Sinking the Internet
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Interview with Claudio Messora:
Someone once said that the Internet has been the greatest invention since Gutenberg’s invention more than 500 years ago. The reality is that, above all else, the Internet has had an impact on our world maps. It has made the Earth flat. It has brought peoples and towns closer together. It has succeeded in building countless bridges that can be crossed at the speed of light. For this reason, the Internet can be equated with the discovery and marketing of electric power, which also, at the time, sparked off new thoughts and ideas by lengthening working hours thanks to the advent of electric light, enabling the construction of exceptionally tall skyscrapers thanks to the development of powerful and tireless elevators, driving the electric motors that speeded up the production rates of industries and powering things like radio and television. The Internet is not a thing or a place. It is a multiplication factor. It is pure thought, fixed in time like a rocky landscape painting and transported instantly at the speed of light. The Internet is like the addition of telepathy to the human senses, the tele-transportation of intelligence, a construction site where everyone adds and continuously shuffles around their own little brick and then leaves it there at everyone else’s disposal.

What use is the Internet?
While this would be sufficient in itself to convince us to invest in the Internet, there’s still more. The business world and, therefore, the world of work is the greatest single beneficiary of the development of the Internet. In the McKinsey Global Institute study entitled “Internet matters: the net’s sweeping impact on growth, jobs and prosperity”, it is estimated that there are currently some 2 billion Internet users worldwide and that each user generates twenty Euro per month of added value. In the case of 13 Countries analysed, the Internet accounts for some 3.4 points of GDP, a percentage that is greater than that generated by both the agricultural and the energy sectors and, for example, in the case of the so-called “mature” economies (Sweden, Germany, the United Kingdom, France, the USA, South Korea, Canada, Italy and Japan) the Internet accounts for as much as 21% of the total GDP growth in the past five years. In the interests of clarity, the Internet’s contribution to growth in the GDP amounts to some 6.3% in Sweden, 5.4% in the United Kingdom, 4.6% in South Korea, del 4% in Japan, 3.8% in the United States and so on, down to 1.7% in Italy, 1.5% in Brazil and 0.8% in Russia. On a global scale, instead, it is estimated that the Internet’s contribution to GDP is at least 2.9%, or equivalent to 1672 billion Dollars. The global consumption and production generated by the Web in 2009, for example, was greater than Canada’s or Spain’s entire GDP, and grew at a faster rate than that of Brazil. For every job that it has contributed to eliminating, the Internet has created 2.6 new jobs, however, it is interesting to note that the primary beneficiary of more than 75% of all the added value created by the Web has been the world of traditional industry, mainly thanks to increases in productivity. Furthermore, the Internet generates a 10% increase in productivity for small to medium-size enterprises. Those enterprises that make extensive use of Web technology are growing and exporting at twice the rate of the other enterprises. Perhaps that is why, in its Millennium Development Goals, the United Nations Organisation has highlighted Internet penetration as a key factor in the ongoing battle to reduce poverty and encourage sustainable development.
Over and above the key role that the Web plays in global democratisation, these figures alone should be sufficient to pressure governments to want to optimise their participation in the Web ecosystem. However, encouraging the use of the Internet is merely the first step towards halting public spending. We need to train our human resources, allocate our financial resources, build infrastructure and prepare the ground so that the business world can grab the opportunities presented by innovation. How are things here in Italy in this regard?

The current Internet situation in Italy
In its report entitled “The Global Information Technology Report 2010 – 2011”, the World Economic Forum defines competitiveness as a combination of policies, institutions and factors that determine a Country’s productivity. Just think that, in 2015 alone, just the opportunities offered by the development of digital superhighways will be worth something like 1900 billion Dollars yet, out of 138 economies examined in the study, in response to the question “Are you ready for the Web?”, Italy scored a mere 4.0 points, placing it in 51st place. Things get even worse when you look at the utilisation of the Web by companies in the various Countries, where we are in 71st place. And where do we stand with regard to our ability to create new business models and new products and services by exploiting the potential of the Web? All the way down in 88th place, that’s where! We drop even further when you do a comparison of each economy’s ability to utilise information technology to create new organisational models, in fact we drop down to ninetieth place!
