Telstra claims the federal government is handing over taxpayers' funds to a foreign-owned rival to deliver broadband to the bush with unproven technology.

The Howard government has promised 99 percent of Australians will get access to high-speed Internet under its long-awaited broadband strategy, announced yesterday.

While the private sector will tender to build a fibre-to-the-node broadband network in built-up areas capable of delivering Internet speeds up to 50Mbps, regional areas will get WiMax wireless and ADSL2+ broadband. The rural rollout comes at a cost to the government of AU$958 million and AU$900 million to the joint venture between Optus, partly owned by the Singapore government, and Elders.

Telstra, which missed out on winning the regional rollout, said the government decision in the bush would do little to improve telecommunications because it relied on unproven technology and largely duplicated existing services.

"For the sake of subsidising a competitor, the government has ignored the original intent of the program, which was to extend broadband access to underserved areas rather than duplicate existing services," Telstra CountryWide's Geoff Booth said.

Independent rural MPs were also worried the bush was coming off second best. Tony Windsor, the member for New England, accused the Nationals of blindly letting country folk get second best technology compared to what was being offered to urban Australians.