The Institute of Public Affairs says the Government's plan for rural Australia is likely to cover ten kilometres from a transmitter rather than their target of up to 20 kilometres.
The report states there is a need for a fibre-optic network as Labor proposes, but it criticises both parties for failing to adequately plan for the future.
Labor's communications spokesman Stephen Conroy says the Coalition's plan is a scandal.
"No matter how hard John Howard and Helen Coonan try to rewrite the laws of physics they just can't," he said.
"This is the second independent report that has stated that you can not transmit broadband to nearly half the places using the Government's wireless broadband that John Howard claims."
Mr Conroy says the objectivity of the report further proves the Coalition is promoting something it cannot deliver.
"This isn't a Labor Party think tank, this is the conservative Institute of Public Affairs who have supported the Howard Government through 11 long years," he said.
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