High-speed Internet providers are expected to get a subtle rebuke from U.S. regulators this week when a report omits language that has previously said they are rolling out broadband to all areas in a reasonable and timely fashion.

According to a source familiar with the contents of the Federal Communications Commission report, it will be the first time the phrase has been omitted since the report was first issued in 1999.

In March the FCC issued a broadband blueprint seeking to boost Internet speeds and deploy broadband services to all Americans including the 14 million to 24 million Americans currently without high-speed access.

The conclusion is going to be for the first time the FCC will find that broadband deployment is not timely and reasonable, the source said.

The 2010 report is saying we are no longer on the right track, the source said.

The source, who declined to be identified because the report has not been made public, said the deployment report could be issued as early as Tuesday and does not make specific policy recommendations.

Telecoms industry officials disagree with the report's conclusion, but a senior FCC official said the report is not meant to be critical of the carriers.

Congress requires the FCC to assess whether broadband has been reasonably and timely deployed to every American -- no matter where they live, said the official who declined to be identified.

The broadband report, mandated by Congress, is similar to a tougher line taken in a May report on the wireless industry, in which the FCC for the first time since 2002 failed to describe the wireless industry as having effective competition.

It is likely to fuel criticism from public interest groups that competition is lacking in the broadband industry.

Until now, the Federal Communications Commission (FCC) has issued reports finding the state of broadband was acceptable, said Gigi Sohn, who heads Public Knowledge, a public interest group.

The report on the state of broadband deployment could advance the agenda of the broadband plan, that includes a recommendation to refocus the U.S. telephone subsidy program, called the universal service fund, to subsidize broadband.

Carriers have resisted deploying broadband technology to some rural areas due to the cost of investing.

USTelecom, a trade group for broadband providers, disagreed with the pending report, saying the United States is in the middle of a broadband explosion.

USTelecom President Walter McCormick said it was appropriate for the commission to be concerned about the remaining small percentage of Americans who may not yet have access to wired broadband.

However, it is inconsistent with the commission's own data to conclude that deployment is not progressing in a timely and reasonable manner, McCormick said in a statement.

Qwest Communications International Inc said there were some remote areas where broadband was not available because of the high cost of deployment but it had applied for federal stimulus funds to bring broadband to many of these primarily rural communities.

(Reporting by John Poirier; Editing by Tim Dobbyn)

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