Why is network utilization so low

There are several possible bottlenecks for network transfer:

• For anything over the internet, your internet connection will most probably be the bottleneck. Your internet connection is likely to be anywhere between some 100kb/s up to 100 Mb/s (latest fibre connection).
• The router can be a bottleneck, although you will only notice this for transfers over the local networks. Router is usually 1000 or 100 Mb/s.
• Then there is the actual throughput of your network interface, i.e. your network adapter. This will be either 100/1000 Mb/s for Ethernet, or 54Mb/s for wireless.

Now, what the windows network manager displays to you is the usage of the possible bandwidth of the local network adapter.
As you can see from the above numbers, this is normally a tiny amount of the total available bandwidth of your adapter for transfers over the internet. If you would try to locally copy a file over the LAN, it will most likely use a very big portion (maybe 100%) of the bandwidth of your network adapter.

Lets say you use only the internet for example, which is 1mbps (in our example). Let's assume your wireless adaptor supports N. Then it is 300mbps at best (windows displays it 300mbps). So 1mbps from 300mbps at best transfer rate.

Basically that's the reason. (You can't increase it. If you get a faster internet connection, it'll increase itself. You can check out the maximum output by copying something through lan to a PC which is connected with 1gbps LAN cable to the router (if the router supports 1gbps))