Federal Communications Minister Stephen Conroy has defended a comment he made about Australian telecommunications bosses wearing red underpants on their heads.

Senator Conroy made the remarks in a presentation he gave in New York earlier this week.

A scratchy recording has emerged of Senator Conroy talking about telecommunications and the cost of broadband in Australia during the presentation.

"I'm in charge of spectrum auctions and if I say to you everyone in this room, 'if you want to bid next week in our spectrum auction you better wear red underpants on your head', you'll be wearing them on your head," he said.

"I have unfettered legal power."

Senator Conroy made the comments comparing the Government's position in the telecommunications industry in Australia to that in the United States.

"Not many regulators have quite that much power," he said.

"But we don't just have the power, we believe we have the responsibility to do something."

He said that is why the Government is committed to the National Broadband Network.

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Conroy plays down 'red underpants' comments