The Australian government has announced plans for a new National Broadband Network which could be the single largest nation building infrastructure project in the history of the country. It represents its biggest reform in telecommunications in two decades. The decision demonstrates a vision for creating a national network infrastructure that could serve as an example to many other countries.

Kevin Rudd, the Australian Prime Minister, described it as the “single biggest infrastructure decision in Australia’s history”.

The wholesale open access network will be built and operated by a new company, jointly owned by the government and the private sector, which will invest up to AU$43 billion over eight years in the development.

The government rejected proposals from other bidders on the grounds that they did not offer value for money. The network will be operated separately from retail telecommunications providers, such as Telstra and Optus.

The new National Broadband Network will connect 90% of Australian homes, schools and businesses with fibre to the premises broadband at speeds up to 100Mbps, and connect all other premises in rural Australia with next generation wireless and satellite services delivering up to 12Mbps. It aims to support an average of 25,000 jobs over the eight year project.

The government will invest in this infrastructure to stimulate jobs in the short-term and enhance productivity and innovation in the long term. It says it is an historic nation-building investment focussed on the long-term national interest that will fundamentally transform the competitive dynamics of the telecommunications sector and the international competitiveness of the country.

The plan is to start the roll out in early 2010, although work could begin in Tasmania as early as July this year.

It looks like it will be the most ambitious fibre to the premises network initiative in the world. The announcement was welcomed by Australian independent telecommunications analyst Paul Budde, who said “The Australian Government is one of the few governments who, in a holistic way, understand the importance of broadband across the various sectors”.

The open network approach allows the infrastructure to be offered to content and service providers on a utility basis, enabling the development of the digital economy to deliver an economic multiplier effect and benefit healthcare and education.

“These content and service organisations can now independently develop their own products and services without being controlled by a gateway-keeping and ticket-clipping, vertically-integrated telco,” he said.

After years of dithering over its telecommunications policy, the Australian initiative represents a bold move that could serve as an example to other countries.

The current plan for Digital Britain, for example, only envisages universal access to broadband at 2Mbps over existing telephone wires.

In the current economic climate, governments need to be thinking about national infrastructure programmes that commit considerable investment but could pay significant dividends in terms of long term economic competitiveness.

The implications for media companies are profound, presenting new threats and opportunities for broadcasters and opening up prospects for new entrants which will require careful consideration. The wider social and economic benefits could also have considerable consequences.