The government has backed a plan to introduce a universal broadband network service running at two megabits per...
second by 2012.
It will also revise the powers of the communications industry regulator Ofcom to ensure it can strike the balance between supporting competition and encouraging investment.
The decisions were announced in the Budget speech on Wednesday.
They pre-empt communications minister Stephen Carter's final report on Digital Britain, expected in late May, which is looking at ways and means to introduce high-speed next-generation networks.
The government plans to use money unspent by the BBC to convert to digital broadcast technology. The National Audit Office believes this amounts to £250m.
A detailed plan for the roll-out will be published in the final Digital Britain report.
The move will bring Britain into line with European Commission moves to mandate a universal broadband service in every member state
Business secretary Peter Mandelson said transformational technologies like broadband had to be "genuinely available" to nearly all. "We need government action to ensure UK firms have the capacity to compete for the economic opportunities it brings."
Communications minister Stephen Carter said the 2mbps universal service was "a baseline for both next-generation networks and for the next-generation delivery of public services."
The government also gave the go-ahead for Yorkshire Forward, a regional development agency, to spend a £100m on a next-generation broadband network in South Yorkshire.