The key points | Report in full

Every home from Oxford to the Orkneys will be entitled to broadband internet conneciton under proposals announced by ministers today.

A Digital Britain green paper confirms the scheme, which is expected to be paid for by a levy on telephone companies. It will benefit 1.75 million rural homes who do not have access to video-capable broadband.

Gordon Brown, the Prime Minister, said: “Our digital networks will be the backbone of our economy in the decades ahead. It is as essential to our future prosperity in the 21st century, as roads, bridges, trains and electricity were in the 20th century.”

The report was written by Lord Carter of Barnes, who was previously the Prime Minister’s chief strategy adviser at No 10. A former chief executive of Ofcom, the peer is now communications minister.

But the document was described by the Conservatives as a missed opportunity, with shadow culture secretary Jeremy Hunt saying: “The Government says that the commitment should be for two-megabit access. Given that the national average access speed is 3.6 megabits, isn’t the scale of the Government’s ambitions pitifully low?”

The report also pointed to a future where mobile broadband would be as fast as fixed line internet connections are today, through new “fourth generation” mobile services, which will be offered using part of the radio spectrum that will be freed up when analogue television is switched off in favour of digital in the run up to 2012.

Covering every area of communications and media, Digital Britain also outlines controversial measures to crack down on illegal downloading.

Internet providers will be required by law to warn customers when they are illegally downloading. Serial pirates also face the prospect of their personal details being handed over to music and film companies, so they can be sued. But there is no mention of cutting infringers' broadband connections.

A special body, a Rights Agency, will also help to deal with piracy issues, and it will be funded by a levy on internet providers and music and film companies - effectively a tax on broadband subscribers and CD and DVD buyers.

The attack on pirates failed to win over the music industry, which warned it did not go far enough. Geoff Taylor, from the BPI, the trade body for the major labels said: “It is hard to see how letter-sending alone will achieve the aim of significantly reducing illegal filesharing which the government has set itself. Consumer research shows that filesharers are only likely to change their behaviour if they know that letters are the first step in a process and further action will be taken by service providers.”

Ironically, hours after the British announcement, Ireland’s Eircom announced that it would disconnect users who download music illegally from the Web in a settlement that is believed to be the first of its kind in the world. It said it would isolate people who continued to download illegally after receiving two warnings.

Digital Britain also proposed that FM Radio could be switched off by 2017, in favour of digital radio, as ministers try to bring new impetus to an expensive digital service that is not used in cars and is still viewed as a luxury in many households.

It said that media mergers were needed to help increasingly struggling advertiser-funded media companies. Channel 4 is to be safeguarded by creating a "sustainable second public service organisation providing competition for quality to the BBC". Ministers will start by looking at tie-ups with Channel 4 and BBC Worldwide, but the Government is "evaluating a range of options and organisational solutions," including a possible merger between Channel 4 and Five.

Ministers will also review the existing rules that are preventing local newspaper mergers, which is expected to see a liberalisation that will allow today’s four main groups reduce in size by at least one. The idea is that larger companies will better be able to protect investment in local journalism.

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