The government will plough US$831 million (£530m) into giving the residents of North Yorkshire, Cumbria, Herefordshire, and the Highlands superfast broadband.
The scheme, which will trial superfast broadband in rural areas previously considered economically unviable, was announced by chancellor George Osborne during the Spending Review.
The project will be rolled out over the next four years and will see £300m of the funding coming from the remainder of the BBC license fee, which was initially earmarked for the digital switch-over.
"It will help encourage the growth of our creative industries as a key part of the new economy we are seeking to build," said Osborne
Around two million homes are expected to benefit from the scheme, which is being overseen by Broadband Delivery UK, the government organization tasked with managing the roll-out of 2Mbps broadband across the whole of the UK.
David Cullen, chief executive of NYNet, the ISP chosen by the government to work on the scheme in North Yorkshire, said: "The geography and demographic makeup of North Yorkshire represents a typical 'final third' area and the project will provide a valuable testing ground that will assist the government in providing broadband access to the whole of the UK."
Andrew Ferguson, editor of Thinkbroadband.com, welcomed the annoucement. He said that unlike Labour's proposed 'Broadband tax', which would have seen Brits with a telephone line forking out an extra £6 per year, freezing the licence fee and using part of this to fund broadband will not be seen as a tax rise by the average person.
"However, £530m is a drop in the ocean compared to what would be needed to bring next generation broadband coverage up from current projected levels to the 97 percent-plus coverage. It may however be sufficient to move the UK up the European league tables, something the government has committed to do," he said.
"If used wisely, it will help create sustainable next generation network that attract the users it is meant to help."
The government's announcement follows a recently-announced BT-backed scheme that will bring superfast broadband to every resident in Cornwall, through fibre, wireless, satellite and other technologies. The £132m project is partly funded by the EU.
BT is also asking Brits to nominate areas where fibre broadband should be rolled-out. The five locations with the most votes will then be given superfast broadband, funded by BT, by early 2012.
During the Spending Review, the government also revealed it plans to auction the 800MHz and 2.6GHz radio spectrums that will allow mobile networks to offer 4G LTE (Long Term Evolution) services during 2011 or 2012.
This story, "UK Beefs Up Rural Broadband" was originally published by PC Advisor (UK).