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The proposed tax on fixed phone lines will not raise enough money to fund next-generation broadband, ISP BT has warned.

Last month, the company's chief executive Ian Livingston was supportive of Whitehall's broadband policy as it was outlined in the Digital Britain report and suggested to the Financial Times that BT could cover 90 per cent of the UK with fibre by 2012.

However, technology website v3.co.uk reports that the ISP feels a £6 annual levy on phone lines will not provide suppliers with enough money to cover the entire UK with fibre broadband.

It quoted BT's Strategy Director Liv Garfield as saying that the levy could provide up to £1 billion of funding for fibre broadband network installation, but she added that it is not yet clear in which areas this money would be invested.

"If you're going from 55 to 85 per cent [coverage], then I can see that that could be delivered. I can see a way to get to 85 per cent with that kind of money.

"But we will struggle to get to 100 per cent - in fact it would be impossible to get to 100 per cent," she added.

At a briefing to discuss its high-speed broadband rollout, BT said that it is prepared to guarantee a 15Mb service in all areas where fibre is available.

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