The much debated Government £6 pa 'broadband tax' on fixed lines is to be scrapped, according to a new report by Policy Exchange.

The broadband tax was proposed in the Digital Economy Bill to fund the roll out of super-fast (fibre-optic) broadband to UK households as part of a broader "universal broadband commitment" which is the Government's goal to ensure that all UK households have access to 2 Mbs broadband by 2012, despite the fact that there are currently about 3 million homes that are in so-called broadband "not spots" and are unable to receive broadband at all.

The report from the Policy Exchange calls for the establishment of a new £300m division called the Public Access Division (PAD) which would spread broadband to remote parts of the UK through community broadband hubs in libraries, community centres and post offices.

This solution is deemed to be far cheaper that the estimated £3.5bn broadband investment that required the broadband tax to support it.

The new division would also be given responsibility for "digital projects" (whatever they may be) and general standards role across the internet and it would protect children online by using a 'kitemark' system on websites.