Internet-related announcements around President Obama's trip to Cuba

There were important financial and university-related announcements.

Last month, I speculated on possible Internet-related announcements that might be made in conjunction with the visit of President Obama. Nothing I mentioned came up, but let's look at what was announced just before and during the President's visit.

The week before the President arrived in Cuba, changes in regulations on travel, trade and finance were announced. Two of those changes were:

• Cuban origin software is now authorized for importation into the United States.
• Non-immigrant Cuban nationals in the United States will be permitted to earn a salary or compensation consistent with their visa status. U.S. companies are now also authorized to sponsor or hire Cuban nationals to work or perform in the United States.

That should clear the way for Cuban apps in Google, Apple and Microsoft stores as well as outsourcing. The ball is in Cuba's court.

The same week Verizon announced an agreement to provide direct telephone connections to Cuba. That is nice, but it does not provide Internet connectivity. There were rumors that AT&T would make an announcement during the visit, but, as far as I know they did not.

During the visit, several further developments were announced.

Silicon Valley payments startup Stripe will make it possible to give Cuban entrepreneurs access to the US financial system. Cubans will be able to incorporate a US company, set up a US bank account, and start accepting payments from the US. Stripe will be working with the Merchise Startup Circle, which has been working to form and facilitate a Cuban startup community. Again, the ball is in Cuba's court. Will they allow self-employed workers or cooperatives to open those accounts?

There was more financial news. Paypal expects to bring Xoom, their global money transfer service, to Cuba by the end of the year and Western Union announced that they would phase in money transfers starting at the end of the second quarter. (It seems like they are already offering that service -- perhaps a reader can clarify this for me).

Priceline subsidiary Booking.com will offer online reservations at Cuban hotels and Airbnb announced that they were no longer restricted to serving US customers and would book rooms for anyone travelling to Cuba.

Google tech center -- not sure what it will provide. Photo by Ramón Espinosa/AP

The most widely publicized announcement was that Google would offer free, high-speed Internet access to Cubans at a technology center belonging to the Cuban artist Kcho. The center will also have laptops, Google Cardboard and phones.

The announcement referred to 70 mbps speeds and 40 simultaneous users, but it is not clear whether those users will each have 70 mbps or they will be sharing it. I have asked Google for clarification, but have not received a response.

If it is shared, it will be similar to their current hotspots, but free. If it is per user, it will be inspirational and novel and there will be very long lines waiting to get in.

Regardless, like Kcho's earlier free access over DSL, it is a drop in the bucket and to a great extent a publicity stunt. That being said, both the President and Google executive Brett Perlmutter implied that this was just Google's first foray into Cuba and they hoped to announce more in the future.

President Obama announced a $1 million fund for US-Cuba academic partnerships. The impact of this program will not be immediate, but it is important. Today, the few Cuban students with Internet access have slow connections and tight usage caps. Imagine the reaction of a Cuban exchange student in a computer lab in a US university with gigabit connectivity. Similarly, what insights might come from the exposure of a US student to the constraints on and innovations by Cubans?

Cisco training at UCI may foreshadow competition for Huawei.

A university was also involved in what may have been the most important announcement. Last January, a high-level US delegation travelled to Cuba. At that time, Cisco proposed the establishment of a Cisco Academy training and certification program at Cuba's prestigious University of Information Science. The proposal has been accepted.

This is great news and it implies a Cuban willingness to be open to competition in the infrastructure market. In the early days, Cisco equipment was used in Cuba, but today Huawei is dominant. Cisco-certified graduates will be ready to work with Cisco equipment.

Now, if Cuba would also be willing to allow competition in the Internet service market ...

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April 17, 2016

A special edition of Cuba's weekly sneakernet, El Paquete Semanal, contains full coverage of President Obama's trip to the island. The distribution features coverage of the his speeches, his press conference with Raúl Castro, a short documentary on his life and his and his comedy skits with Cuban comedian Pánfilo.

You can see the comedy sketches below, but neither is a threat to Saturday Night Live.





Cubans can also purchase a pirate DVD covering President Obama's trip:

Verizon's direct-connection agreement is nice, but it's not the Internet

Verizon and Sprint both offer mobile roaming in Cuba, and Verizon has just signed a direct-connection agreement.

I am frankly not sure what the difference is between a "direct-connection" and their earlier "roaming" agreement, but it sounds like simpler routing, eliminating middle-man networks.

That should lead to better sound quality and lower prices. Verizon has not announced their prices, but we can get a clue by looking at today's roaming prices. Sprint charges $2.49 per minute for voice calls, $1.99 per megabyte of data and 50 cents to send SMS text messages. (Receiving SMS messages is free). Verizon’s current roaming rates are $2.99 per minute for voice calls and $2.05 per megabyte of data.

IDT, which established a direct connection with Cuba last year, claims "crystal clear conversations, low rates and no hidden fees." Their rates for calling Cuba from the US are shown below, but I cannot find their rates from Cuba and I don't understand the difference between the 65 cents a minute and 83 cents for three minutes services.

It is also rumored that AT&T will announce some sort of deal before President Obama's trip to Cuba, so we may soon have cheaper phone calls between the US and Cuba.

