BROADBAND POLICIES FOCUS ON THE ITALIAN GOVERNMENT ACTION PLAN Daniela Battisti Member of the Execut

1
BROADBAND POLICIES FOCUS ON THE ITALIAN
GOVERNMENT ACTION PLAN Daniela Battisti Member
of the Executive Committee for Broadband Action
Plan Ministry for Innovation and Technology
(Italy)
2
Agenda

• - Do we Need/Have a Broadband Definition?
• e-Europe2005 and the Sevilla Summit
• The Italian BB Action Plan
• Focus on Public Demand

3
TO BEGIN WITH
One day, the elephant said to the bird I wish I
had wings And the bird No problem. Just get
them! The elephant asked again But, how do I
get them? I do not know! I just do policies.
The bird exclaimed.
4
DO WE NEED/HAVE A BROADBAND DEFINITION ?

• Broadband communications refers to the
  technological enviroment that permits the use of
  digital technologies at maximum levels of
  interactivity
• (Source Italian Broadband Report, Feb 2002)

5
SHALL GOVERNMENT ENACT POLICIES TO PROMOTE
BROADBAND ?

• E-EUROPE 2005 ACTION PLAN (SEVILLA 21 JUNE 2002)
• ALMOST ALL EUROPEAN GOVERNMENTS ARE ADOPTING
  POLICIES TO PROMOTE BB BUT FEW HAVE AN ACTION
  PLAN
• THE ITALIAN BB ACTION PLAN (PHASE 1,2, 3)

6
BB APPROACH IN ITALY

• Accordingly, the development of broadband in
  Italy is considered an economic policy objective
  priority.
• In such an environment, the Government must
  intervene to ensure that the development of
  broadband is as homogeneous and rapid as possible
  nationwide.

7
The Principles for Action (Italy)

• Government has included the Broadband Plan in the
  Economic and Financial Planning Document for the
  period 2002-2006.
• Plan will 1) assess, 2) identify the key
  importance of broadband, 3) formulate measures 4)
  ensure implementation
• Interministerial Broadband Task Force, (1st phase
  executed), has reaffirmed that BB is a
  prerequisite for the economic development of the
  country.
• Objective of 2nd (current phase) is to formulate
  a plan.
• 3rd phase will consist of the implementation of
  the plan itself.

8
3 Main Macro-phases
1
2
3
Macrophase
Vision
Planning
Implementation
Owner
Executive Committee for the definition of a
Broadband Plan for Italy
(to be defined))
Broadband Task Force
...
Time horizon
June 2002
...
March 2002
September 2001
Medium-term operational projects and rapid
actions (pilot projects)
Deliverables
Broadband Plan
Broadband Report
Final phase
9
What Actions can ensure BB Development by 2005
Snapshot of situation hitherto
Current situation (planned)
Additional actions
Objectives
Levels of interactivity evolution over time
INFRASTRUCTURE
INFRASTRUCTURE
PLANNING OF ACTIVITIES
PUBLIC SECTOR DEMAND
PUBLIC SECTOR DEMAND
MECHANSISMS FOR IMPLEMENTATION
PRIVATE SECTOR DEMAND
PRIVATE SECTOR DEMAND
MECHANISMS FOR CONTROL
Evaluation of the impact on productivity and the
national income
The objective of the plan is the development of
the market within the established time frame
(2005)
10
The achievement of objectives requires public
intervention to enhance infrastructure and
generate public and private demand

• 85-90 of government buildings
• 65 of businesses
• 35 of households

Lines of intervention

• generate incremental investment by private-sector
  operators over and above that invisaged in
  current declared business plans
• generate an incremental market which will
  create a substantial and permanent increase in
  tax revenues

11
The special nature of the Italian infrastructure
situation makes enabling and stimulus action
essential
A
Infrastructure
technological

• Lack of alternatives to copper-based connections
  for access networks and, particularly, the
  absence of cable modems
• Copper-based network delivers better performance
  than the European average (better quality, lower
  average distances in the local loop)
• Development of fibre optics could be fostered
  using existing conduits owned by the incumbent
• The building of extensive enabling infrastructure
  for the development of WiFi
• The development of experimental telecommunication
  services that are delivered through the
  electricity grid

Special nature of Italian infrastructure
competitive

• A sufficient level of competition has not been
  reached in the market,

Enabling and preliminary actions
Regulatory measures
Administrative simplification
Necessary actions
Stimulus activities
12
Actions to boost private demand are aimed at both
consumers and businesses producing content,
services and applications
B
Private Demand

•  
• Public support for the production of content,
  services and applications
• Support the expansion of demand for services with
  a high degree of interactivity

Objectives
Supply-side fiscal measures
Demand-side fiscal measures
Funding

• Incentives to content, service and application
  producers using measures similar to those
  introduced by the Tremonti bis law

• Fiscal incentives to consumers in the form of tax
  endowments

• Use of Community financing (participation in
  eEurope projects)

Actions
13
Public demand is essential for the development of
Broadband
C
Public Demand

