Biden's promised Cuba reset has big tech implications

On Inauguration Day, President-elect Joe Biden will inherit the United States’ fraught relationship with Cuba, one with technology at the center of it.

And whatever Biden does next vis-à-vis Cuba — he said in September he’d try to “reverse the failed Trump policies that inflicted harm on Cubans and their families” — has big implications not only for that island nation’s 11 million people but also the U.S. tech industry.

Let’s jump back to 2014. Barack Obama was president, and Biden was, of course, his No. 2. The Obama administration announced a sweeping plan to normalize relations with Cuba, including a loosening of restrictions on the sale of telecommunications equipment. Cuba’s lack of access to American-made tech, Obama argued, had for too long kept the country “closed off from an interconnected world.”

Tech sanctions were not only bad for Cubans, the thinking went, but for U.S. interests: Access to the global internet and mobile phones could help pull Cuba further into the American orbit. Once the legal landscape settled down a bit, American companies began poking a toe into Cuban waters. Chief among them was Google. Even before Obama himself visited Havana, the Silicon Valley search engine quietly began exploring whether it could be a part of the effort to bring more Cubans online.

Then came the election of Donald Trump, and a reset of Obama’s reset. Trump re-tightened some of the restrictions on Cuba that Obama had loosened, particularly in terms of travel and remittances. On the telecoms front, "It’s fair to say that the Trump administration left in place what existed on the morning of Jan. 20, 2017,” says John S. Kavulich, president of the business group U.S.-Cuba Trade and Economic Council. But the generally uncertain landscape chilled U.S. business interest.

Google has forged ahead, signing an agreement last year, for example, with Cuba’s state-run telecom to share internet traffic, but those moves are widely seen as baby steps.

Cuba, though, didn’t exactly spend the Trump era waiting on the U.S. Pushed in part by its younger generations’ hunger to get connected, the country has made a giant leap in recent years when it comes to getting wired. It has rolled out 3G access and hundreds of Wi-Fi hotspots. Internet access in Cuba was near the single digits when Obama took office. Now, per the World Bank, it’s in the neighborhood of 60 percent — still low for the region, but far beyond where it once was.

Also not waiting to see how U.S. policy to Cuba played out: China. Beijing has jumped into the market with both feet, saturating the island with low-cost telecommunications equipment. “China dominates Cuba’s telecommunication sector and provides a challenge to U.S. firms looking to enter the sector,” a report from the State Department’s Cuba Internet Task Force found last year.

Enter the president-elect. Biden has said he’ll overhaul the U.S. approach to Cuba: “In large part, I’d go back,” he said. What exactly does that reset look like? TBD.

When it comes to Cuba policy, “what you can expect under Biden is that empowering the Cuban people and empowering the Cuban private sector — and the growing tech entrepreneurial sector — is a priority,” says Ricardo Herrero, executive director of the nonprofit Cuba Study Group. But with so much facing the incoming president, says Herrero, don’t expect Cuba, generally, to be at the top of the list of things the Biden administration will tackle in the short term.

“It would be regrettable if the U.S. would completely cede the [information communications technology] market in Cuba to China,” says Herrero.

Should Biden launch a meaningful effort to unthaw U.S. relations with Cuba (again), it could be a boon to U.S. tech. Just opening up travel by Americans to Cuba could increase demand for the sort of robust connectivity that American companies can help provide. (Your author has a distinct memory of being in a bar in Havana in 2015 among American tourists demanding to know why they couldn’t use their AT&T equipped phones.)

Boosting Cuba’s technological landscape, however modest so far, has already led to a hunger for cutting-edge tech among Cubans. “It used to be, someone would say to me, ‘Do you have any kind of old flip phone, a Motorola, anything, that’d be great,'” says Kavulich of the U.S.-Cuba Trade and Economic Council. “But then, Obama visited, and it became, ‘Have you got that iPhone 10?'”