December 23, 1999 Web posted at: 10:59 a.m. EST (1559 GMT) by Philip Willan

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ROME (IDG) -- The Italian state broadcaster RAI has signed an agreement with E.Biscom, a Milan-based telephone and Internet company, to launch Italy's first interactive broadband Net portal, a RAI spokesman has confirmed.

"We have signed a memorandum of understanding with E.Biscom, a company that has already laid fiber-optic cables in Milan and is currently cabling the rest of the Lombardy region," said RAI spokesman Giuseppe Nava. "The real novelty is interactivity. We are planning to launch a kind of pay-per-view service on the Internet in the near future."

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Under the agreement, RAI will provide programming while E.Biscom will offer fully interactive broadband video through its Fastweb subsidiary. The memorandum of understanding provides for the creation of a joint venture, 60 percent controlled by RAI and 40 percent by E.Biscom.

The agreement leaves RAI free to license its programming to other Internet providers, while E.Biscom is free to purchase material from other content providers.

The new company will allow customers to access the Internet at up to 200 times current connection speeds and to view films with a high-quality image on their PC screens, the companies said in a prepared statement. The portal will offer news, sport, entertainment, music and community services, as well as opportunities for electronic commerce, the statement said.

"The quality of the picture will be that of a good VHS video recording, slightly inferior to that offered by RAI but similar to the quality of many Italian private broadcasters," Nava said. "Because E.Biscom has its own cables, customers will be able to remain online 24 hours a day without occupying their phone line or having to pay for the phone time."

In another development, the board of Telecom Italia approved the company's Nautilus project to create a 7,000 kilometer undersea fiber-optic ring linking Italy, Israel, Greece, Turkey and Egypt, the carrier announced.

"Nautilus will supply international connectivity for high-speed Internet, voice, data and imaging services, plus hosting services, to carriers, Internet service providers, content and application providers and multinational clients," Telecom Italia said in a prepared statement. "With a 1.28-terabit-per-second capacity, the network will be able to carry over 1,000 billion bits of Internet traffic per second, 15 million contemporary telephone calls or 100 hours of digital video per second," Telecom Italia said.

The demand for telecom services from the Eastern Mediterranean countries of Israel, Egypt, Turkey and Greece is expected to exceed $2 billion by 2006, Telecom Italia said.

Nautilus will be controlled by Telecom Italia but open to other financial and industrial partners, the Milan business daily Il Sole 24 Ore has reported.

Telecom Italia has been negotiating with a major U.S. networking company in connection with the Nautilus project, the paper said. "All the signs point to Lucent Technologies, the world's number one in fiber-optic networks and switching systems," according to Il Sole.

The number of Italians surfing the Web has increased by 40 percent over the last six months to reach 7 million during the last month, the Weekly Observatory of the Web reported today. The report, quoted by the ANSA news agency, said 4.8 million Italians who have never used Internet intend to do so over the course of the next year and 6.1 million expect to increase the frequency of their Internet use.