In order to pressure individual Countries that are lagging behind in the digital stakes, the European Commission has drafted the “ Digital Agenda for Europe”, with the aim of maximising the economic and social impact of the Internet, which is considered to be an essential tool for business and social enterprises and the world of business, employment and communications. In its main report, the EU points out that (as further confirmed by the Caio Report) 12% of the Italian population still has no form of physical connectivity to the Internet. Here we’re talking about some 7.5 million citizens! Furthermore, it appears that no less than 36% of the population has never browsed on the Web at any stage in their lives! 55 Out of every 100 families have Internet access, only two of which by means of a UMTS Internet Access Key (3G), however, we are fourth to last when it comes to regular Internet users, where we currently stand at 40%, only slightly ahead of Greece, Bulgaria and Rumania, although all three of the aforesaid Countries, namely Greece, Bulgaria and Rumania are showing a higher growth trend than Italy in this regard. Bulgaria is currently achieving 17% growth in Internet use per year, compared to our meagre 4%.
According to data gathered in January 2010, the rate of broadband penetration is greatest in Denmark, with 37.8% of internet connections. Could this be why they have just elected a young government, with a Minister of Finance who is only 26 years of age? The average in greater Europe, where there are some 123,738,940 broadband lines, a number that is increasing by 28,199 each day, currently stands at 24.8%. We are currently in seventeenth place with 18.7%. According to the Eurostat data (2009), in Iceland 87 out of every 100 families have a broadband connection. Could this be the reason why the newly revised Icelandic Constitution was born precisely on the Web? At the global level, only Korea has been able to keep up with the Icelanders, with 81 families out of every hundred having a broadband connection. Then comes Sweden with 79 families out of every hundred, Norway with 78 and then, in 28th place, along comes Italy, where only 38 families out of every hundred have access to a broadband connection.
But how is this broadband market actually growing? The penetration rate between January 2009 and January 2010, calculated on the basis of countries where the markets are still deemed to be immature, shows Cyprus in first place at 4%. Slovakia and Greece have a low penetration rate that is below the current average but, on the other hand, they are showing an extremely high rate of growth. Austria, Spain, Rumania, Lithuania, Poland, Latvia, Slovenia, Bulgaria and – of course – Italy have shown a growth rate of between 1 and 2 percentage points, having failed to match the European average and even managing to fall back. Surprisingly, we are told by the European Commission that there are several economies with some of the biggest drops in GDP as a direct result of the crisis, drops worse than that of the European average, where the landline broadband markets have grown at a higher rate than the European average (for example, Slovenia, Greece, Hungary, The Czech Republic and Germany), while in Countries such as Belgium, Spain, Austria, Poland and Italy, which have shown a slower decline in GDP, the rate of growth in the landline broadband markets has been much lower. The growth in the fibre-optic cable market in Japan and Korea has been exceptionally high, while the lowest rate of growth in this very same market has been registered right here in Europe. In June 2010, broadband in Europe consisted mainly of DSL lines, with 81% of all connections, fibre-optic with 2% and other technologies with 19%, but what about here in Italy? Here in Italy DSL rules the roost almost unopposed with 98% of all so-called broadband connections. I say “So-called” because although the average nominal speed of Italian broadband is sitting at around 20% below 2 Mbps, 70% between 2 Mbps and 10 Mbps and about 9% above 10 Mbps, the reality is that in no less than 120-thousand tests conducted by “Between”, have revealed that the actual performance of Italian broadband run at no more than 55% of the contractual speed claimed by the service providers, who always quote the maximum speed without fail. Thanks to Wikileaks, we were able to view a confidential document drafted by Italian Internet technology consultant Francesco Caio, which revealed that the much vaunted high-speed ADSL connections were nothing more than fraudulent advertising and statements to the effect that the Italian Network is very outdated and rather unstable. Perhaps that is why the Broadband Quality Score study conducted in 2009 by the Oxford University, and the Oviedo one based on more than 24 million actual measurements done by SpeedTest.net and regarding the key factors like upload speed, download speed and latency, placed Italy in a lowly thirty-eighth place. That is lower (indeed much lower) than Countries such as Qatar, Cyprus, Bahrain, Latvia, Estonia, Lithuania, Malta and so forth. Also based on similar measurements, netindex.comshows that for the past 30 days we have been sitting in 70th place as regards real download speeds, which is even lower than China! Furthermore, Italy is in 109th place as regards upload speeds, in other words the speed at which we are able to upload our content onto the Web.
Perhaps that’s why Italians seem to use the Web mainly to find information relating to health and for healthcare related services. Then perhaps to find work, then to access news and only then to download games, pictures, films, and music. Almost 90% of internet users use one of the Internet’s main functions, namely sending and receiving e-mails. As regards e-commerce, we are only in 22nd place, in other words sixth to last, above the usual culprits like Estonia, Greece, Lithuania, Bulgaria and Rumania. The same goes for companies that use e-commerce for more than 1% of their sales or purchases: here we are third to last, marginally ahead of Bulgaria and Rumania! Even as regards the growing trend in e-government, Italy is nowhere to be found on the list of the Top 20 Countries.
