Baroness Vadera has been confirmed as Mr Timms' replacement in the post of communications minister and the Department for Business, Enterprise & Regulatory Reform will make a formal announcement later today.
Stephen Timms had been in talks with ISPs in November about how to improve broadband access in the UK.
Gareth Thomas, minister for trade and development, said that the biggest challenge for the government remained encouraging investment from the private sector to build fast broadband networks.
"There is no obvious business case for private sector to invest in networks," he said.
Thomas said renewing the telecoms infrastructure in the UK was a priority and that he had seen positive signs from companies that they were willing to talk about ways they could make investments, rather than have the government intervene with potentially "disruptive" effects to the broadband market.
Read John-Paul Kamath's live blog on the cabinet reshuffle.