The number of broadband subscribers has trebled since the beginning of 2002 and an estimated 20,000 homes and businesses are being connected each week.
E-commerce Minister Stephen Timms said:
"This is great news for the UK. Today's figures show that people are beginning to really appreciate the benefits of broadband. This milestone is not all we have to celebrate. Thanks to thriving competition we can boast some of the lowest prices in the world.
"It is good news for consumers and operators. An increased demand will encourage providers to spread their service into more areas of the country. This means more access for consumers and greater business opportunities for the operators.
"It took five years for the UK to see a million people using mobile phones. At this pace, the UK is well on its way to being the most extensive and competitive market for broadband in the world."
Approximately 63% of the population has access to broadband, and 40% have a choice of provider. The Government is setting up a network of dedicated regional broadband advisors, to boost availability, take-up and support in unconnected areas of the country.
Oftel says it has promoted competition by ensuring access to BT's network through broadband interconnection arrangements and local loop unbundling.
Network competition exists among ntl, Telewest and BT. BT is required to make wholesale broadband products available to service providers on the same terms as for its own retail service providers. According to Oftel, over 100 service providers use these products to deliver services to consumers and businesses.
Broadband services are delivered to residential and business customers using a range of technologies including DSL, cable modems, fixed wireless networks and satellite.