Yet, on page 43 of its study entitled “Economic Impact of Broadband”, even the World Bank acknowledges that each 10% additional increase in the diffusion of broadband generates a further 1.21% increase in GDP. In the report entitled "Network developments in support of innovation and user needs", drafted by the OECD in 2009, and confirmed by Confindustria’s “Progetto Italia Digitale 2010” it is stated that the savings associated with the creation of a good digital infrastructure would amount to some 40 billion Euro per year, made up as follows: 2 billion due to people working online from home, 1 billion 400 million due to e-learning, 16 billion due to e-government and digital company trading, 8 billion 600 million due to digital healthcare, half a billion due to digital justice and security and another 9 and a half billion due to intelligent energy management. This data has been confirmed by a study undertaken jointly by the “Boston Consulting Group” and Google, called the “Fattore Internet 2011”, according to which even a 13% to 18% broadband growth rate would equate to real economy growth of between 59 and 77 billion Euro (a GDP increase of somewhere between 3.3% and 4.3%). And all of this, according to a recent study conducted by Alcatel-Lucent, at a total cost of no more than 10.4 billion Euro, even if we were to lay fibre-optic cable throughout the whole of Italy, including the islands, made up as follows: 2 billion 200 million Euro to take fibre-optic cable services to the 5 and a half million citizens living in urban areas, 7 billion 200 million Euro to take fibre-optic cable services to the 14 million people living in suburban areas and finally one billion Euro for the people living in rural areas. So why on earth has the Italian Government not yet jumped on the band wagon and invested in the Web, especially at a time like this when the traditional economy is in such a deep crisis?

The Internet and Italian politics
Basically it all began with the Prodi Government. Tommaso Padoa-Schioppa’s 2008 budget allocated some 800 million Euro of funding for the establishment of broadband infrastructure. Then the government fell and nothing was done about it, although the al location remained intact. Then along came Paolo Romani, the then Deputy Development Minister responsible for Communications who, in June 2009, announced a plan that bore his name, the so-called “Romani Plan”. The plan involved taking broadband services with a minimum speed of 20 Mbps to 96% of the population , as well as a connection with a minimum speed of 2 Mbps to the remaining population. So, on 9 June 2009, Deputy Minister Romani said the following: “Eliminating the digital divide in Italy is going to cost us 1.471 billion Euro. By the end of 2012, every Italian will be able to connect to the Internet at a speed of between 2 and 20 Megabits per second. This will be mainly by means of fibre-optic cable”. The one and a half billion would be made up of 210 million of private investment plus one billion 160 million of public funding, which would include the famous 800 million previously allocated by Tommaso Padoa-Schioppa, as well as another some other money obtained from the FAS funds, namely the European funding for depressed areas.
Art.1 of Law No. 69 of 18 June 2009 states that: “The Government hereby identifies and grants the Interministerial Financial Planning Committee (the CIPE) the necessary resources approved for this purpose and to supplement the public, private and EU funding. We hereby allocate the sum of 800 million Euro for the period 2007-2013 to be added to the resources of the fund to benefit underutilised areas”.
On 19 October Renato Brunetta stated that the broadband plan was ready and that “all it needs is the final push". By around October or November we should get the go-ahead from the CIPE. I’m counting on providing everyone with 2 Mega of broadband with effect from 2010 because an efficient Internet service is the only way to send certified documents and bring about change in our current bureaucracy”.
Less than two weeks later, on 4 November 2009, the incumbent Undersecretary to the Prime Minister, Gianni Letta, announced that the plan and the funding would remain with the CIPE but had been frozen due to the economic crisis and the fact that broadband services were not a priority.
On 17 September 2010 came the announcement of a definite reduction of those allocated funds from the original 800 million down to a mere 100 million, of which half would be national government funding and half Regional Administration funding. Officially, it was rumoured that this investment was an expense that should rather be avoided rather than a development opportunity. In all probability, the small change that remains will be diverted to connect 73 industrial districts by means of fibre-optic cable, once again leaving Italian families out in the cold and notwithstanding Brussels’ recommendations regarding new-generation networks (or so-called “NGN”s).
On 9 February 2011, immediately upon leaving a Council of Ministers meeting, Paolo Romani was in the mood for announcements. He stated that: “Today we begin on the path towards broadband. Together with Minister Tremonti, we have decided to allocate 100 million Euro to the FAS funds in order to totally eliminate the digital divide by the middle of next year”.
