The Coalition government today announced a multibillion dollar upgrade to bring fibre internet connections “deeper” into neighbourhoods as well as fibre services for businesses.

The upgrade will be financed through NBN Co. borrowing from private debt markets and give “up to 75 per cent” of fixed-line premises across Australia access to 1 Gigabit per second speeds by 2023, according to the government.

The coalition government scrapped Labor’s already underway fibre network upgrades in 2013 when it won government, claiming Labor’s plan was too expensive and would take too long.

The Coalition alternative, a “multi technology mix” relying mostly on decades-old copper wiring, has been criticised for its unreliability and creating a “digital divide” or tiered system of access, where some consumers enjoy ultra-fast connections while others report limited speeds and congestion problems.

The NBN rollout is now essentially finished. Global rankings show Australia is dead last in the OECD for affordable broadband and currently hovers around 60th in popular global speed test rankings.

A government press release published today says the new upgrade will address some of the issues of the controversial fibre-to-the-node or FTTN connections, where fibre connections end at nodes and then use existing copper wire connections to households.   

“There will then be a further investment to take fibre deeper into neighbourhoods, through building local fibre networks that run along street frontages,” the release says.

The government says this approach — rather than Labor’s plan of delivering fibre connections directly to almost every house — will let citizens upgrade to fibre “on-demand” when “their requirements exceed existing line-speed capability”.

Minister for Communications, Cyber Safety and the Arts, Paul Fletcher, will officially announce the upgrades later today. Notes of his speech suggest he will argue the fibre upgrade is only feasible now because of the existing infrastructure.

“The upgrade will reuse the new fibre built as part of the fibre-to-the-node rollout, and extend it further into the suburbs,” he will say, according to speech extracts.

“This plan is possible because NBN Co. has now proved its business model and is generating substantial and growing cashflows — in turn allowing it to borrow in the private debt markets.”

In total the government says it will spend $3.5 billion to make the high-speed connections available to up to 75 per cent of homes and businesses on the fixed-line network by 2023.

Yesterday the government also announced a $700 million package to develop 240 “Business Fibre Zones” which it says will allow 90 per cent of businesses to order high-speed fibre broadband.

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