Friday, July 29, 2016

Old Havana fiber trial to begin August 20th? Many unanswered questions.

Old Havana (red area)

Last February, ETECSA announced a pilot connectivity project in two Havana neighborhoods. The Associated Press report said Cubans in Old Havana would be able to "order service through fiber optic connections operated with Chinese telecom operator Huawei."

I'd not heard anything more about this until the other day when a friend sent me the transcript of a chat between him and someone familiar with the project.

His friend said a two-month free trial will begin August 20th. During that time ETECSA and Huawei will test speed and presumably tune the system. The free trial will only be available in parts of Old Havana and they may be rolling the service out to other areas in 2017, but neither the prices or locations are set.

This leaves many questions. They refer to "fiber-optic connections" -- does that mean fiber to the premises? Fiber/coax hybrid? Fiber/wireless hybrid? How large is the trial? After the trial, where will the service be available? What will it cost? What will the speed be? What are the plans for the possible 2017 rollout? What is the relationship of this project to the earlier plan for providing access to DSL to fifty percent of Cuban homes by 2020? Etc.

We might get answers to some of these questions when the trial ends, but I'm not counting on it.

Here is the transcript of the chat between my friend (YO in the transcript) and his friend (AMIGO in the transcript) who is familiar with the project:

AMIGO:
se va a dar gratis aquí en la Habana vieja
en la parte del casco histórico
rompemos el 20 de agosto
oh

YO:
se va a dar gratis por 2 meses?
ese es el famoso plan piloto…

AMIGO:
Asi es…
estoy completo en eso
aun no se saben los precios
para cuando se vaya a hacer completo pal que lo quiera comprar
ahora se va a dar gratis el montaje y dos meses

YO:
pero en cuba entera o el mismo Habana vieja?

AMIGO:
gratis va a ser solo en la Habana vieja

YO:
dame esos detalles para tirar los chismes en mi blog jejejeejje
AMIGO:
gratis solo en el casco histórico
si claro eso es para probar la velocidad

AMIGO:
más adelante se va a comercializar como un servicio cualquiera
en cuba entera
así es... esto va a ser una prueba piloto para saber cómo se comporta la velocidad y la conectividad

YO:
cojone pero eso será para el 2017
ojala que llegue
AMIGO:
te digo que rompemos el 20 de agosto en la habana vieja

YO:
si pero no eso del plan piloto
sino para la inter que me llegue a mi...

AMIGO:
bueno no se luego de este plan cuando rompen masivo para todo el mundo
eso no se ha definido aun
ni los precios para cuando se vaya a cobrar
seguimos en las mimas

YO: hay que mudarse para la habana vieja

AMIGO:
jajajajaja
tu sabes
déjame redactar un articulito simple, para que los demás no se me vallan adelante con la noticia, tranquilo que la fuente está protegida

Google Translate to English:

FRIEND:
it will give free here in Old Havana
on the part of the old town
we break the August 20
oh

I:
it will give free for 2 months?
that is the famous pilot plan ...

FRIEND:
So is…
I am complete in that
They not yet know the prices
for when you go to make full pal who wants to buy
now it is going to provide free installation and two months

I:
but in whole Cuba or the same old Havana?

FRIEND:
it will be free only in Old Havana

I:
give me those details to pull on my blog gossip jejejeejje

FRIEND:
free only in the historical district
if that's clear to test the speed

FRIEND:
later it will market as a service to any
in whole Cuba
this is ... this is going to be a pilot for how the speed and connectivity behaves

I:
cojone but that will be for 2017
hopefully arrive

FRIEND:
I say we break on August 20 in Old Havana

I:
yes but not that of the pilot scheme
but for inter I get to my ...

