The Council of Ministers has recently established the Digital Agency for Italy, which consolidates the functions of DigitPA - the national agency for digital technology in public administration - and the Agency for the Diffusion of Innovation Technologies. The move represents a further step towards an effective governance framework for implementing the digital agenda.

The package of measures ratified by the Council of Ministers mandates the new agency to manage information and communications technology for the public administration and to pursue the objectives of the digital agenda - details of the latter role will become clearer in the next few weeks with the implementation of the so-called Digitalia Decree. This development is part of a cross-sector economic programme that, among other things, seeks to improve competitiveness, stimulate demand and encourage entrepreneurship. However, it has specific implications for the telecommunications industry.

At present, the only resources that are certain to be allocated are a €700 million fund, ring-fenced for the call for tender for the 'smart cities' project in the northern-central region of Italy, and a €240 million fund for the centre-south. These relatively small funds are intended to achieve the network speed targets set by the European Union of 30 megabits per second (Mbps) for the entire population of Italy and 100 Mbps for 50% of the population by 2020.

As far as Italy's telecommunications networks are concerned, the government has a pot of €1 billion to spend on projects related to broadband infrastructure and the switch-off of public service broadcasting, as included in the new national telecommunications plan.

Forthcoming measures in support of the sector will make it easier to excavate for and install optical fibre lines and to access condominiums to make broadband available. Another innovation, which is ready for use, is the so-called 'subsoil cadastre', a register of cable ducts that should make it easier to reuse existing infrastructure, rather than undertaking new excavation work. This attempt to simplify statutory procedures supplements similar measures that have already been adopted, but are considered inadequate by the sector's key players. The case for a new measures to stimulate demand - in order to encourage customers to invest in faster internet connections - is being considered; Deputy Minister of the Economy Vittorio Grilli will make the final decision.

In addition to these specific measures, Prime Minister Mario Monti and Minister for EU Policy Enzo Moavero are working to carve out at least a partial exemption for broadband investments from Italy's national deficit and fiscal compact arrangements. This could prove highly significant, as approval at EU level would allow the Italian state to use national resources to co-finance the "Connecting Europe" facility. This European maxi-fund for infrastructure is worth €50 billion, of which €9.2 billion is to be allocated to investments in fast and ultra-fast broadband networks and digital services. Under a project being developed by the Ministry of Economic Development, industrial districts will be given priority to use resources recouped from the EU cohesion plan. Optical fibre will be the reference technology, but a mix of infrastructures will be needed in order to take account of the potential long-term evolution of mobile broadband.

Overall, there is a clear need to accelerate the development of Italy's telecommunications and digital technology sector. The picture emerging from the meetings of the digital agenda's steering committee is alarming and the government considers the provision of adequate infrastructure to be vital if the country is to make up ground in the proliferation of digital services. The European Commission wants 85% of the population of the European Union to be online by 2015; Italy lags behind at 51%, compared to 68% across the European Union.

For further information on this topic please contact Vittorio Noseda or Carlo Grignani at NCTM Studio Legale Associato by telephone (+39 02 72 5511), fax (+39 02 72 55 1501) or email ([email protected] or [email protected]).