The winning telco in Australia's national broadband network tender? None of the above. At a press conference this morning, Prime Minister Kevin Rudd said the government will drive the building of a fibre network itself – taking a leaf out of New Zealand's book.

The government has also dramatically expanded the scope of the network from fibre-to-the-the node to fibre-to-the-home, putting the total build cost in the vicinity of $A43 billion.

The government's share of the network, beyond the initially promised $A4.7 billion, will be funded by an infrastructure bond.

The network will be built by a private-public company, the National Broadband Corporation, with private investors able to hold up to a 49% stake – a setup that echoes the public-private fibre companies proposed on this side of the Tasman by Communications and IT minister Steven Joyce last week.

The National Broadband Corporation will invest $A43 billion over the next eight years to build the network.

Five years after the network is completed, the corporation will be fully privatised - again mirroring Mr Joyce's mooted set-up, which would see the state interest in up to 25 local fibre companies revert to ordinary shares after 10 years.

"Fibre to the home, fibre to the business and fibre to the premise is what the 21st century economy is all about," Mr Rudd says.

None of the telco bids put in last year, from Optus and others, were up to this vision, put forward by the expert panel charged with deciding on a preferred bidder for the tender.

The prime minister says the megabuild will create 25,000 jobs a year.

Telstra, which was barred from the tender after refusing to submit a full bid, is now back in the running, but can only be a partner on the wholesale level. The prime minister went out of his way to say that the network will remove "once and for all" the perceived conflict of interest of Telstra owning both infrastructure and retail interests (similarly, Telecom is barred from a majority investment in the LFCs to be created under Mr Joyce's scheme). Again like the New Zealand plan, there will be open access to the network.

Mr Rudd called today's announcement "the single most important decision in Australia's infrastructure history."

Homes, businesses and other organisations in urban areas are to get 100Mbit/s fibre connections.

Those in rural areas will be covered by a mix of ADSL, satellite and cellular broadband options.

The first build, in Tasmania, will start in the middle of the year.