Chairman of the Telstra Broadband Fund, Dr Hugh Bradlow, said the grants will now focus on both content services and applications.
"We are looking for content designed specifically for use with a broadband service," he said in a statement.
Applicants hoping to be awarded with a grant, which comes with a broadband allocation of up to AU$250,000 worth of bandwidth on top of any cash amount, must propose a project involving a high level of interactivity.
"Successful content projects will require a high speed data flow and involve an upstream channel to enable users to interact with the content," Bradlow said. "Applications that primarily involve passive viewing or listening are not as effective at driving take-up, so they will not receive funding".
Telstra claims the first round of projects that received grants were successful, with some groups already to commercialise their developments.
"Some first round applicants have completed their projects and are about to market their products," Bradlow said.
He cites a Canberra-based company, Agrecon, as an example. It designed an Internet based "planning support system for intensive broad-acre agriculture".
Applications will be accepted until 18 September.
