The Cuba Internet Task Force -- a win for Trump, Castro, Putin and Xi

President Obama began working on Cuban rapprochement during his 2009 presidential campaign. After over five years of thought and negotiation, the Whitehouse announced a major shift in Cuba policy, which included allowing telecommunications providers "to establish the necessary mechanisms, including infrastructure, in Cuba to provide commercial telecommunications and Internet services, which will improve telecommunications between the United States and Cuba."

When President Obama's trip to Cuba was announced, I speculated on possible Internet-related advances but was disappointed by the results. While in Cuba, the President held optimistic public meetings and several Internet-related projects were announced, but, as far as I know, none of them materialized. Can we expect more from Trump?

Last summer, Trump said he would be changing our Cuba policy and I speculated on how it might affect the Internet, but could not think of anything reasonable. When he published his Cuba policy memorandum, one of its purposes was to restore Cuban's "right to speak freely, including through access to the Internet" and one of its goals was to "amplify efforts to support the Cuban people through the expansion of internet services."

Trump said he was "canceling the last administration’s completely one-sided deal with Cuba," but his Internet policy sounded a lot like Obama's. The only concrete difference I saw was that Trump had ordered the State Department to convene a task force "to examine the technological challenges and opportunities for expanding internet access in Cuba."

Last week, the State Department issued a public invitation to attend the first meeting of that Cuba Internet Task Force on February 7th.

I called the State Department to ask whether the meeting would be streamed or archived and was told that it would not. I asked if they had any information on the meeting agenda, the charge of the task force and who the members were. They referred my questions to the Press office, but they did not answer.

We will hopefully learn more after the meeting, but what might Trump do? Will we see the laissez-faire Trump who promised Saudi Arabia that "America will not seek to impose our way of life on others" or some sort of digital Bay of Pigs like the failed smuggling of satellite equipment into Cuba, Zunzuneo or the Alan Gross affair?

My guess is that not much will happen -- that this task force and the rest of Trump's Cuba policy is for domestic political consumption by anti-Castro politicians and voters. The Cuban government is also using the task force for domestic political consumption. Their reaction to its formation was predictable -- saying that Cuba is being attacked by a powerful, hostile nation. Within a few days of the formation of the task force, many articles like this one were published by the Cuban government and allied publications like China's Xinhua and Russia's RT. (Perhaps rekindling the Cold War is part of making America great again).

Ironically, this task force is a political win for both Castro and Trump -- autocracy thrives on fear and mistrust.

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Update 2/2/2018

Last night I saw The Final Year, a documentary on the final year of the Obama administration. In it, former Whitehouse staff member Ben Rhodes says it took them time to realize that Putin was not motivated by the interests of Russia, but by self-interest. That may be true to some extent for nearly all politicians, but it seems to fit Castro and Trump well in this case.

(As an aside -- Rhodes was one of the two White House staff members handling the negotiations leading up to our opening with Cuba).

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Update 2/3/2018

Following up on Ben Rhodes' comment on Putin -- establishing this task force or any other act that drives a wedge between Cuba and the US benefits Putin as well as Trump and Castro.

While Castro and Trump use the rift between their nations for domestic political advantage, Putin uses it for international political advantage and commerce.

The dissolution of the Soviet Union caused an economic crisis in Cuba, sharply cutting trade and cooperation with Russia and other Soviet republics, but in the last few years, trade and cooperation have picked up. In 2014, Russia forgave 90 percent of the $35 billion debt Cuba incurred during the economically difficult "special period" of the 1990s, with the remaining $3.5 billion to be settled by giving preferential treatment to Russian investments on the island.

Cuba and Russia are also cooperating on oil exploration, extraction and refining and Cuba is importing oil, cars, trucks, and railway infrastructure and equipment. Trade between Russia and Cuba rose 73 percent in the first half of 2017 to $176 million. There has even been talk of Russia reopening it's cold war Signals Intelligence base, which once had a staff of 1,500 in Cuba.

While Russia is building commercial and political ties with Cuba, China remains their largest trading partner and a major supplier of Internet and computer equipment. (For more on Cuba-China trades, click here). Even Iran is allying with Cuba.

