The government has extended its subsidy to help rural Australians establish a broadband connection by four years.
In his first budget, Treasurer Wayne Swan has promised AU$270.2 million in funding to ensure the Australian Broadband Guarantee (ABG) remains intact until at least 2012.
The ABG was a Howard government initiative that subsidises the cost of Internet access for rural and regional Australians.
Broadband Minister Stephen Conroy said in a statement it is important that all Australians have "equitable access to broadband".
Conroy added, however, that the ABG was being changed "in response to industry and consumer feedback". He claimed it would be a "new phase" for the subsidy, which was recently extended till the end of the 2009 financial year, at a cost of AU$95 million.
"The Government's changes to the Australian Broadband Guarantee and its commitment to funding for four years will encourage the broadband industry to develop more long-term and innovative Internet solutions for rural and regional Australians," Conroy said in a statement.
The ABG was designed to protect the two percent of Australians living in areas that will not be covered by the government's proposed AU$4.7 billion fibre-to-the-node (FTTN) network. Swan has confirmed that the AU$4.7 billion has been put aside to fund the FTTN project but said the full budgetary impact would be dependent on the outcome of the tender process.
The government will also provide AU$8.6 million over five years to be used to develop and monitor the roll-out of the network. Telstra and the G9 consortium led by Optus are the only two confirmed bidders to build and operate the network.
The Federal government has talked up its national fibre-to-the-node network, with Conroy claiming that the widespread availability and affordability of first-class Internet services are a top priority.
Conroy has said the project will rival the Snowy Mountains hydro scheme in terms of both its scale and significance.
AAP contributed to this report.