The government could use £200m left over from a fund to pay for the switch from analogue to digital TV broadcasting to help pay for the roll-out of universal broadband.
Communications minister Stephen Carter has already announced his intention to provide every household in the UK with a 2Mbps internet connection by 2012. A further announcement is expected with the publication of the Digital Britain report.
The cost of doing so varies from £5.1bn to £27bn, depending on technology, according to figures from the Broadband Stakeholders Group, a supplier-dominated lobby group.
BT has already said it will commit £1.2bn to installing fibre to the kerb if the government guarantees its return on investment. This would give about 40% of households access to internet downloads at 40Mbps. Virgin Media, which is rolling out a 50Mbps service and testing a 200Mbps upgrade to its cable TV-based network within the reach of about half of UK households, recently attracted £1bn in new funding.
Many other small network operators are installing fibre networks that could bring 100Mbps upload and download speeds to customers' premises. These include Geo, Industria and several metropolitan and regional development agencies.
But the main cost, which network operators want funding or guarantees for, is to cover non-urban residential areas.
An unconfirmed report in the Financial Times says that the £200m would come from a £503m fund set aside to help the elderly and vulnerable pay for digital access to broadcasts. However, this cost was overestimated by £250m, the report said, leaving cash available to subvent the national broadband roll-out.