The government is set to ask ISPs and communications companies to offer ideas on how to give every resident in the UK a 2Mbps broadband connection at an event to be held this Thursday.

When it came to power, the new coalition government said it remained committed to honouring Labour's pledge to offer every Brit internet access of at least 2Mbps by 2012. How the scheme will funded has yet to be outlined. The government hopes to use the 'Industry Day' to find out whether communications firms would be willing to install fibre broadband in commercially unviable areas if they were given subsidies.

Currently it's only in urban areas that the UK's aging copper networks are being upgraded to fibre optic cables, which can offer speeds of 'up to' 100Mbps. This means millions of homes and businesses in rural areas are being excluded.

Labour planned to impose a yearly £6 levy on Brits with a telephone line in a bid to fund the roll out of 2Mbps broadband. However, the coalition government have ditched this and instead plan to use £300m left over from the digital switchover fund. But it's unclear where the rest of the funding will come from.

"Unless the government has a few spare billion, it's not going to resolve this issue on Thursday," BT group strategy director, Olivia, Garfield told the Guardian.

Recently 1Mbps broadband became a legal right in Finland, but Garfield said she could not see this happening in the UK, "given the budget deficit we [the UK] have".

David Palmer, senior product manager for networks and connectivity at managed services provider Star, believes the challenge faced by the government and ISPs is how to deliver fast broadband to rural areas in a cost-effective way.

"Unless the whole network is replaced by fibre, which is very unlikely, alternative ways of delivering fast broadband to the rural community should be investigated, otherwise it could lead to an even bigger digital divide between urban and rural areas.

"We are seeing a growing trend of UK businesses using cloud computing and on-demand services and the primary enabler for this is higher bandwidth. Cloud computing would simply not be practical on ADSL speeds of sub-2MB due to large file sizes and the general working speed of applications over this bandwidth.," he added.