"What we have announced today is a plan that will deliver to 99 percent of the Australian population very fast and affordable broadband in just two years' time," Howard said. An expert group will also develop a bidding process for the building of a fibre-to-the-node (FTTN) broadband network, funded solely by private companies, in major cities.

Communications Minister Helen Coonan said wireless was the best option for rural Australia because it was impossible to install cables which would reach every farm and property across the country. "It's been specially developed for rural and regional areas, where (with) fixed broadband you've got to actually run a fibre optic," she said. Senator Coonan said the broadband speed of 12 megabits per second could "scale up" to very fast speeds as the technology evolved.

"It will be able to go much faster, up to 70 megabits a second and of course our new high-speed fibre network will be able to go up to 50," she said. But the opposition labour Party attacked the plan, saying it was too little, too late ahead of this year's election and provided country people with a second-rate service.

"The government proposes a two-tier system -- a good system for the cities, they say, and a second-rate system for rural and regional Australia," labour leader Kevin Rudd said. labour has proposed spending 4.7 billion US dollars to build a national fibre optic network which would cover 98 percent of the population. The National Party, which is part of Howard's ruling Liberal/National coalition, welcomed the proposal but said it would continue to push for FTTN technology in regional areas.

Nationals Senator Barnaby Joyce said the fact that Australia was a vast country with a small population meant it would always be playing catch-up with other countries when it came to broadband. "We'll always be catching up, always, because we are 20 million people in a country (the size) of the United States without Alaska," he said.