The far-west Queensland mayors of Barcoo and Diamantina shires want to build 700km of optic fibre at a cost of up to AU$22 million, and are willing to chip in on the cost.
The areas are in the 3 per cent of the population who will receive a satellite-only service under the National Broadband Network (NBN).
But Barcoo mayor Julie Groves and Diamantina mayor Geoffrey Morton said that satellite-only broadband won't support the fixed-line and mobile voice, data and video services that the rest of the nation takes for granted.
"We also need our residents and visitors to be able to access mobile communication for safety, business and social media," Groves said.
"Our younger generation will not stay if they are not connected."
The councils have committed nearly AU$5.5 million to the fibre-optic project.
They hope to raise the balance from the Federal Government's Regional Development Australia arrangements, but must contribute at least 50 per cent to be eligible.
The previous Queensland Labor government committed AU$2.8 million, and said it would consider dollar-for-dollar matching.
But the new Liberal National Party (LNP) government said that no budget allocations have been made, and there is little chance of the work being funded when the new regime has a cost-cutting agenda.
Morton is seeking an urgent meeting with state government representatives, at which he hopes to change their mind.
"There is now a real risk of depriving these communities of what many domestic and global reports say is a basic right," he said.
Other local councils today have benefited from government largesse on broadband, but from a federal source rather than a state one.
Federal Communications Minister Stephen Conroy announced that the Federal Government has completed another AU$5 million round of grants. The money went to 14 local governments, with each local government receiving up to AU$375,000 to pay for products such as high-definition video conferencing.
“The 14 local councils in this round of funding span from Goodna in Queensland to Geraldton in Western Australia and Midway Point in Tasmania. Across Australia, local councils are embracing the NBN because they see the difference it can make to their communities,” Conroy said in a statement.
"High-definition video conferencing over the NBN is a great way to bolster important frontline support delivered by councils, as well as other services that require significant consultation, like building and development applications."