FRIEND:
not good then this plan when they break massive for everyone
that is not yet defined
or for when prices go receivable
We continue in mimas

I: we must move to Old Havana

FRIEND:
hahaha
you know
let me write a simple little article, for others not me vallan ahead with the news, assured that the source is protected

Thursday, July 28, 2016

Citmatel Editorial -- obsolete

Cuba's Information Technology and Advanced Electronic Services Enterprise, Citmatel, has a Web site where they offer CDs, DVDs, audiobooks, e-books and downloadable documents for sale:

Home page at the Editorial Citmatel site

I've argued that Cuba might have a future as an educational content producer, so clicked on education and found 31 courses in math, chemistry. physics, Spanish, information technology and "other." There are five information technology offerings -- an ebook on computer vision, a DVD with three videos on power supply repair and CDs with a multimedia book on the Promethean digital future and courses on Web design and Microsoft Office 2007. The Web design book features Dreamweaver C3, another 2007 product.

Five information technology titles

Next I browsed ebooks and found 57 entries, 17 of which were children's books. Several were designated as "new," but they were not yet for sale. A final search for "Fidel" turned up ten multimedia and audio-visual titles.

(Ironically, every page on the Citmatel Web site is copyrighted :-).

Offering CDs with courses teaching software from 2007 is embarrassing when the world has access to the Khan Academy, Coursera, etc. It is embarrassing in a nation with El Paquete Semanal.

I have argued that Cuba might have a future as a content provider for the Spanish speaking world -- movies, television programs, educational material, etc., but from what I have seen, the Citmatel material is of no value. It is the sad result of the stifling of information technology in Cuba. (I can't help thinking of the divergence of Cuba and China, both communist dictatorships that first connected to the Internet in the mid 1990s, but with very different policies).

This is obviously not the sort of thing I had in mind when envisioning Cuba as a content exporter. It seems that Cuba will not have a future as a content provider if they are relying on old, state owned organizations like Citmatel.

Tuesday, July 26, 2016

Cuba's intranet portal is now on the Web

Cuba should stick to things in which they have a comparative advantage -- as the saying goes, "do what you do best and link to the rest."

A year ago, a team of students and employees at the University of Information Science (UCI) launched a digital portal designed to unify all services and applications available on the Cuban intranet. Doug Madory discovered that it is now available on the international Web at Redcuba.cu, so I took a look at it.

The front page of the Redcuba portal

As you see above, the portal links to various services -- Papeleta, a "billboard" to advertise cultural events, Reflejos, a blog hosting site, Ecured, Cuba's would-be version of Wikipedia, Andariego, a Cuban map site and Cubadebate, an extensive pro-government news site. There are also links to a selection of government, health and education-oriented material.

But the centerpiece is a search engine for the Cuban intranet, so I checked that out with a vanity search on my name "larry press." It returned seven hits, dated between 2003 and 2015. Two were copies of this article on different sites and one was to this article, but none of the others worked. Three were to a Reflejos blog that had been "archived or suspended" and one returned a database error.

Well, I am evidently not a rock star on the Cuban intranet, but my friend Jesús Martínez Alfonso, who led the team that first connected Cuba to the Internet, must be -- right? Wrong. Five of his eight links were to broken pages that seemed to be trying to list committee members for a session at the recent Informatica 2016 conference in Havana. One of the good links was to this article (in which I had also been mentioned), another to this article on the early Internet and a link to a link to the previous article.

You get the picture -- this search engine cannot be compared to a Web search engine in any way, but that is not surprising. China may be the only nation that can support a search engine in competition with giants like Google, Microsoft or Yahoo. The infrastructure to support such an effort is nearly unimaginable and there is no point in Cuba trying to build a search engine unless it is as a teaching exercise for students at UCI. Building a search engine rather than allowing Google or another service to index their material is goofy. (The same goes for Reflejos and Ecured).

I was not familiar with the Andariego map service, so I also checked it out. As you see below, it has a bug -- only displaying the southern half of the island when you zoom out:

Andariego, the map service

But, if you zoom in, the entire screen fills, as shown here in a search for Playa Giron:

Andariego map of Playa Giron

For comparison, I searched for Playa Giron using Google Maps and turned up this map:

Google map of Playa Giron

In this case, the Cuban map shows more detail than Google's. While they cannot hope to compete with Google search, Wikipedia or a blogging service like Blogger or Wordpress, Cuba is in a position to develop better maps of Cuba than Google.

