Google and China in battle over Cuba's Internet future

Google and China in battle over Cuba's Internet future
Michelle Caruso-Cabrera | @MCaruso_Cabrera
Wednesday, 12 Aug 2015 | 11:10 AM ET
CNBC.com

Cuba needs all sorts of infrastructure improvements, but none of them is
as politically thorny as Internet access.

Google and other U.S. tech companies, with the endorsement of the U.S.
government, want to provide that infrastructure, but the Cuban
government is wary of Americans bearing advanced technology gifts.
Instead, it may turn to an old partner it knows better: China.
Internet access is rare in Cuba. Until last month, connectivity was
limited to people working the government jobs that provided it, and to
those who could pay more than $4 an hour at Internet access spots across
the island. In a country where the average worker earns $20 a month or
less, there aren't many people ready to pay that fee.

In July, 35 hotspots controlled by the government began providing
connectivity at locations around the island. Havana, the most populous
city, has five. CNBC visited one of the sites Wednesday and found that,
despite costing $2.50 an hour, they were packed with Cubans eager to go
online.
But in a country of 11 million people, that's still a very small number
of hotspots. Consider that in New York City, there are 283 free Wi-Fi
spots at Starbucks shops alone.
Now Google wants to speed up the rollout. The tech giant has offered a
detailed plan of more than 100 pages that supposedly would provide
faster Internet at very little cost to the Cuban government, according
to those familiar with the document.

The proposal was first reported by The Miami Herald in early July,
citing unnamed Cuban officials. Google declined to comment when
contacted by CNBC.

Google's push comes as the Cuban government is under intense pressure to
expand access to the Internet, said Baruch College professor Ted Henken,
author of "Entrepreneurial Cuba." When it comes to the Internet, "the
government realizes it's where they were two or three years ago with
foreign travel," he said. "They can't keep saying 'no.'"

Google has taken very public stands against government limitations on
Internet access—most notably, the company withdrew its services from
mainland China in 2010 over Beijing's attempts to block websites
including Facebook, Twitter and YouTube. Also that year, Google accused
sources in China of a "highly sophisticated" hack of its corporate
infrastructure that resulted in the theft of the company's intellectual
property.
Details of any Google plan for Cuba aren't clear, but there are hints in
executives' public statements. In a visit to Cuba in June, Google Ideas
executive Brett Perlmutter told independent online magazine On Cuba: "We
are one of the largest infrastructure companies in the world, and we can
grow the infrastructure of the country. Cuba has a big opportunity to
jump directly to mobile, bypassing cable, like they are doing in Africa."
Perlmutter declined CNBC's request for comment.

But right now, it appears the Cuban government has no interest in
leap-frogging past cable and going directly to mobile, especially if an
American company is behind that jump. In mid-July, a leak of a 45-page
PowerPoint-style document showed what appears to be the government's
plan to eventually provide broadband service to Cuban homes by 2020.
That service would be based on ADSL (asymmetric digital subscriber
line), which operates over copper telephone lines, and would rely on
equipment from two Chinese telecom firms: ZTE and Huawei. The cost to
the Cuban consumer would be based on the speed of the connection, the
amount of usage and the level of access—meaning national or international.

"I don't see them using Google if they have a Chinese option," Henken
said. The Cuban plan would also give the government two key advantages,
he said—a chance to charge money and the ability to watch what people do
online.

Carlos Alberto Perez, the blogger who posted the ZTE document, agrees.
"They prefer to trust the Chinese, who are their friends," he said.
That said, Perez acknowledged that when Cubans do access the Internet
today, they enjoy greater freedom to search than Chinese citizens do.

"You can access nearly everything," he said, with the notable exceptions
of pornography and dissident websites such as 14ymedio.com. But he said
he thinks that could change as more people gain access. "China has a
very long experience in controlling the Internet."

Asked by CNBC about a Google plan, a Cuban government official was
dismissive, suggesting there are concerns about whether the tech giant
is acting as an arm of the U.S. government. He pointed to the
involvement of Jared Cohen, a former State Department official who is
now head of Google Ideas, a unit of the company that makes "products to
support free expression and access to information," according to its
website. Cohen declined CNBC's request for comment.

Mixed signals

Havana has given mixed signals about its willingness to work with
Google. Company officials including Executive Chairman Eric Schmidt have
met with the Cuban government more than once. Cohen was allowed into the
country and was invited to the re-opening of the Cuban embassy in
Washington.

Henken speculated that Cuba's apparent willingness to speak with Google
stems from Schmidt's endorsement of an end to the trade embargo. The
White House announced its change in policy toward Cuba last December.

"Now, after December 17, it's harder to say no to people of that
stature," Henken said. "They have to at least look like they are taking
these offers seriously."

But old mistrust dies hard. The Cuban government has reverted to Cold
War rhetoric when talking about the Internet. Juan Antonio Machado
Ventura, a former Cuban politician and general who fought alongside
Fidel Castro in the 1950s, last month appeared to liken Google to an
American Trojan horse.

"There exist people who want to give (the Internet) to us for free, but
they aren't doing it with the goal of allowing the Cuban people to
communicate, but rather with the purpose of penetrating us, and to do
ideological work to achieve a new conquest," he told Juventud Rebelde, a
government-backed news website.

"We must have the Internet, but our way, knowing that there is an
imperialist intention to use it as one more way to destroy the
Revolution," he said. "We have to do it, so that our young people aren't
too distant from the world of today, but we have to explain to them why
we aren't doing it more rapidly."


Michelle Caruso-Cabrera
CNBC Chief International Correspondent

Source: Google and China in battle over Cuba's Internet future -
http://www.cnbc.com/2015/08/12/the-challenge-of-bringing-internet-to-cuba-.html