For example, Cisco Systems and Juniper Networks dominate service-provider core routers, with worldwide market shares of 53 percent and 31 percent in the first quarter of this year, according to Dell'Oro Group. Cable set-top boxes also come predominantly from two U.S. vendors, Motorola and Cisco.

However, the DSL (digital subscriber line) equipment industry is largely owned by Alcatel-Lucent, the Paris-based company that resulted from the troubled merger of Alcatel and U.S.-based Lucent Technologies in 2006. Alcatel-Lucent, Fujitsu and the Canadian Nortel Networks were the three main sellers of optical network equipment in North America in the first quarter, according to Dell'Oro. Nokia Siemens Networks, a joint venture of Finland's Nokia and Germany's Siemens, is another major player in carrier infrastructure.

"Things today are not black and white in the communications business," said Frank Dzubeck, a longtime telecommunications analyst at Communications Network Architects, based in Washington. "You can't build these things today without a significant participation from globalized vendors."

The "buy American" part of the stimulus bill reflected Washington lawmakers' lack of understanding of broadband and the Internet, he said.

"They build bridges, they build roads, they understand that stuff. They don't understand that the next generation of this country needs broadband to go to work," Dzubeck said.