Cuba still wary of U.S. telecom and Internet offers

After a second round of meetings in Havana, Daniel Sepúlveda, the U.S. point man on telecom policy toward Cuba, says the United States feels an urgency to make progress and sign deals while President Barack Obama is still in office but Cuba appears to want to take its time.

Sepúlveda, the coordinator for international communications and Information policy in the State Department, led a 14-member delegation that held talks Wednesday through Friday with their Cuban counterparts to discuss U.S. regulations that allow American telecom and Internet companies to engage in a wide array of commercial activities on the island — if Havana wants to take them up on their offers.

Cuba has one of the lowest connectivity rates in the world, and only an estimated 5 to 25 percent of Cubans have any type of Internet service.

Both sides categorized the talks — the first since March — as positive, and Sepúlveda said U.S. companies continue to visit the island in hopes of striking deals that would improve telecom infrastructure and Internet connectivity for Cubans.

“We’re doing as much as we possibly can on our side. At this point, the biggest thing that is missing is trust” -- on both sides, Sepúlveda said Monday in an interview with the Miami Herald and El Nuevo Herald.

New U.S. rules allow American companies to sell personal communications equipment in Cuba, work on joint ventures with Cuba’s telecom monopoly ETECSA to improve the island’s outdated Internet and telecom infrastructure and open offices in Cuba and hire Cubans to staff them. The new regulations also mean that a U.S. company could, for example, hire a private Cuban coder or other service provider.

In all its recent dealings with the United States, Cuba has emphasized its priority is an end to the embargo, and in a Foreign Ministry statement at the end of the telecom talks, Cuba mentioned “the limitations of the new regulations adopted for this sector by the U.S. government.”

Sepúlveda, however, emphasized that the new telecom regulations were more open that those for any sector that the United States permits to do business with Cuba.

The U.S. delegation also included Thomas Wheeler, chairman of the Federal Communications Commission; Dean Garfield, president of the Information Technology Industry Council, and representatives from Cisco Systems, Comcast, the North American division of Erisson, a Swedish communications company, and other government and industry officials.

“The hunger on this side — from business — is big,” said Sepúlveda.

He said there are at least a half-dozen proposals — both by U.S. and non-U.S. companies — to construct a North-South undersea fiber optic cable between the United States and Cuba. Currently, Cuba’s only connections are through satellite and an undersea fiber-optic cable that links the island and Venezuela.

Sepúlveda said successful deployment of Internet networks anywhere in the world have included three elements: an attractive environment for direct foreign investment, investments in infrastructure and joint ventures — particularly for wireless.

The Cuban government has said that its goal is to offer Internet to 50 percent of households by 2020 and to have 60 percent mobile penetration by then.

The feedback the U.S. delegation got from the Cubans was they would take the cable and other joint venture overtures under consideration, but that the Internet/telecom industry wasn’t currently one of their main economic priorities, said Sepúlveda. The message from the Cuban side, he said, was that while they are open to seeing the U.S. ideas, they “want to move very carefully” and “Cuba is going to move forward in its own way.”

Sepúlveda said his response was: “Fine and good but we have a window of opportunity here.” Obama, who announced the historic opening with Cuba on Dec. 17, 2014, is in the final year of his term and some Republican presidential hopefuls said they plan to reverse his overtures toward Cuba.

He said that even though his job is advocacy and creating a policy environment conducive to a communications opening, rather than helping with business deals, “We need to have some solid wins to give [U.S. business] confidence.”

The U.S. delegation met with Jorge Luis Perdomo, Cuba’s vice minister of communications and officials from Cuba’s foreign relations and foreign trade and investment ministries as well as Cuban bloggers, university students and faculty. They also visited a Youth Club where teens were learning about the Cuban Intranet and the Internet.

In a speech at Havana’s University of Information Science, Sepúlveda said, “We strongly urge the Cuban leadership to respond to this initiative because it will benefit both our peoples.”

In the past year, he said there has been progress: Cuba has opened 58 public Wi-Fi hotspots with more scheduled for this year; the cost of Internet access has dropped by more than half to $2 an hour — although he said it was still too expensive; and Cuba is investing in DSL technology. In his interview with the Herald, he also cited Cuban roaming deals struck by Verizon and Sprint.

But he added that Cuba needs to “loosen regulations for consumer and residential Internet use” and also has the ability to skip generations of technology by upgrading from mobile networks that operate primarily on 2G technology to 3G or even 4G networks.

This story was originally published January 25, 2016 at 6:08 PM with the headline "Cuba still wary of U.S. telecom and Internet offers."