Decisions loom on rural broadband

The consultation will decide who gets the cash for broadband

The UK government wants advice on how to spend the cash being raised for next generation broadband in rural areas.

The cash will be generated by imposing a 50p duty on all fixed line phones.

It has begun a consultation exercise that will hear about who should benefit from the £1bn it is expecting to raise in the Next Generation Fund.

Without the fund, the government fears rural areas will be left behind as the rest of the UK moves to use much higher speed broadband.

Plans for the Next Generation Fund were unveiled in the Digital Britain white paper released early in 2009.

In Digital Britain the government pledged that all areas of the UK would get 2mbps (megabits per second) broadband by 2012.

Research suggests that the fund will be needed to bankroll the building of high-speed networks to ensure they reach 90% of the UK.

If the network upgrades are left to the private sector, only 70% of the nation will get access to the higher speeds.

"Already the market is delivering superfast internet speeds of 50Mbps to half the country but we cannot be certain that it will reach the communities that are not currently served," said Business Secretary Lord Mandelson in a statement unveiling the consultation.

By rolling out the higher speed networks, the government hopes to boost the take-up of telemedicine, home working and cloud computing.

UK telecommunications firms have been informed about the consultation and now have 12 weeks to respond.

A government team will oversee the roll-out to rural areas once decisions about who gets it have been made.

The Conservative party has said it will scrap the fixed line levy if it wins the election, which is due to take place by June.