The Minister for Communication, Information Technology and the Arts Helen Coonan has promised to funnel funds from the Connect Australia program into "raising the bar" when it comes to regional broadband infrastructure to achieve faster speeds and greater connectivity.

Delivering the keynote address at the Australian Telecommunications User Group (ATUG) conference yesterday, Coonan said the $3.1 billion Connect Australia plan is a real opportunity to revitalize telecommunications in country communities.

"My department is committed to ensuring important safeguards remain in place to deliver current and future services to regional Australia," she said. "We have $1.1 billion for services now and a $2 billion communications fund to bankroll services into the future and the new Broadband Connect program will aim for infrastructure able to support speeds of megabits and more."

Coonan is also considering setting aside a large part of the fund for competitive wholesale access in regional areas.

She said this will provide a broad basis for ongoing infrastructure competition in the regional structure and as part of the planning has called on the department to audit broadband infrastructure across Australia to understand capacity or emerging gaps.

The report is expected to be completed in coming months.

To meet higher broadband speeds, Coonan suggested Telstra develop a business case for not holding back its ADSL network.

"It can hardly be attractive for someone on a 256Kb service to spend up to 12 hours downloading a movie over the new Bigpond movie download service; but we all know it is competition, not heavy-handed government intervention that will provide the impetus for Telstra to act," the minister said. Coonan also warned Telstra that its new high-speed broadband network will not escape the industry's regulatory microscope.

She rejected claims by Telstra that regulation of the telecommunications regime is limiting its operational flexibility and causing consumers to pay more for services.

Australia's number one telco last year unveiled a $10 billion plan to build a higher-speed network, known as fibre-to-the-node.

But it won't commit to the plan to extend fibre-optic cables to street-side cabinets until it has guaranteed, regulatory 'safe harbour' to protect its investment.

Senator Coonan said Telstra, like its rivals, would always come under the microscope of the Australian Competition and Communications Commission (ACCC).

"I am sympathetic to Telstra's desire to minimize the risk inherent in major new investments; however, the logic of exempting such networks completely from the access regime is not compelling," she said.

Federal opposition communications spokesman Stephen Conroy said the industry had reached a stand-off.

"At the moment, Australia's telecommunications regulatory regime is not delivering adequate regulatory certainty for large scale infrastructure investments," he said.

Coonan also released the final guidelines for the $50 million, three-year Metropolitan Broadband Connect program under the Connect Australia package.

The Metropolitan Broadband Connect program involves a subsidy for Internet service providers (ISPs) in the form of an upfront payment for infrastructure or by a per-customer subsidy to roll out affordable broadband.

Coonan said this money will "grease the wheel for the industry to connect outer metro areas more quickly", adding that the rest is up to industry.

Under the Metro Broadband Connect program announcement made yesterday, ISPs are invited to register so potential customers can find broadband services available to them or express interest in connecting to such a service.

For more information on guidelines surrounding Metro Broadband Connect, go to www.dcita.gov.au/tel/mbc