Telstra is conducting an audit into the practices of contractors upgrading pits as part of the NBN roll-out, after a Penrith resident contacted WorkCover concerned that asbestos safety procedures weren't followed.
Hundreds of residents and contractors may have been exposed to asbestos, stirred up and spread by workers who failed to follow safe handling guidelines, News Limited reports.
Work in the area was "immediately shut down", the contractor Service Stream was suspended and sites were "safely secured," a Telstra spokesman said in a statement.
"The safe and proper handling and disposal of asbestos is an absolute and not-negotiable priority," he said.
Telstra is hoping it will have sites cleaned up by Thursday and is seeking approval from affected residents to begin "comprehensive cleaning of their properties", he added.
As part of the national audit, Telstra will examine subcontractors' asbestos management procedures, compliance monitoring, asbestos awareness and competency, public notification where work involves asbestos and what action can be undertaken to remedy potential problems.
"We absolutely expect our contractors to get this type of work right each and every time so we are extremely concerned proper processes may not have been followed on a small number of occasions," Telstra chief operations officer Brendon Riley said.
"We are conducting this audit to ensure the law and our own strict guidelines are adhered to at all times."