Internet boom and a 'digital divide'

Twenty years ago, telephones were used for talking to people, television meant the four terrestrial channels plus satellite if you could afford it, the internet was still in its infancy and copying music involved a quaint article known as an audio cassette.

In 2009, the world is very different: the chances are the lump in your pocket is not just a phone, but also a video camera, personal music player, and address book.

The internet is a vital part of everyday life - providing everything from news to shopping to music to videos - and is likely to become even more important in the years to come.

The Prime Minister said the digital network would be as important in the 21st century as roads and railways were in the 20th.

But there are concerns that a "digital divide", where some households are left without fast internet access, will emerge, and effectively cut off part of the population from full participation in society.

Research by the Post Office, a broadband provider, suggested that households that were not online could be missing out on savings of up to £840 a year on goods and services.

The Digital Britain report is the Government's plan to try to bridge the digital divide and ensure that everyone in the UK is able to enjoy the benefits offered by digital technology.

Replacing the universal service obligation - the requirement for BT to provide every home in the UK with a phone line - with a universal broadband obligation is one way of addressing this.

But in practical terms it would mean major investment in infrastructure: the cabling needed to connect every house in the UK, no matter how remote and isolated.

Today's report also hopes to resolve the growing problem of online music and film piracy.

People copying and sharing music over the internet costs the industry millions of pounds every year.

The Government is keen to avoid using legislation to address the problem, favouring a system of self-regulation instead.

The report is also the blueprint for the future of public service broadcasting (PSB).

Public service content - particularly local news and children's programming - is under pressure as advertising revenues fall and broadcasters struggle with increasing competition from cable channels.

But they are still felt to be important, and broadcasting regulator Ofcom has called for a strong public service channel to be created to compete with the BBC.

Last week Ofcom called for Channel 4 to merge with another broadcaster - Five or the BBC's commercial arm BBC Worldwide - to create this.

Channel 4 faced a bleak future unless such a merger went ahead, Ofcom warned.