Ancona, Bologna, Catania
Mention the phonetic alphabet to a native-English speaker, and the first phrase that comes to mind is: "Alpha Bravo Charlie." It stands for ABC, and is used in the military to avoid miscommunication. It's also frequently used by anyone speaking on the phone (to a customer service represenative, for instance) to spell out words (or portions of those words) to confirm the correct spelling.
If it's necessary to sound out the spelling of a word in Italian, by convention the following cities (typically provincial capital cities)—or alternate terms—are most commonly used to refer to each letter of the alphabet. The list of cities is not fixed, though, and even native-Italian speakers sometimes disagree about which cities to refer to. Therefore instead of "Catania," one could also use "Como," "Capri" or any other well known location. The only rule is to avoid a letter/town combination that could be mistaken for a different pair.
Italian Phonetic Alphabet
A come Ancona
B come Bologna (or Bari or Brescia)
C come Catania (or Como)
D come Domodossola
E come Empoli (or Enna)
F come Firenze
G come Genova
H come Hotel (acca)
I come Imola
J (gei or i lunga) come jolly (the joker in Italian card games) (or Jugoslavia)
K (kappa) come Kursaal
L come Livorno
M come Milano
N come Napoli
O come Otranto
P come Palermo (or Padova or Pisa)
Q come Quaderno
R come Roma
S come Savona (Sassari or Siena)
T come Torino (Taranto)
U come Udine
V come Venezia (Verona)
W (vi/vu doppio) come Washington (Wagner)
X (ics) come Xanto (xilofono)
Y come ipsilon (York or yacht)
Z come Zara (Zurigo or zeta)

