It's absurd to hear politicians argue about how networks should be built. IMO that is the role of a competitive market.
To my understanding, it went something like this:
AU Govt: "Let's privatize all of our telecoms infrastructure.... what's that? Give it all to a single company, creating a de-facto monopoly and ensuring mediocre service, lack of upgrades, and the stifling of competition for years hence? What a capital idea!"
I would love to out the politicians whose pockets got lined by that move.
Land access, easement issues, pit access/location/sharing and so on are very difficult problems with no single solution.
Private industry wouldn't be able to take the risk.
The problem with a competitive market as applied to public utilities is that there is only 1 set of infrastructure. So either 1 player owns the infrastructure and provides the service, the current regime, or you break out owning the infrastructure and providing the service.
The plan with the NBN is that NBNCo will own the infrastructure and then lease last-mile connections to whomever that specific customer chose as their ISP.