Digital Britain calls for broadband in all areas and the use of licence fee funds to fund ITV regional news
Plans to use part of the TV licence fee to support Welsh news on ITV have been announced by the UK government.
The proposals, in Lord Carter's Digital Britain report, were outlined to MPs by Culture Secretary Ben Bradshaw.
Ministers said they would consult on using a "small" part of the licence fee to fund an alternative to BBC news in UK nations and regions after 2013.
ITV has warned it will be unable to provide Welsh news or regional bulletins in England after this time.
Mr Bradshaw said the government would consult on using "a small element of it (the licence fee) post-2013 to help ensure high quality, plural provision, particularly in the regions and in the nations".
"And subject to that consultation... we'll use some of the current digital switchover underspend to fund pilots of the model in Scotland, Wales and one English region between now and 2013," he said.
Welsh Secretary Peter Hain says that next generation broadband is and should be a possibility for everyone in Wales
"We have, however, made clear to the BBC and others that we're open to alternative proposals, should they wish to make them during the consultation," Mr Bradshaw added.
The BBC Trust has criticised the proposals, saying removing part of the licence fee would "damage BBC output".
Trust chairman Sir Michael Lyons said it "must not become a slush fund to be dipped into at will".
He said: "This would lead to the licence fee being seen as another form of general taxation.
"The trust will not sit quietly by and watch this happen."
But Welsh Secretary Peter Hain welcomed the report as a "a big moment for Wales".
"Sharing a fraction of the BBC's licence fee, and it is only a tiny fraction, to help make sure we get diversity of television news and that we strengthen local and national media outlets across Wales is, I think, a very small price to pay which people will happily pay in order to make sure that they've got choice.
"Otherwise, we'll end up with one monopoly provider of television news and local newspapers going to the wall and that's not good for people's choice and making sure they get the news they want."
Last week a Welsh assembly committee said an independent commission funded by £25m worth of public money was needed to safeguard ITV Wales.
The communities and culture committee said cuts on the channel in recent years were "deeply troubling".
However, the Digital Britain report appears to reject the idea of a Welsh Media Commission put forward by the assembly culture committee.
In some of the supplementary documents to the report, it states that while a commission "would certainly increase plurality of content across all genres", the costs would be "far too prohibitive" given the UK government's priorities.
It says: "Government has considered a range of different options including full competitive funding of news; competitive procurement on a far larger scale either through new media commissions or new digital networks for example; or doing nothing at all.
"While such models would certainly increase plurality of content across all genres, the cost is anywhere between £25-75m per nation per annum depending on the ambition.
"Given the government's priorities and the fact that each nation would reasonably expect consistent treatment, the costs of providing such schemes would be prohibitive," it states.
Digital Britain also includes plans for a "small levy" on all fixed telephone lines to establish a fund for next generation broadband and for legislation to curb unlawful peer-to-peer file sharing.
Mr Bradshaw also told the Commons that the government intended to upgrade all national radio stations from analogue to digital by 2015.
Welsh language fourth channel S4C said it would "carefully consider" the report before making "a full assessment of its implications".
S4C said: "The impact of Digital Britain on future news provision and children's programming is of particular interest given S4C's prominent role in these areas. We will continue to engage with Digital Britain with the clear aim of ensuring the future of public service broadcasting in Wales."
In response to the report, Plaid Cymru urged "greater clarity" on the future of broadcasting and broadband.
Plaid media, culture and sport spokesman Adam Price repeated calls for a "properly funded, independent Welsh media commissioning service" and said there had to be "enough money to get the job done".
Mr Price said broadband plans lacked ambition, and wants 5MB a second as standard, instead of 2MB, which "can only be achieved by solving problems with 'not-spot' areas and ensuring that rural access to web services are on a par with urban areas".
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