Britain aims to provide universal broadband access by 2012, it said Tuesday, as it outlined its vision for a digital future that will require the BBC to share its funding.
Communications Minister Stephen Carter said some 200 million pounds of direct funding would be spent to extend coverage to the 15 percent of homes which do not currently receive broadband at 2 Megabits per second.
The majority of the 200 million pounds will come from money that was given to the world-renowned and publicly funded BBC.
The government also plans to impose a levy of 50 pence on all copper phone lines which could raise between 150 million pounds to 175 million pounds to introduce faster broadband to areas of the country where it would not be commercially viable for private investment.
The BBC receives a 3.6 billion pound ($6 billion) license fee -- a tax on every television-owning household -- and within that a sum has been ring-fenced to help elderly people move from analog to digital television.
However, some of that money has not been spent and the Carter report said the surplus could be used for broadband coverage and to also support regional news on commercial broadcasters.
The report said the industry would work to provide Internet access to the whole country at around 2 megabits per second (Mb), through a mixture of fixed and wireless connections, by 2012.
BT Group is expected to take a leading role in the broadband expansion through a range of existing technologies and has said giving any extra spectrum to mobile operators would be an unjustified subsidy.
Digital Britain is about giving the country the tools to succeed and lead the way in the economy of the future, Prime Minister Gordon Brown said in a statement.
Investing in areas such as broadband access for every home and business and the move from analog to digital technology will bring benefits across the board, driving growth, enabling businesses to thrive, and providing new opportunities and choices for households right across the country.
The proposals were one of many plans outlined in the keenly awaited Digital Britain report, which also outlined a range of proposals to help broadcasters that have been hammered by the advertising downturn and the move to digital TV.
Carter's report said it would support a commercial partnership between the niche broadcaster Channel 4, which is publicly owned but funded by advertising, and BBC Worldwide, the commercial arm of the BBC.
Channel 4 welcomed the report.
The BBC's surplus money could also go to companies willing to provide regional news for commercial broadcasters such as ITV , which have said they can no longer afford to make it.
The report said money from the BBC surplus could go to pilot schemes on regional news between now and 2012 and, if successful, the idea could be confirmed when the BBC renegotiates its next license fee settlement in 2013.
Carter began preparing his report last year to examine how the country can boost the digital and communications industries, but with the recession firmly rooted in Britain there was little public money to invest.
On the subject of Internet piracy, the report said it would support sending warning letters to those making illegal downloads of content such as music and films.
For repeat offenders, the body could also slow their Internet connections, but the report backed away from an earlier suggestion that would block Internet access.
(Writing by Kate Holton; Editing by Paul Hoskins, Will Waterman and Simon Jessop)