Russia is also on the "right side" of public opinion of the Cuban embargo. The embargo is unpopular in Latin America and the rest of the world. (The US and Israel support the embargo in the UN and the remaining 191 UN member states oppose it).

Evidently making America great again entails having a hostile ally of Russia and China 90 miles from Florida -- sound familiar? Putin and Ji may be the biggest winners from our Cuban policy shift and the Cuban and American people the biggest losers.

Castro and Putin meeting at the UN (source)

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Update 2/7/2018

Reuters reports that Cuban independent media outlets oppose Trump's Cuba Internet policy.

Elaine Diaz, founder of Periodismo de Barrio, José Jasán Nieves, director of El Toque and Miguel Alejandro Hayes who writes for La Joven Cuba are all quoted as opposing the Trump initiative.

Nieves said civil society initiatives had "flourished" after the Obama-Castro detente and Diaz said she would refuse any money the Trump program might award and stressed that they are independent media "independent of Cuban authorities as well as any other government." Hayes does not agree with Trump's goal of toppling the Cuban government.

Of course, these are only three of many independent journalists in Cuba and they are not extremists.

I suspect that this Task Force will be given a budget and, if independent journalists are not interested in assistance from the US, they may end up funding secret projects like those mentioned above. That will allow Trump to claim to be tougher than Obama and the Cubans will discover the projects and overstate their significance -- propaganda wins for Trump and Castro while Putin and Ji smile quietly.

Speculation on Trump's forthcoming Cuba policy speech and its impact on the Cuban Internet

Trump has a dilemma. He has to take some executive action that will allow him to ridicule President Obama and show that he is punishing Cuba for its human rights violations and the confiscation of businesses and property after the revolution, but not harm US telephone companies, hotel chains, airlines and cruise lines.

Trump is expected to announce his Cuba policy next Friday in Miami. There can be little doubt that he will reverse some of President Obama's executive orders in order to brag to his base supporters and try to make the Cuban diaspora hardliners happy. He will say the President was weak and made a terrible "deal," which the world is ridiculing. He may even take yet another shot at Hillary Clinton.

Cubans do not see President Obama as
an "Evil Emperor."

There are some things that I bet he does not say. He will not compare Cuban human rights with those of his friends in Turkey, the Philippines, Saudi Arabia, Russia, et al. and he will not mention that he is lending credence to the tired claim that the US is the Evil Empire that is responsible for Cuban economic problems. He probably won't note the unpopularity of his action in Latin America and I don't expect him to say much about the security implications of alienating Cuba at a time when Russia, China, and Iran are moving closer either. (Someone should tell him about the Cuban missile crisis).

But, I can't imagine that he would do something major like break off diplomatic relations or do anything to harm the tourism and travel industries. That would hurt our economy, cost jobs and be unpopular with the general public which favors lifting the trade embargo.

What about the Internet?

By and large, the Cuban Internet is constrained by political/power considerations, tired political rhetoric and mistrust, the cost of infrastructure, the bureaucracy and economic interests of the ETECSA monopoly and Cuban government bureaucracy, not US policy.

But, what Internet-related changes might Trump reverse?

During his first hundred days, President Obama "reached out to the Cuban people" (emphasis added) by easing restrictions on remittances, family travel and gifts.¹ Increased remittances and gifts meant more Cuban people had laptops, tablets and smartphones to use in public access hotspots and access rooms as well as the money to pay for time online. Reversing these changes would deny ETECSA Interent-access revenue, but it would harm Cuban citizens with family abroad and give the government anti-US talking points. I will be surprised if Trump reverses these changes, but that does not mean he won't do it.

At the same time, the president eased restrictions on telecommunications allowing:

• Phone companies to offer voice and data roaming
• People in the US to pay for Internet-access and other telecommunication bills for Cubans
• US Companies to establish fiber-optic cable and satellite links to Cuba
• Satellite Internet and TV companies to serve Cuban companies
• Companies to export personal communication equipment like mobile phones, computers and software and satellite receivers to Cuba

Cutting roaming would hurt US tourism and telephone companies -- it is hard to imagine Trump doing that. He might be willing prohibit Americans from buying phone and data minutes for Cubans -- that would only hurt Cuban people and payment services like Ding.com (an Irish company).

