Cuba: No deal with US telecoms

Other U.S. lawsuits in recent years have resulted in hundreds of millions in judgments against the Cuban government, which is squeezed for cash and wary of additional financial liability that might result from new deals with American companies.

Cuba currently ranks among the least-connected countries in the hemisphere, with 12.6 phones per 100 people, according to United Nations data. A limited number of Cuban professionals have access to the internet, but mostly in their workplaces, where communications are often monitored. An hour of achingly slow web access at a tourist hotel can cost more than a week’s salary for the average Cuban worker.

Cuban mobile phone communications aren’t much better. Though President Raul Castro overturned a ban on ordinary Cubans owning mobile phones last year, rates for local calls are roughly $0.50 per minute. A call to the U.S. costs more than a dollar a minute, and there’s little alternative for keeping in touch with relatives in Miami or Spain, since the popular voice-over-internet program Skype was blocked by the Cuban government over the summer.

The Obama administration’s move gave permission to American telecommunications companies to install fiber-optic cable and satellite links between the United States and Cuba. It also allows for roaming agreements between U.S. and Cuban mobile phone providers, while enabling U.S. residents to pay for American satellite radio and television services for Cubans, which are generally illegal on the island.

The measure was part of a package of reforms that made it easier for Cuban Americans to visit their relatives and send financial assistance. Other steps to improve communication, such as a proposal to resume direct mail service between the two countries, are under consideration as part of a general U.S.-Cuba thaw.

"We stand on the side of having more information rather than less information reach the Cuban people," said Dan Restrepo, an Obama adviser, at the time. Obama’s directive made no mention of ETECSA’s frozen funds.

Not surprisingly, Cuba continues to blame many of its communication shortfalls on U.S. trade sanctions that have historically tried to isolate the country. “Cuba only has one line of communication to the rest of world, and that’s through satellite,” said ETECSA marketing director Jorge Luis Lerga, in an interview Sunday on state television. “Its capacity is 10 times less than an international fiber optic cable,” he said.

Cuban ally Venezuela is spending $63 million to stretch an undersea fiber-optic cable across the Caribbean to give the island a better link to the world, though that project is not expected to be completed until 2011. Legra said ETECSA was working to upgrade capacity with the goal of offering home-based internet service to more customers, but he did not give further specifics.

Given that Florida is just 90 miles away, a connection to the U.S. would be a far more practical option for Cuba. Last week, a small Miami-based company, TeleCuba Communications Inc, announced it had obtained U.S. permission to lay a fiber-optic cable to the island, but statements by ETECSA executives suggest that deal is likely to face similar obstacles.

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