Steady Progress in Cuba/U.S. Telecom Links

Carl Weinschenk
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The opening of relations with Cuba was thought likely to provide a shot in the arm for American telecom companies. After all, the island lies about 90 miles away and the populations of the two nations have deeply shared roots.

It will, but things rarely roll out simply. The opening of a formerly cloistered nation to U.S. telecom companies is unprecedented, so it is difficult to say whether progress is slow or fast. In any case, progress indeed is being made. This week, T-Mobile said that it has struck an interconnection and roaming agreement with Empresa de Telecommunicaciones de Cuba, SA (ETECSA). CNET says that the agreement stipulates low rates and the ability, beginning in July, for the company’s U.S. subscribers to use their phones for voice, text and data roaming services while on the island.

The story says that Sprint and Verizon already have roaming agreements in place. T-Mobile is a major player and this is something of a milestone. The carrier claims more than one-third of Cuban-born cell phone users in the United States.


It is not surprising that there is jockeying going on between the carriers in the United States. Cuba is a big market and the rules that are in place will influence which carriers win and which lose. Law360 outlined the battle last month. AT&T, the site said, is asking the Federal Communications Commission (FCC) to change current rules that require all carriers to charge the same rates for services between the two nations. Verizon is arguing to keep the rules as they are. The two carriers took their contradictory positions on filings in early April to a proposal by the FCC to relax the rules. The lines clearly are drawn:

AT&T and Verizon originally responded to the FCC's request on April 4, splitting on whether the agency should remove the nondiscrimination requirements. AT&T said Monday that its competitor has established that U.S. carriers are paying 60 cents per minute — three times the benchmark rate — to terminate calls in Cuba under the ‘outdated and anticompetitive’ International Settlements Policy. Verizon has called for the continued application of the TeleCuba Waiver Order Framework, including its nondiscrimination provision.

Of course, scratching the surface of the filing would show that the position of each is in its best business interests. There is another dimension to the question of telecommunications services in Cuba. An Associated Press story posted at the Sarasota Herald Tribune says that only two industries – telecom and travel – have been given special treatment by the U.S. government in its outreach to Cuba. Others still labor under the provisions of the blockade of the island nation.

The impact likely is twofold: The business traffic that would exist if the gates were fully open is missing and any decision by the administration on how to proceed with thorny telecommunications questions – such as the one now before the FCC – will be seen through the political context of both an election season in the United States and the fact that the industry has been elevated above all but one other.

There is little question that the wireless industry will do well in Cuba. It just may take a bit longer to be realized than the most optimistic people expected.

Carl Weinschenk covers telecom for IT Business Edge. He writes about wireless technology, disaster recovery/business continuity, cellular services, the Internet of Things, machine-to-machine communications and other emerging technologies and platforms. He also covers net neutrality and related regulatory issues. Weinschenk has written about the phone companies, cable operators and related companies for decades and is senior editor of Broadband Technology Report. He can be reached at cweinsch@optonline.net and via twitter at @DailyMusicBrk.



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