CORRECTED - UPDATE 1-US broadband expansion may cost $350 bln

(Fixes year in last paragraph)

* Actual speeds lag advertised speeds by 50 pct-80 pct

* As much as $350 bln in investments may be needed

* Smartphone sales to overtake standard phones by 2011

WASHINGTON, Sept 29 (Reuters) - Expanding broadband usage
throughout the United States will require subsidies and
investment in infrastructure upgrades of as much as $350
billion, a regulatory panel said on Tuesday.

The U.S. Federal Communications Commission is crafting a
national broadband plan aimed at increasing usage in rural and
urban areas. The report is due to be submitted to Congress in
mid-February.

In a mid-course status report, an FCC task force said
preliminary estimates indicate that investments in the range of
$20 billion to $350 billion may be needed, depending on the
speed of service.

The panel said the majority of Americans have Internet
service at home, one-third have access to broadband but have
not subscribed, and another 4 percent have no access.

However, those who have broadband are receiving slower
speeds than what is being advertised, said the panel, which
estimated that actual speeds lag by as much as 50 to 80
percent.

The panel also said broadband usage is increasingly used on
mobile devices and putting a strain on networks, driving a need
among carriers for more spectrum to meet consumer demand.

Big wireless providers such as AT&T Inc (T.N), Verizon
Wireless, Sprint Nextel Corp (S.N) and T-Mobile are seeking
more spectrum as they roll out more sophisticated
bandwidth-hogging smartphones such as Apple Inc's (AAPL.O)
popular iPhone.

T-Mobile is a unit of Deutsche Telekom AG (DTEGn.DE).
Verizon Wireless is a joint venture between Verizon
Communications Inc (VZ.N) and Vodafone Group Plc (VOD.L).

The FCC panel said sales of smartphones are expected to
surpass standard phones by 2011.
(Reporting by John Poirier, editing by Matthew Lewis and Carol
Bishopric)