A NSW Government-backed, community-led project — and model for future fibre upgrades beyond the NBN rollout — has hit a major hurdle.

Key points: A bush community near Canberra fears its plan to build an NBN alternative might never happen

A bush community near Canberra fears its plan to build an NBN alternative might never happen The NSW Government-backed the initiative but is now locked in a legal stand-off with the community

The NSW Government-backed the initiative but is now locked in a legal stand-off with the community NBN Co is yet to outline its plan to upgrade the existing connections, which struggle to cope with demand

Residents in Wamboin, near Canberra, fear a plan to replace their NBN satellite connections with high-speed fibre might never be realised.

That's despite a $5 million grant that earmarked the project as a pilot for the NSW Government as it moves into funding fast fibre networks, and as NBN Co remains silent on future upgrades.

NSW Deputy Premier John Barilaro even hoped it would be up and running in the middle of this year.

Wamboin residents with technology and procurement experience devised a plan to roll out their own network in a semi-rural area served by NBN satellite.

Jon Gough, a member of the Wamboin Communications Action Group, said it increasingly looked likely the project would not start "until well into 2020, if at all".

The members of the group were asked to sign a confidentiality agreement with the NSW Government that they claim prevented them publicly discussing government policy and exposed them to potential penalties, with no end date.

Glenn Archer, another member of the group, said he was still hopeful the project would proceed but he could not sign the agreement.

"We're a bit disappointed that such a legalistic approach has kind of put a bit of a barrier to the idea."

A spokesperson for Mr Barilaro said confidentiality agreements were "standard practice".

No fibre upgrade paths

NBN Co plans to complete its controversial network rollout next year but has not budgeted for major upgrades to its technology.

A 2020-23 corporate plan released last month did not detail any medium-term plans to upgrade satellite, fixed wireless or copper-reliant fibre-to-the-node connections.

These technologies provide slower internet access than fibre-to-the-premises and fibre-to-the-kerb.

Some in regional areas already complain of congested services on fixed wireless and satellite connections.

NBN Co's plan stated only that it was "investigating potential technological developments that may be available to deploy in the NBN network in the next 5-10 years".

At a conference in Canberra last week, Communications Minister Paul Fletcher indicated he wanted competition between networks to lead to technology upgrades.

NBN Co intends to finish the network build in June 2020. ( Supplied: NBN Co )

Finding more fibre

The NSW Government emerged as a potential provider for home internet upgrades this year.

It is spending $400 million over the next four years on communications — a domain traditionally funded out of Canberra — and Wamboin is one of its first projects.

Mr Barilaro's spokesperson said investment in large-scale digital infrastructure was "a new area for the NSW Government" but was confident the project would be delivered.

"The NSW Government recognises the hard work of the Wamboin Communications Action Group in advocating for their community and looks forward to working in partnership with the group to deliver reliable digital connectivity to the region," the spokesperson said.

However, Mr Gough fears the work the group had done to advance the project had been ignored, and it could be delayed, inferior outcome.

"The department is ignoring our business case and appears to be following a completely different path," he said.

"We appear to be sidelined as they don't communicate with us despite most of their 'team' being Sydney based and having little or no understanding of our non-urban environment."