Consultation launched on broadband spending plans

The Government launched a consultation today on how its proposed £1 billion investment in super-fast broadband to create a "world class communications network" should be spent.

The Digital Britain Report, published in June, set out plans for a Next Generation Fund, raised through a landline duty of 50p per month on fixed lines as a "fair and sensible national investment".

The Government's proposed £6-a-year levy - dubbed a "broadband tax" - would apply to all fixed lines.

More than 1.7 million households are thought to have more than one phone line.

The levy would be used to help people living in more remote rural areas have access to next generation broadband.

The plans would bankroll the UK's digital infrastructure to bring super-fast broadband to 90 per cent of the country.

The Government said estimates suggest that private investment will only reach up to 70 per cent of the population by 2017.

Business Secretary Lord Mandelson said: "This investment is about bringing the future of broadband to areas of the country that would otherwise miss out.

"We cannot underestimate the opportunities this will bring for homes and businesses which is why we are taking action to make sure everyone benefits.

"Already the market is delivering super-fast internet speeds of 50Mbps (megabits per second) to half the country but we cannot be certain that it will reach the communities that are not currently served, which is why we are putting in an extra £1 billion to support the market.

"By upgrading our networks we will put the UK at the fore of rapidly developing technologies which will bring jobs, boost business potential and grow our digital economy."

The plans have come under fire from several quarters.

Charles Dunstone, chief executive of broadband provider TalkTalk, has previously described the proposed levy as "unjust and regressive".

He has called for the private sector to be allowed to "drive next-generation broadband as far as it can".

The Government has also pledged to ensure every community has access to 2Mbps broadband connection by 2012 - in time for the Olympic Games.