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The Broadband Stakeholder Group, a government and industry think tank, recommended tax relief in its latest proposals to the Department of Trade and Industry (DTI).
David Harrington, director general of the CMA, told CW360.com that while tax relief would speed the rollout of broadband, the current economic climate made tax breaks unlikely.
"Cash is the key to the problem," said Harrington. "Tax credit for suppliers and tax relief to consumers would be very welcome. However, the Treasury will decide on this and it will have to take the view that short-term pain is worth it for long-term gain, and I am not sure it will do so."
Harrington said the aftermath of the 11 September terror attacks on the US had not helped the cause.
"With the war in Afghanistan, this is not a good time to be going to the Treasury and asking for tax breaks," he said. "The move would have to be fiscally neutral or profitable for this to even be considered."
The DTI and e-envoy Andrew Pinder will consider the recommendations of the Broadband Stakeholder Group and issue a response in November.