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A fresh start for broadband? 'Unblock Italy' decree set to pave the way for faster connections

Italy's path to broadband nirvana isn't going to be an easy one, but the new government is hoping that tax breaks and less red tape can help speed the process.
Written by Federico Guerrini, Contributor

Launched in 2010, the European Union's Digital Agenda set some ambitious targets for both broadband coverage and penetration in all of its member states

Under the 10-year plan, by 2020, all EU residents should be able to access broadband services capable of delivering speeds of at least 30 Mbps; and, by the same year, 50 percent of households should be signed up to ultrafast connections that deliver download speeds of 100Mbps and beyond.

It will be very difficult for Italy to hit these goals, to put it mildly. According to the Digital Agenda Scoreboard published by the Commission last May, only 21 percent of households in Italy were accessing the internet at speeds of 30Mbps or above — compared to the European average of 62 percent.

Meanwhile, connections of 100Mbps were almost non-existent, accounting for around 0.1 percent of broadband subscriptions in the country. Even according to an expert advisory team appointed by the previous Letta government, "Italy's prospects are uncertain at best".

There is a glimmer of hope however in the form of a number of measures approved earlier this month by Italy's current government led by Matteo Renzi, as part of the so called 'Sblocca Italia' (unblock Italy) decree.

The law includes tax breaks for companies that invest in or deploy "ultrafast broadband networks" — of up to 50 percent of the cost of deployment — in areas where networks would not otherwise be rolled out, given the small market size and foreseeable returns.

There are some limits on the size of investmentsn municipalities with under 5,000 residents, a company can't invest less than €200,000; between 5,000 and 10,000 residents no less than €500,000

Not every investment can benefit from this allowance, however. To be considered, rollouts have to be new (meaning they are not included in any previous industrial plan) and be in line with the European Digital Agenda targets. There are limits too on how much must be spent: in municipalities with under 5,000 residents, a company can't invest less than €200,000; between 5,000 and 10,000 residents, it's no less than €500,000; and for those above 10,000, it rises to €1m. In the first case, operators have nine months to deploy the broadband network, in the second and third, 12 months.

The Sblocca Italia decree also contemplates some other measures — geting local authorties' authorisation to carry out the civic works needed to deploy mobile broadband infrastructure will be fast-tracked.

The plan, which has been called "experimental" and will run until 31 December 2015, comes after months of negotiations (rumours first suggested the tax break would cover the 70 percent of cost of ultrafast broadband network rollouts, then only the 30 percent, with the final agreement coming halfway between the two) and has been generally well received. Network operator Metroweb, through the voice of one of its main shareholders, Cassa Depositi & Prestiti, has already announced it is considering a new industrial plan to "accelerate investment".

Asstel – the association of all companies operating in the telecommunications industry – president Cesare Avenia also applauded the initiative, saying in a statement the law finally recognises the "role of private capital in reaching the European Digital Agenda's targets", and it has the "merit of systematising in a single law the techniques for deploying telecoms networks".

Not all comments were so positive, however. "First of all, it's not clear what it's meant here by ultrabroadband. I would say it's above 30Mbps, but it's arguable. Also, the concept of being in line with the Digital Agenda targets it's quite hazy, as it could be interpreted in several ways," Rossella Lehnus, a telecommunications expert in charge of strategic planning at the Ministry of Economic Development's inhouse company Infratel, told ZDNet.

Another cause of concerns is that how the decree is implemented in practice will depend on regulations that are expected to be approved next month by the Ministry of Infrastructure and Transportation (Mise), together with the Ministry of Finance and the Revenue Service. As common sense would suggest, bringing together three or more government bodies, each with its own interests and own distinctive approach to the topic, is probably not the best way to achieve fast results.

"This kind of process has caused so far only huge delays and inefficiencies for all these projects that are meant to transform the country. To unblock the investments with the speed Italy needs, it would have been better to bring innovation, as we had proposed, to the way the law is implemented too," Avenia said.

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