The government is to draw up a battle plan on the best way to roll out next-generation broadband networks.
It will share best practice from high-speed pilots around the UK as well as lay out the business case for future investment in high-speed networks.
The agreement came out of a broadband summit chaired by Competitiveness Minister Stephen Timms.
Mr Timms said ultra-fast broadband would be a key technology for Britain.
He welcomed Virgin Media's announcement that it will be launching a 50Mbps (megabits per second) broadband service in the UK in 2008.
"This is an important stride towards full next-generation access in the UK which I'm sure others will want to match," he said.
Broadband industry leaders met ministers on Monday to discuss how to stop the UK dropping into the internet "slow lane".
More than half of all UK homes now have a broadband connection, at an average speed of 4Mbps.
But the broadband summit heard how other countries are moving more quickly to build ultra-fast networks that can deliver speeds of as much as 100 Mbps.
Speaking at a Westminster eForum event organised by MPs last week to look at the issue of next-generation broadband, Alan Lazarus, head of regulatory policy and strategy at BT, said he was not yet convinced people needed more bandwidth.
"What is the demand? What are the services that people want that take them beyond current capacity?" he asked.
He also pointed out that some of the bottle-necks of current access were in the core network, which BT is already spending £10bn to upgrade.
Also speaking at the eForum, Virgin Media's chief technology officer Howard Watson said its trial of 50Mbps had proved a user demand for such bandwidth.
It will deliver the high speed broadband - more than twice the maximum it currently offers - by the end of next year.
Virgin's 50 Mbps service will be available to more than 70% of the 12.5m homes its cable network covers by the end of 2008, the firm said.
The domestic broadband revolution in the UK could be stopped in its tracks amid a brewing battle between BT and the rest of the industry.
The telecoms group is set to resist pressure from the Government to invest the billions of pounds required to build a faster broadband network around the country if it is not allowed to increase the prices it charges competitors for using its own network.
The move would be a blow to the Government's ambitious plans to enable British internet users to surf the web at more than 10 times current speeds in order to keep pace with neighbours such as France and Germany.
Battlelines were drawn after BT began talks with Ofcom, the regulator, about a hike in the prices it charges rivals such as Carphone Warehouse and BSkyB. These companies use BT's network to sell broadband connections that rival BT's own products. BT says it is not making the 10 per cent return on the cost of its £11bn network that was promised by Ofcom, and has asked the regulator to give it more freedom to set prices.
Analysts said BT's move is not a surprise. According to Mike Williams, telecoms analyst at Citigroup: "The situation looks unsustainable. If it goes unchecked it would affect BT's profitability. There is an increasingly strong argument that prices need to go up, but that has quite significant implications for the rest of the sector."
Ofcom confirmed it was reviewing the situation and would announce its decision next year.
But BT's rivals are likely to oppose the move. A source at one rival operator said: "We are unlikely to give any support whatsoever to price increases. These would have to be passed on to the customer and that's not a good idea when broadband is taking off."
BT claims it is making a return of just 9 per cent on its network, and that this number is likely to fall every year. Independent analyst Arete puts the figure as low as 8.7 per cent, and says prices may have to go up by as much as £3 per customer per month.
Ofcom stepped in two years ago and forced BT to lower its wholesale prices and allow rival operators into its local exchanges to install their own equipment, a process known as local loop unbundling. A raft of new competitors including Carphone Warehouse, Orange, BSkyB and Tiscali started offering "free" or cheap broadband as part of a package of phone and TV services.
Since 2004, the number of residential connections has more than doubled, from 5.8m to 13.3m, meaning more than 50 per cent of the country now has broadband.
A spokesman for BT said: "We would favour a situation where Ofcom set the rate of return and let BT set the prices." He added that without "regulatory certainty", BT is unlikely to build the £7bn, fibre optic, high-speed cable network.
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