissioner Copps. “Competition has not made broadband universal in the U.S., unfortunately.”

The FCC would need some kind of action from the Senate to reclassify broadband as a telecommunications service that is subject to broad regulation.

A number of industry sources have lobbied the government for a national broadband policy that makes broadband universal and opens up unused radio spectrum for development through auction.