The federal government plans to establish the $4.7 billion network which aims to deliver high-speed internet services to 98 per cent of the population.
Terria, a consortium of eight telcos, including Optus and AAPT bidding for the national broadband network (NBN) contract, says the network should be rolled into capital cities from the bush.
Terria chair Michael Egan said the government should insist that consumers without broadband access were the focus of the initial deployment.
"The areas that are in greatest need are obviously those that don't have services such as their capital city cousins have," Egan told the inquiry.
"As a matter of equity ... that's where government and parliament should be insisting the rollout should start."
Egan said Telstra, which owns the majority of the existing copper wire, wanted to roll out the network from the cities to the bush.
"In Telstra's case ... the commercial incentive for them is to roll out from the capital cities because that's where they are currently experiencing most competition from their rivals."
Terria wants the new network to be run independently from any one telco.
Under its bid, the consortium says it will build the fibre-to-the-node network and rent it out at a set price to any telco wanting to use it.
Egan said if Telstra were to win the lucrative bid it could wipe out all competition.
"The national broadband network will be the platform for robust vigorous competition among a very large number of rival retailers."
"But if Australia gets it wrong the national broadband network has the potential to wipe out competition in telecommunications, and frankly I think that's been Telstra's game plan all along."
Bidders have until November 26 to submit their NBN proposals.