While US companies have permission to sell communication equipment and infrastructure to Cuba, I am not aware of any significant sales. Since China has dominated the Cuban Internet infrastructure market, stopping infrastructure sales would have little or no immediate impact, but it could become significant next year when Miguel Díaz-Canel, who seems to be pro-Internet, replaces Raúl Castro.

The FCC removed Cuba from their exclusion and reversing that might cause Google to remove their Cuban caching servers. If that were to happen, there would be little practical impact, but it would be symbolically significant.

President Obama also moved to allow US citizens and companies to pay self-employed Cuban entrepreneurs for software and services. I don't know the extent to which this occurs, but it is hard to see what would be gained by trying to stop the practice and who would be pleased to see it happen. I doubt that he will roll this one back.

A number of organizations and universities have sponsored conferences, training courses, hackathons, etc. in support of Cuban software entrepreneurs. I am not sure whether Trump could somehow block that sort of activity, but I cannot imagine why he would do so.

How about attacking President Obama's trip to Cuba? During that trip, he addressed Cuban entrepreneurs and announced a couple of concrete commitments, but they have all fizzled. Trump may point that out.

Trump has a dilemma. He has to take some executive action that will allow him to ridicule President Obama and show that he is punishing Cuba for its human rights violations and the confiscation of businesses and property after the revolution, but not harm US telephone companies, hotel chains, airlines and cruise lines. It does not seem that reversing any of President Obama's Internet-related changes will achieve that end.

Steve Bannon may be able to come up with some ideas, but, if he can't, I have a suggestion. One of the properties the Castro government seized after the revolution was the Riviera, a waterfront hotel and casino that is now run by the Cuban government. The hotel was built by the gangster Meyer Lansky and Lansky's grandson, Gary Rapoport, has claimed it. Perhaps he and Trump could work out a deal with the Cuban government, rebranding it the Trump Rivera.

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¹ The initial announcement of this was removed from the Whitehouse.gov Web site, but it was captured by the Internet Archive and is also on the Obamawhitehouse.gov Web site.

Russia, Japan and others want to do business in Cuba

The US is interested in doing business with Cuba, but we are far from alone and we are late to the party. Cuba has a history of trade with Vietnam, China, Spain, France, etc. and visits from trade delegations have picked up.

The Cuban and Soviet economies were deeply intertwined before the Soviet breakup and on April 22 Russia and Cuba signed a five year deal for trade in the aeronautics, metallurgy, medicine, railway transportation and other sectors.

Russian and Cuban delegations met in Moscow.

The emphasis in US-Cuba trade discussions seems to be on the sale of US goods and services to Cuba rather than the other way around, but the Russian agreement includes the sale of Cuba-made pharmaceuticals to Russia, if they are found to be satisfactory in testing. Note that Russia is willing to purchase goods and services from Cuban-state enterprises while the US allows the purchase of goods and services from private Cuban enterprises, but not state firms.

Japan is also interested in doing business in Cuba. Japanese Foreign Minister Fumio Kishida and on May 2 some thirty business people met with representatives of a dozen Cuban state firms to discuss possible business deals at The Cuba-Japan Business Forum.

Cuban and Japanese foreign ministers and their delegations met in Havana. Foto: ain.cu

Cuban debt came up as a possible barrier to trade. Forum President Tomoyoshi Kondo said that "once the issue of the Cuban debt is solved, the two countries will be able to discuss and talk about the future.” The issue of Cuban debt also arose around the financing of the ALBA undersea cable. I don't know the current situation, but a Wikileaked memo from 2010 stated that:

Payment problems continue for all countries. Despite once again restructuring all of its official debt in 2009, Japan has yet to see any payments.

Many nations are looking for business and trade opportunities with Cuba now that detente with the US appears likely. In the short run, Cuban debt and poverty may limit that trade, but improved relations with the US and Cuban economic reform will surely improve the Cuban economy.