Italy Approves $6.7 Billion Plan For Ultra-Fast Broadband Grids

Italian Prime Minister Matteo Renzi’s cabinet approved a plan to use 6 billion euros of public funds ($6.7 billion) to encourage phone carriers to boost high-speed networks in the country.

The six-year initiative, announced by Renzi’s undersecretary Graziano Delrio on Tuesday, won’t require Telecom Italia SpA, the country’s biggest phone company, to carry out a mandatory switch off its copper network and convert to fiber. All 6 billion euros from European Union and Italian funds will be used for the investments and operators will be offered incentives to upgrade their networks.

“This plan is based on the principle of technology neutrality,” Development Minister Federica Guidi said at a press conference in Rome. “The market will choose the technology in order to achieve European digital agenda targets.”

Bloomberg News reported the government initiative in January.

Telecom Italia and Vodafone Group Plc’s local unit are among companies that may benefit from the plan as more Italians download content such as videos on smartphones and tablets, putting a strain on carriers’ networks. Fewer than 1 percent of Italians with an Internet subscription receive connection speeds of at least 30 megabits a second, according to Italy’s communications regulator. That compares with the European average of 21 percent.

The government’s project aims to develop 100 Mbps web-services in the most densely populated areas such as Milan and Rome and at least 30 Mbps services for other regions.

Italy will use auctions to build ultra-high speed networks, awarding bids to operators on the basis of how fast the work can be executed rather than the cost.

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