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How Obama's lifting of rules for Cuba might affect telecom companies

April 13, 2009 |  5:12 pm

Cubaphone
People using phones in Cuba. Credit: Paul Keller via Flickr

The Obama administration said today that it was changing some U.S. policies toward Cuba, hoping to, among other things, "promote the freer flow of information and humanitarian items to the Cuban people."

The news could create some major changes with regard to cellphones, computers and broadband in Cuba. The administration proposes to let telecommunications companies establish fiber-optic and satellite links between the U.S. and the island, let U.S. carriers enter into roaming service agreements with Cuba's carriers, let U.S. satellite radio and TV companies provide service in the country and allow people to donate consumer telecommunication devices to Cuba without a license.

“This is a big deal. It’s a significant change in U.S. policy,” said David A. Gross, a partner at international telecom firm Wiley Rein who was until January the U.S. Coordinator for International Communications and Information Policy.

The administration's decision means that Cuban Americans can send ...

... U.S. cellphones to their relatives, who will be able to make roaming calls on them and communicate with friends and family in the U.S. Satellite TV and radio companies such as Sirius XM could also potentially provide service to Cubans, Gross said.

Before anything can happen, though, the Cuban government needs to agree to issue licenses or permission for these changes to occur. “Now it’s up to the Cuban government to let its people have access to this type of goods and services,” Gross said.

The Obama administration will now allow computers, software and phones to be donated to Cuba without a license as well.

There seems to be potential for significant growth in Cuba’s telecom industry. According to 2007 statistics from the International Telecommunications Union, 11% of Cuba’s population subscribes to telephone services, and only about 2% of the population subscribes to cellphone service. Fewer than 1 of every 100 inhabitants subscribes to broadband, even though 12% of the population uses the Internet. As a matter of comparison, in the Dominican Republic in the same year, 56% of the population subscribed to cellphone service and there were 2 broadband subscribers per 100 inhabitant.

U.S. wireless companies were mum today about how they planned to react to the policy changes.

“We’re certainly going to study the administration’s proposal, but beyond that, we can’t comment,” said Geoff Mordock, an AT&T spokesman.

-- Alana Semuels

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