New £6 a year phone tax to pay for broadband expansion
The government is proposing a new tax on all phone lines to fund broadband expansion.
The New Generation Fund will be used to fund fibre optic expansion - bringing superfast broadband - at the cost of 50p a month for every fixed copper line.
The Digital Britain report claims the annual £6 tax will raise £150 million to £175 million a year.
The government has defended the tax, highlighting recent falls in telecom costs, but the Conservatives were quick to question how effective the levy will be.
The government is also pledging to bring forward the next generation of mobile internet.
Internet piracy was also taken on, with plans for serious repeat infringers to be identified so they can be targeted with court action.
Lord Carter - who wrote the report - stated: "If, as expected, the volume of digital content will increase 10x to 100x over the next three to five years then we are on the verge of a "big bang" in the communications industry that will provide the UK with enormous economic and industrial opportunities."
Liberal Democrat culture spokesperson Don Foster welcomed the push for the next generation of broadband, but warned rural areas may still be left out for a decade.
"The plans for rolling out next generation broadband are a step in the right direction but rural areas may face a wait of nearly a decade to see the benefits," he said.
"The idea of paying for it with a levy on fixed lines is broadly welcome. However, the Government must consider exemptions for pensioners and other less well off people."
The report also continues the pledge for a universal broadband service of 2 Megabits per second (Mb/s) by no later than 2012.
Research from uSwitch shows the standard advertised speed for broadband is 8Mb/s, yet the average speed received is 4.2Mb/s.
Figures from Ofcom show one per cent of the UK population want broadband but are unable to access network services of 512Kb and 15 per cent are unable to access a speed of more than 2Mb/s.
The Digital Britain report states the new generation of broadband through Virgin Media national cable network - already available to nearly half of homes - allows users "to send or receive 200 mp3 music files in five minutes, an entire Star Wars DVD in 3 minutes and the total digitised works of Charles Dickens in less than 10 minutes".
It is hoped the phone tax will subsidise firms to build fibre optic cables to areas where it would not make business sense to do so currently.
James Parker, manager of broadband at moneysupermarket.com, said: "The Digital Britain report has outlined a bandwidth floor of 2Mb/s. However, internet users are increasingly accessing bandwidth heavy services like streaming high quality video, and our research shows a significant majority already find 2Mb too slow for many of these services.
"Unfortunately for the 11 per cent currently unable to get 2Mb/s the Digital Britain report can only promise that service competition 'should be' available across the country. The government has clearly set out its commitment to the UK's Digital economy, but now its time for them to commit to the consumer and ensure everyone gets fair access and a fair deal."
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