That is good, but, to paraphrase Bill Clinton -- "It's the Internet, stupid."

As shown below, mobile traffic is increasingly data, not phone calls. We called them "phones" till about 2011, but now they are "computers."

Source: Akamai

ETECSA said the service agreement will "initially allow the offering of voice services," which perhaps implies that they will eventually offer data services, but nearly all of Cuban mobile connectivity is 2G.

These deals demonstrate that Cuba is willing to let a state enterprise deal with US companies and they may be feet in the door leading to eventual domestic infrastructure agreements, but that remains to be seen. In the meantime, direct or indirect roaming may be mostly for tourists and Cubans will still crowd around ETECSA hotspots.

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Update 3/18/2016

If you are serious about the question of telephone regulation between the United States and Cuba, you need to follow the writing of Eduardo Guzman. For a detailed history up to last year, see his article Telecommunications in Cuba and the U.S. Embargo: History, Opportunities, and Challenges

There have been many regulatory changes since that time, leading up to the establishing of direct telephone connections by IDT, Sprint and Verizon. Guzman surveys the history then brings us up to the present in a long blog post "U.S.-Cuba Telecommunications: Turning the Corner."

Direct telecommunication service between the United States and Cuba essentially ended after the imposition of the embargo in the early 1960s. The Cuban Democracy act of 1992 allowed US carriers to provide telecommunications services between the U.S and Cuba, but there were so many strings attached -- including a $.60 per minute cap on settlement rates -- that nothing happened.

The deadlock was broken by the Obama Administration and Guzman imagines that we will see "increased use of cellphones to make direct calls to Cuba from the U.S., more options for traditional wireline long distance service to Cuba from the U.S., and new products sold to U.S. consumers to allow their relatives and friends in Cuba to make cheaper calls to the U.S." as well as services aimed at U. S. tourists roaming in Cuba.

That will enable families to talk with each other and tourists to call home, but it does nothing for broadband connectivity, which would require further negotiation and, more important, upgraded Cuban infrastructure. We've "turned a corner," but the road ahead is long and full of obstacles.

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Update 5/11/2016

T-Mobile now offers roaming in Cuba. Sprint and Verizon already offer Cuban roaming and AT&T is negotiating a roaming agreement with ETECSA. But, roaming is not the Internet.

Verizon roaming in Cuba -- much ado about not much

While Verizon customers may be able to make $2.99 per minute 2G calls, it seems their $2.05 per megabyte data service will be limited to few locations.

President Obama is continuing to use executive powers to nibble away at the embargo. Some US companies will be allowed to establish Cuban offices and Verizon has announced that they will offer roaming in Cuba.

Verizon's roaming rates will be steep -- $2.99 per minute for calls and $2.05 per megabyte for data. Most of Verizon's roving customers will be non-Cubans, so we should not read to much into the prices, but one wonders what Verizon's split with ETECSA is and whether this foreshadows ETECSA's strategy.

ETECSA's policy is a key unknown in predicting the future of the Internet in Cuba. If their goal is to maximize profit, their monopoly position will inevitably lead to high prices, conservative infrastructure investment and poor service. A goal of maximizing government revenue would do the same.

Reader Ray Rodriquez has raised another interesting question -- how does ETECSA plan to handle the data? At those prices and with relatively few users, I doubt that the volume of data will be a problem, but what about connectivity and coverage?

We have been speculating on the Cuban backbone, and have concluded that there must be connectivity from each city with a WiFi access point to the cable landing at the east end of the island since almost 100% of Cuba's international traffic is now routed over the cable.

But how many of ETECSA's cell towers are able to reach the backbone? How many are able to handle even 3G data? Looking at Cuba's annual ICT statistical report, we see that the percent of the population with (predominantly 2G) cell phone coverage has barely increased since 2010 and it has been flat at 85.3 percent since 2012.

While Verizon customers may be able to make $2.99 per minute 2G calls, it seems their $2.05 per megabyte data service will be limited to few locations.

Like the Netflix offering, this is a symbolic start, but, as we have seen -- in a nation with nearly no Internet access, a little bit gets a lot of hype.

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Update 9/19/2015

More on the executive easing of embargo restrictions.

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Update 2/13/2016

Experience getting online in Cuba for Americans and Europeans

Bloomberg editor David Rocks reports that Americans can use Verizon Wireless roaming at a cost of $2.99 per minute for phone calls and $2.05 per megabyte of data. Sprint roaming is $2.49 a minute and $1.99 per megabyte of data. AT&T or T-Mobile users are out of luck.

For people with European cell service, the situation is better. The author was able to use his Vodafone account, The author was able to use voice and data, making voice calls using WhatsApp. He was even able to use his phone as a mobile hotspot and stream YouTube video to his laptop, although most of the time it was too slow for streaming.

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Update 2/19/2016

Journalist Mark Walsh (@markfwal) pointed out that Sprint also claimed to be the first U.S. Carrier to sign a direct roaming agreement with Cuba. The Sprint claim came a month or so after the Verizon claim -- is the Sprint service different than what Verizon offers? Has anyone tried either?