Yet only one week later, digging through the Consolidation Decree, we read that “An amount of 30 million Euro has been approved for the 2011 financial year to re-finance the fund aimed at moving towards the terrestrial digital service. These funds are being allocated as part of the resources set aside for broadband services by Law No. 69 of 18 June 2009, within the overall amount resolved by the CIPE on 11 January 2011". So the funding for broadband services, already heavily plundered and reduced from 800 to 70 million has now been taken away from the Internet and given over to television broadcasting, but why? Could it perhaps have something to do with the fact that both Silvio Berlusconi and Paolo Romani are television magnates and that the Web could potentially water down their advertising revenues and could also prove to be a dangerous competitor working against their pluralistic plan for guiding public opinion?
The fact remains that while Italy remains on the starting line, condemned to continue dropping down in the International ratings in terms of Internet penetration and the quality of the Country’s Internet connections (which has already relegated us to second last place as regards work from home, just above Portugal in fact), between 2006 and 2011 successive colluding governments have succeeded in tabling no less than twelve anti-Internet laws.
In 2005 there was the Pisanu Decree, which condemned our Country to digital marginalisation as regards Wi-Fi connections. Then in 2007 came the Franco Levi Law, which expected anyone who wanted to post anything on the Web to register with the Communications Operators Register (the ROC). Then the 2007 Gentiloni Decree, which established and funded the so-called CNCPO within AGCOM (the Italian broadcasting oversight body) with the aim of eliminating online child pornography. The CNCPO was to force Internet Service Providers to censor any content that they deemed to be unsuitable for publication, this without going via the Magistrature. In September 2009, Pecorella wanted to add another clause to article 1 of the Press Law (1984), to extend the applicability of that same regulation to websites of an editorial nature. In January 2009, Luca Barbareschi also added his bit by trying to apply iron fisted rules to protect author’s rights on the Internet and also to make the Sarkozy doctrine, which provided for the forced disconnection of citizens from the Internet, applicable here in Italy too. The guy we’re talking about here is the very same Barbareschi who was won’t to use Spinoza.it cracks on his LA7 programme. Then, in February 2009 Udc Senator Giampiero D’Alia wanted to prevent any form of apologetic or instigation activity from being conducted online. To this end, he wanted to grant extraordinary powers to the Ministry of Internal Affairs so that they could issue immediately executable circulars forcing internet service providers to black out any website arbitrarily deemed to be dangerous for Italian laws. Then along came the Carlucci Law, which wanted every single bit of data that crossed the Web to have its own ID document. In December 2009, that very same Paolo Romani who promised us a broadband service that never materialised, mangled a European Union Directive so as to equate anyone who simply uploaded a video clip or did any audio or video live streaming on the Web, even if it was merely a chat with the girlfriend, with the major television editors, with all of the consequent obligations. Still in December 2009, Maroni drafted a Code, the infamous Maroni Code, which was a government decree to stop violence on the Web. The decree never materialised, but what did happen was that Maroni had meetings behind closed doors with the administrators of the most widely used social networks, to discuss heaven alone knows what, because we don’t! Shortly thereafter, a high ranking Postal Police Officer let slip that a number of his people had been to Palo Alto, California to pick up the keys to some 20 million Italian Facebook accounts, thus enabling them to carry out an infinite number of checks, supposedly also to protect the honour of people in the public eye, or so-called VIPs. In December 2009 came Lauro’s proposal that the Internet be viewed as an aggravating factor in cases where individuals are charged with encouraging violence and raising the potential maximum penalty to 12 years if the crime is committed via computer. Since 2008, the infamous clause 29, carefully hidden inside the Wiretapping Decree has been terrorising the Web because it essentially applies the same retraction obligations that were spawned some 70 years ago specifically for the press on all websites, carrying the threat of fines of up to 12,500 Euro. The issue of the AGCOM’s author’s rights regulations, which aim to give anyone the right to have any Web content that they deem to be unacceptable removed from the Web, without even having to go via the Magistrature to confirm the validity of the complaint, is still pending..
Meanwhile, in Finland, access to broadband has become a constitutional right, just like access to water and access to electric power. Everyone is entitled to have a 100 Mbps connection by no later than 2015. In Germany, 75% of homes will have the same by 2014 and France is busy investing 10 billion Euro to service 4 million households by 2012. And while the Indian institutions view the e-tablet as a useful tool for education purposes and are therefore handing out thousands of these units to students, free of charge, and are counting on having handed out a million units soon, here in Italy the most innovative plan they have come up with is the plan funded by no less than 17 newspapers and 34 banking foundations, namely to provide youngsters at school with printed newspapers. Don’t you think that perhaps they could be doing just a tad more?