Cuba? Please Continue to Hold

More than 15 months have passed since President Obama lifted the ban on U.S. telecommunication companies seeking to operate in Cuba, ending a 50-year-old embargo against such businesses. The directive was billed as part of Obama’s search for a new direction in U.S.-Cuba relations and allowed, among other provisions, the signing of roaming contracts with Cuba's mobile phone operators.

Beyond creating business opportunities for U.S. companies, Obama wanted to develop the “means to encourage positive change in Cuba.” The measure is intended to expand communication links between both countries and facilitate the free flow of information to the Cuban people.

Early this month, ETECSA, Cuba’s telecommunications company, announced that the country of 11.2 million people now has over one million mobile phone users, a total greater than the number of landline users. While Cuba still remains at the bottom of cellphone penetration in the Americas, the number represents tremendous growth. Just three years ago there were only a few thousand mobile users in Cuba, mostly government officials and foreigners.

A feather in the cap for the Obama administration? Not exactly. Cellphone usage was already climbing rapidly when Obama took office and aside from some U.S. industry representatives being allowed to travel to the island to discuss business opportunities with Cuban officials, no single commercial activity can be attributed to Obama’s telecommunications directive so far.

It turns out the real instigator has been Cuban President Raul Castro. Weeks after officially taking over the helm from his brother Fidel in February 2008, Raul started to lift what he saw as an "excess in prohibitions and regulations,” including those imposed on the sale of cellphones and computers.

To attract more users, the Cuban government has been lowering the cost of consumer cellphone service ever since. Today Cuban officials say they also have "hundreds" of roaming agreements with providers from other nations – except the United States.

So far US companies are the odd man out, while companies from other nations expand their presence in Cuba. Sure, Castro may be a key reason why that is the case, but so far industry representatives say the single greatest obstacle for U.S. carriers turns out to be Washington, not Havana.

According to a new report “Empowering the Cuban People through Technology” jointly published by the Cuba Study Group, the Council of the Americas and the Brookings Institution, telecommunications-related exports are more restricted to Cuba than to Burma, Syria or even Iran.

Obama's executive order was supposed to clear away years of regulations and impediments, but regulators at U.S. agencies charged with implementing the law have chosen, for instance, to allow the export of personal communication devices such as cellphones, PDAs or laptop computers -- only if they are donated.

Robert Muse, a D.C. lawyer and long-time expert on trade with Cuba, said regulators had room to be bolder in interpreting the flexibility of the current statutes and allow for a much deeper U.S. participation in Cuba’s market. Still he is not surprised by Washington's foot-dragging. “The ferocity of the U.S. embargo on Cuba has always been unique,” he said in an interview.

It stems, of course, more from domestic than foreign considerations. Washington's lack of impetus is meant to appease a domestic constituency, particularly in Southern Florida. Hard-line embargo supporters refuse to support any type of engagement that might benefit the Castro regime.

Report authors, such as Christopher Sabatini with the Council of the Americas, admit that U.S. investment in telecommunications would probably provide the regime with much needed hard currency. But Sabatini, who does not advocate lifting the embargo completely, said in an interview that a “cost benefit analysis” demonstrates that lifting some of it will benefit Cubans more than the regime.

“Totalitarianism thrives on isolation, ” the report argues. “Once the technology is widespread it tends to favor the people.”

Even with cellphone, computer and Internet use at its infancy in Cuba, there are already powerful examples of its impact. Earlier this year photos of emaciated and bruised bodies began circulating social networks on the Internet revealing the conditions in which at least 26 patients at a psychiatric hospital died when a cold front hit the island. Authorities had promised an investigation and hoped to walk away, but the images circulated worldwide and became a major embarrassment to Cuba’s much-vaunted healthcare system.

It may be due to lack of political will or bureaucratic inertia, either way the United States remains outside the Cuban telecom revolution. And those waiting for some new direction in U.S.-Cuban relations continue to hold.