Obstacles to Normalizing Telecommunications

Cuba: No deal with US telecoms

Cuba rebuffs key Obama initiative that would have opened the island to better cell phone and internet service.

By Nick Miroff

Published: October 18, 2009 17:11 ET
Updated: October 19, 2009 09:01 ET

HAVANA, Cuba — For years, U.S. mobile phone companies and internet providers have been banned from doing business with Cuba, further isolating one of the least-connected countries in the hemisphere.

So when the Obama administration loosened those restrictions earlier this year, it looked like a tech surge was in store for the communist-ruled island. But after months of silence, Cuba seems to be saying no thanks.

Other outstanding trade and legal grievances need to be resolved before American telecommunications companies are granted access, a Cuban telecom official said Saturday, in a statement that appeared to rebuff one of the Obama administration’s key Cuba policy initiatives.

The White House announced in April that it would provide exemptions from long-standing U.S. sanctions against Cuba’s communist government, so that companies like Verizon, Sprint and AT&T could bring better phone and internet service to the island to “promote the freer flow of information.”

But the Castro government exerts strict control over the island’s communication networks, and American companies would have to reach a deal with the government’s telecom monopoly, ETECSA.

Months passed without a response to Obama’s proposal. But during an official government newscast Saturday, ETECSA international operations director Vivian Iglesias said there were two major obstacles to such a partnership: some $160 million in frozen funds that the U.S. government seized from ETECSA in 2000, and trade restrictions imposed by the 1992 Cuban Democracy Act, which forces Cuba to pay U.S. companies through third countries, incurring additional transaction fees.

“It may seem like the Obama administration has expanded communication possibilities,” said Iglesias. “But we know that unless restrictions like the (Cuban Democracy Act) and others that have been tightened since 1992 don’t change, there can’t be any normal communication.”

Iglesias’ statements were a reminder that a firewall of mistrust remains between two countries split by 50 years of hostile relations and emotional politics.

Previous agreements between U.S. telecom companies and ETECSA went sour in the late 1990s, when U.S. legislators ordered ETECSA’s funds seized as payment to Cuban American families who won a wrongful death judgment against the Castro government after four pilots from a Cuban exile group were shot down in a 1996 dispute.

Iglesias said that money was “stolen” from ETECSA, and hasn’t been paid back.

“The causes that led to the theft of our funds are still in place,” she said. “If those restrictions don’t change, that prevents direct communication between the United States and Cuba.”