Culture Secretary Andy Burnham outlines the report's interim findings
All UK homes should have access to broadband and faster download speeds by 2012, the government has said.
An interim report on the UK's digital future also looked at plans for public service broadcasting.
Prime Minister Gordon Brown said digital technology was as important today as "roads, bridges and trains were in the 20th Century".
But the Conservatives said the report promised "no new action". The Lib Dems said it was a "complete damp squib".
Culture Secretary Andy Burnham told MPs it would help Britain secure a competitive low carbon economy in the next five to 10 years, adding the country "led the world in content creation".
Every aspect of our lives... will be dependent on the services that the digital network provides
The report called for everyone in the UK to have access to a broadband speed of up to two megabits per second (Mbps).
This would make internet connections capable of handling much more video and sites that offer greater interactivity.
By the time of the final report, the government will know whether internet service providers (ISPs) can build next generation networks themselves or if government help will be needed.
Mr Burnham said that he wanted to ensure public services online were accessible to the widest range of people and wanted to "give parents the information and tools to protect [their] children from inappropriate content".
But opposition politicians said they were disappointed in the report.
Shadow culture minister Jeremy Hunt told BBC News it consisted of little more than promises to make more reports.
"We're very disappointed. We thought the report was going to contain a strategy. David Cameron has said the majority of the population should have access to high-speed broadband in five years. Instead they [the government] have announced another review.
"In France and Germany they are laying fibre, in Japan they already have it. In Britain the average broadband speed is 3.6Mbps so what he [Andy Burnham] is talking about is getting half the current speed," he added.
"We're the second largest exporter of music and television and third for film. But when it comes to the distribution of digital content, we're lagging".
The report also looked at the issue of internet piracy. Mr Burnham said the government would look at setting up a new digital rights agency and wanted to introduce legislation requiring internet service providers to notify illegal file-sharers directly about their activity.
Kashvi Shah uses pay-as-you-surf 100Mbps broadband at her home in west London
Mr Burnham also examined the role Channel 4 would play in the future of public service broadcasting.
"The report identifies news at local, regional and national level and children's programming as amongst the key priorities," he said.
"The BBC - as an enabling force is central to this - strong and secure in its own future, working in partnership with others to deliver these objectives.
"We will also explore how we can establish a sustainable public service organisation which offers scale and reach alongside the BBC, building on the strength of Channel 4."
Communications watchdog Ofcom last week warned Channel 4 faced a bleak future unless a deal could be reached.
The Liberal Democrats said the minister had failed to live up to his promises.
Speaking to the BBC, the Lib Dem's culture, media and sport spokesman, Don Foster, said the report was "bitterly disappointing".
"In September, the minister said... 'Early in the New Year, Ofcom can conclude its review and the government can announce decisions and the process to implement those decisions'. But we have no decision," he said.
"He failed to rule out top slicing. He welcomed discussion between ITV and the BBC, between Channel 4 and the BBC, but no decision.
"We've spent lots of money on reviews, but all we now have is a strategy group, an umbrella body, a delivery group, a rights agency, a exploratory review, a digital champion and an expert task force.
"This report has been a complete damp squib."
The report also examined the future of radio. The culture secretary said digital audio broadcasting (DAB) will become the "primary distribution network", potentially giving notice for the end of traditional FM analogue radio.
The government will also look at how the digital switch-over scheme - introduced for TV - could be expanded to help the radio transition.
The prime minister, speaking at the New Local Government Network in central London, said that the digital economy would play a crucial part in lifting Britain out of recession.
"Today we have an interim report from Lord Carter setting out the scale of our ambition to compete in the digital economy and that's a market worth about £50bn a year," he said.
"It affects every community in our country who are looking for the best digital infrastructure, access to broadband, that we can offer them.
"We know that every aspect of our lives in local communities - every school, every hospital, every workplace and even every home - will be dependent on the services that the digital network provides."
This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.