Prime Minister Kevin Rudd has announced the first three regional Australian towns to connect to the National Broadband Network (NBN).

Smithton, in Tasmania's north-west, Midway Point, north-east of Hobart, and Scottsdale, north-east of Launceston, will be connected by the end of the year.

“Today, we are laying the first piece of optical fibre in our National Broadband Network, the first step towards pulling Australia out of the broadband dark ages and in to the digital economy of the future,” Rudd said on the weekend.

Rudd told a delegation in Hobart that the global economic recession poses real challenges and that investment in the NBN could create up to 25,000 new jobs.

Dismissing the allegation that the three Tasmanian towns were chosen because they were marginal seats, Rudd said the businesses in those towns deserve the same connectivity as the people in Sydney and Melbourne central business districts.

“What we want to see, for example, are small businesses in Scottsdale, in Smithton and Midway Point, being able to connect as rapidly as possible to new business opportunities on the other side of the world,” he said. “That is what it is all about.”

About 5000 homes will have access to the optical fibre broadband.

The Federal Government anticipates that the first fibre optic cables will be dug into trenches in August, the first homes connected by the end of the year and the new services to be switched on by July 2010.

Track the full roll out on our Australian NBN Tracker.