The group, which advises ministers on issues surrounding the technology, said only 12% of UK homes have broadband. Fast internet access is seen as crucial to the development of e-commerce and content services.
Antony Walker, chief executive of the Broadband Stakeholder Group, said there had been a "slippage" in meeting government targets. "We really need to set new milestones beyond 2005 as we only see this date as the end of the beginning, and before we see the introduction of higher-level services," he said.
The group called on the government to improve regulatory processes, provide structural funds for neglected geographic areas, take advantage of wireless broadband technologies and promote the broadband content industry.