Chancellor George Osborne announced in his 'emergency budget' yesterday that the new coalition government had decided to scrap the 50p-a-month landline tax promised by the previous Labour government.
The 50p charge was designed to raise funds to pay for the nationwide roll-out of superfast next-generation broadband services.
According to BBC News, the new coalition will instead use the extra cash it received as a result of an underspend in the previous government's fund for digital TV switchover.
The money will be made available to private firms to help extend next-gen broadband connections of at least 2Mbps into so-called "not-spots" in rural areas.
Announcing the government's decision, Osborne stated: "I am happy to be able to abolish this new duty before it is even introduced. Instead, we will support private broadband investment, including to rural areas, in part with funding from the Digital Switchover under-spend within the TV Licence Fee."
The previous Labour government had been criticised by the Tories for its plan to extend the broadband network into rural areas via the new landline tax.