Around 30,000 users are switching to broadband every week with 1.4 million - one in 10 homes in the UK - now connected to high-speed services, the regulator said.
Research published by Oftel shows that awareness is at an all time high, with 84% of UK internet customers knowledgeable about broadband and what it can do.
This compares to just 50% at the same time last year.
Rising fast
The research also found that nine out of 10 households were satisfied with the service provided by their ISP (Internet Service Provider).
"
It is an ambitious plan but it is workable
"
David Priest, Freebb
People are also spending more time online, with the average household on the net for up to nine hours per week.
"One in 10 homes with internet access now use broadband and this figure is rising fast as people become more aware of the benefits that broadband can bring," said David Edmonds, Director General of Oftel.
"As well as the move towards high-speed broadband services consumers also benefit from good deals on unmetered dial-up access," he said.
The new-found popularity of broadband has triggered a glut of cut-price ISPs offering cheap services which consumers need to be careful about, according to experts.
Too good to be true?
The latest of these -Freebb - is the first to offer a completely free broadband service, in a move reminiscent of earlier free dial-up services, most of which floundered.
"
It sounds completely like pie in the sky and people should probably stay away from it,
"
Dan Stevenson, Jupiter
The firm remains confident that it can make sufficient money from advertising and commission fees although it refuses to name the firms it has currently signed up.
People will need to agree to spend a certain amount of money with these companies or face being removed from the service.
Freebb will not go live until it has signed up 250,000 users, said Marketing Manager David Priest.
"It is an ambitious plan but it is workable," he said.
Dan Stevenson, analyst with research firm Jupiter expressed scepticism about the firm's plans.
"It sounds completely like pie in the sky and people should probably stay away from it," he said.
"I don't see how they could possibly survive when traditional charging ISPs are struggling to make money."