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The Conservative party has unveiled plans for a nationwide, super fast broadband network offering speeds of up to 100Mb by 2017, with broadband providers shouldering the majority of the cost.

Under proposals contained in the Labour party’s Digital Britain report, a 50p per month tax on landlines would be levied to fund the construction costs of a next-generation network. The plan would see an annual sum of £6 per year payable on each landline in a home or business.

However, a radically different funding model for the UK’s broadband infrastructure which places the onus on the private sector has now been unveiled by the shadow Chancellor George Osborne.

Under this scheme, the current broadband sector regulatory framework, which gives BT a monopoly over local loop unbundling, would be scrapped in favour of a new set of rules intended to encourage private investors to provide the finance for the rollout. It is hoped that the reforms will also see pave the way for improved cabling to be used.

In the event that this model leaves rural areas without a fibre optic broadband service, the Tories would use BBC licence fee money which is at present being used for the digital TV switchover. This equates to 3.5 per cent of the charge.

Broadband suppliers are currently unwilling to pay for fibre optic network in far-flung locales because low density populations make the investing commercially unviable.

George Osborne told the Andrew Marr show he was confident that the scheme would see Britain become the first European country to boast speeds of up to 100Mb.

He said: "In the 19th century we built the railways. In the 20th Century we built the motorways.

"In the 21st century let's build the super-fast broadband network that will create hundreds of thousands of jobs for Britain.

"We are currently one of the slowest countries in the developed world for broadband. With the Conservatives we'll become one of the fastest."

The unveiling of the new proposals follows heavy and sustained Tory criticism of Labour’s Digital Britain report. Jeremy Hunt has claimed that far from guaranteeing universal provision of fast broadband, the mooted £6 tax would see 200,000 Britons priced out of internet access.

Mr Hunt has also claimed that the charge unfairly placed a financial burden on up to 3.2 million people, many of whom are pensioners on low incomes, who do not want or need broadband.

Stephen Timms, who has overseen lengthy government studies and consultations into the nation’s telecommunications future, responded to the Conservatives’ announcement by accusing the party of playing “catch-up” with Labour.

Meanwhile, Liberal Democrat Liberal Democrat culture, media and sport spokesman, Don Foster cited studies showing that expecting private enterprise to fund a fibre optic network in rural areas is unrealistic.

He said: "Anyone can promise the earth – what matters is how you pay for it."

"All independent research shows that the market simply cannot provide high speed broadband in all parts of the country in the short term without investment."

Digital Britain has set a benchmark of ensuring that every household has a broadband connection speed of up to 2Mb by 2012. Many feel that this is too low to support new internet services and ensure the UK is able to compete economically.

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