'New Market Opportunities' Will Abound From Liberalized Cuba Policy, CEA Says
While most groups and individual companies refrained Wednesday from immediately reacting to President Barack Obama's plan to restore diplomatic relations with Cuba or to the commercial implications of the decision, CEA showed little hesitation in hailing the initiative. "We commend President Obama for taking steps designed to promote the emergence of a democratic, prosperous, and stable Cuba," CEA President Gary Shapiro said in a statement.
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CEA especially welcomes new measures "allowing the commercial export and sales of consumer communications devices, software hardware and services," Shapiro said. "These efforts will provide exciting new market opportunities for our members and parallel our advocacy for expanded free trade globally. More, these measures will increase Cubans' access to the benefits consumer communications technology brings to the world -- eliminating the borders of time and geographic location to bridge global communities, democratize access to information and entertainment content, and provide new hope for promoting democracy and human rights."
U.S. sanctions "have denied Cubans access to technology that has empowered individuals around the globe," Obama said Wednesday in his remarks. "So I've authorized increased telecommunications connections between the United States and Cuba. Businesses will be able to sell goods that enable Cubans to communicate with the United States and other countries."
Cuba has an Internet penetration of about 5 percent, making it "one of the lowest rates in the world," said a White House fact sheet released Wednesday. "The cost of telecommunications in Cuba is exorbitantly high, while the services offered are extremely limited." The administration will authorize "the commercial export of certain items that will contribute to the ability of the Cuban people to communicate with people in the United States and the rest of the world," the fact sheet said. "This will include the commercial sale of certain consumer communications devices, related software, applications, hardware, and services, and items for the establishment and update of communications-related systems." Moreover, telecom providers "will be allowed 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," the fact sheet said. CTIA, through spokeswoman Amy Storey in a Wednesday email, declined comment on the Obama initiatives as they relate to telecom providers and building infrastructure in Cuba.
Cubans’ lack of access to Internet and telecom products and services is well documented. On Wednesday, NexTV Latam, an online research firm specializing in coverage of TV markets throughout Latin America, cited a report quoting Cuban government official sources as estimating there are about 120,000 terrestrial DTV decoders installed in a country numbering above 11 million in population. Moreover, an independent watchdog group, Freedom House, in a recent report, cited ITU statistics as placing Cuba’s Internet penetration at still less than 26 percent, saying "the vast majority of users cannot access the global internet, but are instead relegated to a tightly controlled government-filtered intranet." The report also said there are only two Internet service providers in Cuba, and the state owns both.
Internet service in Cuba is slow and tedious and harkens back to the early days of the slowest dial-up in the U.S. and Europe, we found firsthand in our own visit to the island nation about two years ago (see 1212040036). Locals also repeatedly complained to us about the high cost and difficulty of using the Internet. During that visit, we encountered a small business center at the hotel where we stayed that sold Internet access and logon instructions for 5 Cuban convertible pesos (about $5) for a 30-minute session. Putting that in perspective, a bottle of Cuban rum in a supermarket costs less than 5 Cuban pesos. "It is obligatory to present the passport, identity card or room number to access the Internet," a sign in the business center warned. We paid, logged on and found access painfully slow. We ran a series of broadband speed checks using one of several free online utilities. These revealed the ISP to be ETECSA, one of the state-owned ISPs, with download speeds of 0.038 to 0.070 Mbps and upload speeds of 0.011 to 0.057 Mbps -- about as fast as the slowest dial-up.