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The problem you are getting is due to the fact the Cloudbase-Init installer from https://cloudbase.it/downloads/CloudbaseInitSetupStablex64.msi could not be downloaded.

Is your Windows host (from where you run New-WindowsOnlineImage) connected to the Internet and are the DNS servers set correctly?

You can test this assumption by executing from powershell or cmd shell:
ping cloudbase.it

Thank you,
Adrian Vladu

The problem you are getting is due to the fact the Cloudbase-Init installer from https://cloudbase.it/downloads/CloudbaseInitSetupStablex64.msi x64.msi could not be downloaded.

Is your Windows host (from where you run New-WindowsOnlineImage) connected to the Internet and are the DNS servers set correctly?

You can test this assumption by executing from powershell or cmd shell:
ping cloudbase.it

Thank you,
Adrian Vladu