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British broadband subscribers could see a levy charged on their bill in the near future, according to a report.

Lord Carter, the communications minister, is set to reveal his intentions for the UK's broadband future in his Digital Britain paper.

However, the Daily Telegraph reports that part of the measures will see an agency created to tackle online piracy, with a tax on broadband bills used to compensate the film and music industry for losses incurred due to illegal downloads.

The entertainment industry has been pushing for such a move, claiming that it loses hundreds of millions of pounds through the practice.

An entertainment industry source spoken to by the newspaper said that Lord Carter was "sympathetic" to their concerns, "but he is also very keen not to jeopardise his stated aim of ensuring every household in Britain has broadband".

Most record companies were hostile to the phenomenon of file sharing websites such as Napster when they first appeared a number of years ago, but many now work in partnership with legal download sites such as Apple's iTunes.

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