An investigation has found that customers are paying for an average of 12 megabits per second while actually receiving 7 Mbps, a gap of 42%.
More than 3,000 readers participated in a survey by the Guardian newspaper to test online broadband speed test over a period of three days. It found widespread differences between the speeds promised and those delivered.
Readers complained of broadband black spots in city centres, of exposed copper lines that fail in bad weather and of having to move businesses out of homes because of poor connections.
The survey found that TalkTalk and Sky customers reported a 60% shortfall, the widest gap between median advertised and actual services.
TalkTalk subscribers had been promised an average speed of 8 Mbps, but were receiving 5 Mbps, and Sky customers were promised an average 12 Mbps and received 4.8 Mbps.
Virgin customers reported a 41% shortfall – they were promised 30 Mbps but received 17.7 Mbps. BT's customers fared best, paying for 8 Mbps and receiving a quarter less at 6 Mbps. The gap was 27% for BT's budget service, Plusnet.
Hugh Colvin, an arts organiser who lives on the Welsh border and rents two telephone lines so that more than one member of his family can use the internet at a time, said: "If you were buying a dozen apples and you got three, you wouldn't put up with it.
"It's outrageous that I pay the same as somebody who is in the middle of London getting 10 times the speed."
David Combe, a civil servant who lives in Basingstoke and shares his BT line with his partner and two children, said: "If anyone wants to watch iPlayer there is no point a second person going online. It's like sharing a bathroom."
Since advertising rules changed in April, internet service providers can only claim "up to" speeds if at least 10% of users are receiving them.
Even this threshold was criticised as too low by the broadband companies who are now moving away from blanket advertising to quoting a different speed for each customer.
TalkTalk says its advertisements refer to average speeds, and everyone is given an individual quote before signing up. A spokesman said: "No one enters a contract with us without receiving a speed estimate tailored to them."
BT said it removed speed claims from its website on 1 April. "We have provided personalised speed quotes for some years now, so our customers know exactly what they're getting before any commitment is made."
A spokesman for Sky said the company emphasised unlimited download allowances rather than headline speeds.
He said: "Since Sky Broadband continues to be the UK's fastest growing ISP, all the evidence points to customers responding very positively to the service we offer."
A Virgin Media spokesperson said: "Virgin Media has long argued for greater clarity in broadband advertising and, while the changes in April were long overdue yet welcome, we've seen ISPs continue to hide behind generic terms or catch-all claims.
"We are committed to continuing to lead this industry which is why we only advertise speeds that our customers can reasonably expect to actually receive.
"Ofcom's independent and comprehensive research consistently shows we deliver what we say, with our 30Mb service actually providing almost 31Mb on average.
"That's not to say we are complacent. We continue to deliver the UK's fastest widely available broadband and we're in the process of boosting speeds for customers with our doubling upgrade and the introduction of 120Mb."
Ofcom describes proper broadband as 2 Mbps or over, and this is the minimum bandwidth needed for video services such as the BBC's iPlayer.
The speed tests found 18% of respondents were receiving 2 Mbps or less, with many saying their service was often slower.
BT, whose copper network is used by every major telecoms retailer in the UK, is spending £2.5bn to upgrade the service by installing fibre optic cables from the exchange to street cabinets.
It aims to reach two-thirds of the UK by the end of 2014 and, with taxpayer help, 90% of homes by 2017.
Customers with fibre optic cables to their street cabinet could get speeds of up to 76 Mbps, but experts say the service could still be unreliable for properties furthest away from telephone exchanges, because they rely on copper wiring for the final mile.
BT has countered this by including smaller market towns in its roll-out plans, and a competition allowed 10 harder-to-reach communities to win fibre for their exchange.
Customers will be able to order an all-fibre line from BT from next year, although the initial price could be as high as £1,000, putting it out of reach of most householders and home-based workers.
Ian Livingston, BT Group chief executive, said: "The UK will be a leader by comparison with other western European economies.
"We'll be giving fibre to within 400 meters of the average home. If people really want and need faster speeds, we can provide it."
Labour says the government must update the national broadband plan, with an emphasis on more fibre connections direct to homes, businesses, schools and health centres.
The shadow minister for innovation and science, Chi Onwurah, a former head of telecoms technology at Ofcom, said:"Ultimately fibre to the home is the aim.
"By 2020, we should have concrete plans in place. I do think that it is a failure of leadership that the government isn't prepared to do that."
The communications minister, Ed Vaizey, has said the UK is on track to have the "best broadband network in Europe" by 2015.
