The federal government's rural broadband plan is just a "spoiler", Labor frontbencher Simon Crean said today.

It [the plan] has no other purpose than to block Labor's own strategy for connecting to 98 percent of the country to fibre-to-the-node technology, according to Crean.

He said The government had failed to use any money from its sale of Telstra to reinvest in telecommunications and was coming up with a belated, inferior plan.

Crean was debating the Telecommunications Legislation Amendment (Protecting Services for Rural and Regional Australia into the Future) Bill 2007 which has opened up a prospective partnership between Optus and Elders to build a rural network.

OPEL, a joint venture between Optus and Elders, has been awarded AU$958 million to build a wireless broadband Internet network in the bush using WiMax wireless and ADSL2+ technology.

Labor has proposed spending AU$4.7 billion in public funds on a fibre-to-the-node broadband network capable of reaching 98 percent of Australians.

"Not content to demonstrate its incompetence, (the government) now brings this legislation which has got no other purpose than to attempt to block Labor's plan," Crean told parliament.

"Here we have incapacity and incompetence leading to the government's solution to block something.

"Because it's not a doer, it becomes a spoiler. That's what this legislation represents.

"Labor's plan is to use the AU$2 billion communications fund, so-called, to help build a world class telecommunications service in this country, the whole of the country."

Crean said the public would not stand for locking away the Telstra proceeds to pay for superannuation liabilities.

"Why should the Future Fund only be used to pay the superannuation liabilities of commonwealth public servants?" he said.

"Why should the proceeds of Telstra not be re-invested in the telecommunications network of this nation?

"Why should the communications fund be restricted to an interest-only payment?

"Labor won't stand for that, and neither I believe will the Australian public."

But Nationals MP Barry Wakelin said Labor's plan to use FTTN technology is not practical for rural Australia.

"It would have an access radius four kilometres from the exchange, spend AU$4.7 billion and would have a start date of mid-2008, completion date of 2013 and the communications fund would be abolished," Wakelin told parliament.

The government's option is more suitable, he said.

"The government by comparison has a program proven to reach 100 percent of the population of which the high speed would be (for) 99 percent (of them)," he said.

"It will cost the taxpayers $958 million and will guarantee affordable and metro comparable prices for all Australians."