• Public demand
• Brings about an expansion in direct demand from
  government offices as well as indirect demand
  from the users of the applications
• Demonstrates the utility of new technologies and
  improves the likelihood of them being taken up
• Creates a critical mass, including in those areas
  where the market is least developed, which
  fosters the supply of connectivity, services and
  applications, and reduces prices

Role

• The potential of public demand can be tapped by
  using demand aggregation methods
• Public demand should be able to make use of
  structural funds and other available sources of
  European financing (Ten Telecom, IDA, IST, etc.)
• The objective is to take some of the funds set
  aside for the development of the information
  society and channel them into projects that will
  bring broadband to the most disadvantaged areas
• The Department for Innovation and Technologies
  must act as a coordinating body to avoid
  duplication,, encourage cooperation, capitalise
  on the intersectoral features of the projects of
  other government departments and maximise
  synergies.

Actions
14
To act as a stimulus, public-sector demand must
expand from current broadband coverage of 20 to
more than 80 by 2005
C
Public Demand
Current situation
Objectives
Number of buildings
Narrowband
Broadband
Narrowband
Broadband
Central govt 1
10,000
6,300 (63)
3,700 (37)
500 (5)
9,500 (95)
Local govt 2
13,000
7,900 (61)
4,300 (33)
1,000 (8)
12,000 (92)
Schools3
42,000
34,500 (82)
7,500 (18)
6,500 (15)
35,500 (85)
NHS buildings4
20,000
18,600 (93)
1,400 (7)
3,000 (15)
17,000 (85)
Total
85,000
67,300 (79)
16,900 (20)
11,000 (13)
74,000 (87)

• Source CT RUPA and individual departments
• Source individual regions
• Inclusive of central and local governments.
  Source Ministry of Universities, Education
  Research (targets set on basis of eEurope 2005
  plan)
• Source Ministry of Health (targets set with
  reference to strategic goals of National Health
  Plan and eEurope 2005)
• Figures compiled by Roland Berger Strategy
  Consultants

Increase by 2005 of broadband coverage of
government from current level of 20 to 87,
with at least 15 of connections at speeds over 2
Mbit/s
15
The actions will have an impact around the
country, especially in areas with the lowest
development potential
Preliminary
16
The Government will provide 1,200 million in
funds for public demand and 600 million for
infrastructure building and private demand
Cost of Incentive Plan

• Economies achieved by demand aggregation

Incremental spending 2003-2005 (millions )
200
State budget
Local gov budget
Total
1,200

• Public demand entails total costs of 1,000
  1,200 million, with reference to the savings
  achieved through demand aggregation

Central govt
150
150
Public demand
Local govt
150
150
1000
Schools
550
100
650
Hospitals
250
250
Total
700
500
1,000 1,200
Private demand

• Total investment 100 million (minimum value)

100

• Total investment of 500 million to leverage
  private resources worth 2,500 million

500
Infrastructure
The resources activated make it possible
eventually to achieve tax revenues sufficient to
ensure full coverage of the costs incurred
17
Public sector demand is one of the main levers
for the development of the BB market, calling for
models of demand aggregation
Public sector demand / and broadband

• ALL ACTIVITIES
• Mapping public sector demand for connectivity
  (Unified Government Network (RUPA)-Regional
  networks- e-government in local authorities), and
  digital services, and mapping the related
  implementation plans (drafted by the Department
  for Innovation and Technologies, other branches
  of central government, the regions and
  e-government in local authorities)
• Processing of information received and
  identification of current and projected public
  sector demand in terms of advanced interactivity
• Selecting models for actions (demand aggregation)
• Incidence of public sector demand on the economic
  situation of operators (business plan) and the
  planning of actions

Public sector demand
ACTIVITIES UNDERTAKEN TO DATE
Mapping central and local government departments
Demand aggregation
18
Regions/Local Government were Requested to
Provide Detailed Information
8,100 municipalities have been addressed all
the Regions
19
Mapping Public Administration is a Key Step
Mapping of Unified Government Network (RUPA)
Main peripheral offices of ministries, local
non-economic government bodies and other agencies
Geographically referenced database
All offices of ministries, local non-economic
government bodies and other agencies
Ministries

• Ministry of Education,
• Universities and Research
• Ministry of Justice
• Ministry of Health
• Ministry for the Economy

Direct involvement in Public Demand Committee
20
While Contributing to the Acceleration of BB
5
Impact on the market for broadband services of
combining public with private-sector demand
4
Possibility of defining minimum bandwidth
standards for the entire public administration
Benefits of aggregating public sector demand for
broadband services
3
Greater penetration of broadband in the public
sector at low operating costs
2
Increase in demand for broadband fromwithin the
public sector
1
Greater efficiency in government procurement and
consequent economies of scale
21
This telephone has too many shortcomings to be
seriously considered as a means of
communications. The device is inherently of no
value to us -- Western Union 1876

• Broadband
• In the absence of substantial demand
• does it matter?
• We believe it does