News Analysis: Italy faces unique challenges in its super-fast Internet dream

Italian Prime Minister Matteo Renzi vowed this week to make Italy one of the world leaders in terms of access to super-fast Internet within the next three years. But it is not yet clear how the job will get done, or what will happen after that.

To be sure, the plan is an ambitious one. With 36 percent of Italian households having the option of Next-Generation Access broadband Internet services, according to European Union figures, Italy is among the laggards in the 28-nation bloc, where nearly two-in-three citizens have access to broadband. Broadband access in Italy is also more expensive than in other European nations.

Renzi would like to change that: he said Italy would spend as much as 12 billion euros (13.1 billion U.S. dollars) in a series of public and private initiatives to help Italy "leapfrog" to among EU leaders, skipping over intermediate technologies.

But the plan lacks details: a government statement calls Renzi's goal an "aspirational target," and though the prime minister said around a little less than 60 percent of the investment total he mentioned will come from the government and the rest from the private sector, there is so far no indication how the cash-strapped government will pay for its part or how it will direct the private sector for the investments needed.

There is also no word on how the country's broadband network will be developed, whether through using G5 cellular networks developing in China to connect users to the network, or using the power lines of former state electric utility Enel, by linking existing networks and creating incentives for them to expand to new areas, or some other strategy.

"It's a plan so far painted only in broad strokes," Raffaele Barberio, director of Key4biz, said in an interview. "But it is very important Italy takes these steps, which will create jobs, make conducting business easier, attract new companies, and spark economic growth."

But Barberio warned Italy faces some major obstacles in developing such a network in a relatively short time.

For example, the country is one of the few European states to largely miss the cable television boom that started in the 1960s. Those cables are how many countries deliver broadband service. That means Italy could skip that increasingly outdated technology, but it will require more work and cost more.

The country is also mountainous. That makes the logistical work much more challenging. Barberio estimated that 80 percent of the cost of spreading a network would be tied to logistics.

There are dividends to getting it done. The EU estimated that a 10 percent increase in broadband access helps a country's economy grow by 1 to 1.5 percent. But that depends a lot on how the broadband is used, according to Pietro Paganini, from the think tank Competere.

"Building a broadband network is like building roads," Paganini told Xinhua. "They are only useful if vehicles will use the roads. With the broadband, how will it be used? What will the content be? Broadband is a big part of the plan, but it's only the first part."

Paganini said that if this initiative helps to digitalize the country, then it makes a great deal of sense. He said that's where foreign expertise is most likely to come into play, digitalizing government records and the health care system, for example.

The banking system is another potential area, and the small- and medium-sized businesses that are the backbone of Italy's economy could become more digitally savvy, which would in turn make them more competitive beyond their current markets.

"With no content, a broadband network is next to useless," Paganini said. "With it, it can help transform a country." (1 euro = 1.09 U.S. dollars) Endit