I am 7.5Km's from my exchange (Cable distance). When I first moved in and was organising my phone, Telstra asked if I wanted broadband. I said yes, then he goes, nope, sorry you are too far from the exchange, would I like ISDN? HAHA No, bye.
So I called Adam Internet and asked if I could have ADSL2. They said they were more than happy to give it a go, but because of the distance said they couldn't guarantee it would work.
So I signed up and have been using them for over 2 years now. I get about 4mbps, which I know is not great, but (a) it's faster than ADSL and (b) it's cheaper than 1.5 ADSL.
So it does work over long distance but you have to have decent cabling back to the exchange (It helps when your old man can look up all the cable plans and check all this for you as well

)