The Washington PostDemocracy Dies in Darkness

Obama is now letting U.S. telecom carriers go to Cuba

FILE: Cuban Gilberto Ruiz, 70, takes an order for construction materials on his cellphone in Havana IN 2012. (REUTERS/Desmond Boylan)
Placeholder while article actions load

As part of Washington's normalization with Cuba, the Treasury Department is relaxing more of its sanctions against the small island nation. Now, more Americans will be able to travel to Cuba, and it'll be easier to send money and set up bank accounts there. But the change in policy also lays the groundwork for a much more substantial transformation of Cuban culture and politics.

You see, the Obama administration isn't just opening up diplomatic relations. By loosening its telecom restrictions, Washington is also making it possible, for the first time, for U.S. telecom and Internet providers to enter Cuba in a meaningful way. U.S. telecom companies will be allowed to set up shop in Cuba, partner with Cuban entities, and enter into licensing agreements with them to provide the country with connectivity.

What's more, Americans will be allowed to hire Cuban software developers and bring their mobile apps into the United States. This is a huge deal. U.S. venture capitalists consider Cuba a fantastic investment that's just waiting to flourish. Cuban-designed apps could help facilitate interactions between family members an ocean apart, for instance, or put add momentum to the country's own, local economy.

[Obama administration to further ease travel and business restrictions with Cuba]

"Cuba has a lot of educated, tech-savvy young people," said Jack Nadler, a lawyer at Squire Patton Boggs who's advised developing countries on their telecommunications policies. "Assuming the Cuban government allows those relationships to develop, this could be a big win-win for both countries."

The United States has issued regulations easing restrictions on American companies seeking to do business in Cuba and opening up travel in the latest move to normalize relations with the Communist country. Jillian Kitchener reports. (Video: Reuters)

Ahh, yes. That's the rub, isn't it? Havana knows, just as well as Washington does, that information tends to encourage liberalization and openness. For the same reasons that President Obama is making telecom a pillar of his Cuba policy, then, the Cuban government has an interest in making sure that it stays firmly in control of any new telecommunications infrastructure that might be built in the coming years.

Cuba remains one of the least connected nations in the world. Only about 5 percent of Cubans can access the global Internet. Mobile Internet from the state-run wireless carrier, ETESCA, costs $2 an hour — about 10 percent of what a typical Cuban government official makes every month. Still, things are evolving rapidly: ETESCA this year cut its price for mobile broadband in half, and it's setting up 80 new cell sites across the island.

Instead of allowing the likes of Verizon and AT&T to compete directly with ETESCA, what we're more likely to see is some kind of deal with the state-run monopoly that preserves Havana's influence. (Just this week, Verizon announced that its U.S. customers will be able to add a Cuba roaming package to their plan; it costs $2.99 a minute and $2.05 per megabyte of mobile data.)

While you shouldn't expect Cubans suddenly to flock to the Internet, lifting restrictions on U.S. telecom and Internet firms is a necessary step if American businesses are ever to operate there.