Prior to the 1959 revolution, US companies played a leading role in Cuba’s telecom market.
In 1949, AT&T and US conglomerate International Telephone and Telegraph (ITT) installed an undersea cable between Cuba and Florida to carry telephone and telegraph traffic between the two countries for the next 40 years.
On the eve of the revolution, ITT also owned 66 percent of the common stock of Cuba’s monopoly telephone services provider, the Cuban Telephone Company.
After the revolution, Fidel Castro’s new government nationalized the Cuban Telephone Company. Voice services continued between the two countries over AT&T’s undersea cable. Even after the US restrictions against Cuba in 1962, the US government allowed AT&T to use the cable to transmit telephone calls, provided that it did not upgrade the cable’s carrying capacity, a situation that made AT&T the leading US carrier serving Cuba into the early 1990s.
During this period, the US government did not allow AT&T to make payments to Cuba for connecting telephone calls on the island, instead requiring it to deposit all such payments into one or more escrow accounts.
After the passage of the Cuba Democracy Act in 1992, and several years of negotiations, Cuba reached an agreement with the US on compensation for connecting telephone calls on the island. As a result, by the mid-1990s, the US Federal Communications Commission had authorized several US telecom services companies, including AT&T, IDB Worldcom Services, MCI International, and WilTel, to provide direct telephone service to Cuba.
In 2000, however, the government of Cuba severed all direct telecommunications services with the US after the US Congress passed a bill authorizing the seizure of foreign-country assets for the payment of compensation claims. Some judgments were paid out of money owed by AT&T and other American firms to the Cuban state telephone company that had been frozen in the escrow account.
As a result, there was no trade in telecom services between the two countries during 2000–2014 because US companies could not offer direct service, although it was possible to indirectly route calls to/from Cuba through third countries. Limited telecom services between the US and Cuba have resumed following the December 2014 announcement – and US cellular companies have recently concluded roaming agreements in Cuba.