Cuba should stick to things in which they have a comparative advantage. Content like Spanish language entertainment and educational material and applications in areas where they have special needs and knowledge like appropriate-technology medicine. As the saying goes, "do what you do best and link to the rest."





Tuesday, July 5, 2016

The possibility of leapfrogging telecommunication regulation

I put Cuban telecommunication regulation in context in a previous post. The International Telecommunication Union defines four general generations of regulation and Cuba is stuck at the first generation. But going forward, Cuban regulation does not have to recapitulate the evolution of the last twenty years -- it is possible to leapfrog to fifth generation regulation.

At the recent Global Symposium for Regulators, Sofie Maddens presented a paper on fifth generation regulation (slides). The goal of fifth generation regulation is collaborative telecommunication regulation with other sectors to help achieve the United Nations Sustainable Development Goals." She defined the role of fifth generation regulation as follows:
The interconnected nature of digital societies across the sectors means that there is a need for collaboration between government and industry operators, as well as between regulators across the sectors to provide effective responses to issues arising in networked communication flow. Today, regulators and policy makers are starting to define the foundation as well as the platforms and mechanisms for collaborative regulation with other sectors such as health, finance, education, energy.
She recognizes what Ithiel de Sola Pool told us twenty years ago -- telecommunication infrastructure planning is implicit social planning.

I am not optimistic that Cuba will skip to this enlightened position -- the entrenched bureaucracy and the power ETECSA are formidable barriers -- but Cuba does have a few things going for it.

For one thing, the party line for over 50 years has lauded equity and sharing and those values must have gained some traction in Cuban society and culture. Cubans have been sharing by nature and of necessity for some time -- before Airbnb there were casas particulares, paladares, carros particulares and el Paquete Semanal.

The historic emphasis on education and health care also bodes well for an Internet focused on sustainable development goals. About twenty years ago, my colleagues and I developed a six-dimension framework for characterizing the diffusion of the Internet in a nation, and we used our framework to study many nations, including Cuba. As shown below, one of our dimensions was the absorption of Internet technology in education, healthcare, government and business.

Summary of the state of the Cuban Internet in 1997

Although they are minimal by today's standards, Cuba now has a transportation network, a national university network, a health network, a national school network, etc. These reflect the values and priorities of the society and, along with ETECSA, could form the basis for the sort of collaboration and coordination Maddens envisions.

-----
Update 7/10/2016

A Spanish translation and discussion of this post and another on Cuban regulation in context can be found here.

Thursday, June 30, 2016

Cuban telecommunication regulation in context

The International Telecommunication Union (ITU) publishes an annual report on "Trends in Telecommunication Reform" and in the 2015 edition, they defined four generations of telecommunicationi regulation as follows:

  • G1: Regulated public monopolies – command and control approach
  • G2: Basic reform – partial liberalization and privatization across the layers
  • G3: Enabling investment, innovation and access – dual focus on stimulating competition in service and content delivery, and consumer protection
  • G4: Integrated regulation – led by economic and social policy goals

They determine the generation of a nation's regulation as a function of 50 indicators in their database. The following figure shows the evolution of regulation over time:


As of 2013 fewer than ten percent of the nations on which they had data were stuck in the first generation and about 20% were fourth generation regulators.

It is not surprising that regulation has an impact on performance. For example, mobile broadband penetration is consistently highest and growing fastest in nations with fourth generation regulation.


Cuba was not included in the analysis shown here because of insufficient data, but, if they had been, they would have clearly been a first-generation nation. There cannot be many nations left in the world in which a single state-run monopoly is responsible for wholesale and retail fixed and mobile telephony and Internet access. North Korea may be in the same boat. (The US is rated as a third generation nation).

One can quibble with the methodology used in constructing this (or any) index -- the indicators and the way they are weighted are selected intelligently, but arbitrarily, and the data is self-reported, but there is no denying that it has some merit and Cuba is at or near the bottom of the list.

That is the bad news.

The good news is that just as Cuba could leapfrog technology generations, they could theoretically leapfrog regulatory generations -- they do not have to evolve over time, but could adopt global best practices. Cuba could opt for wholesale and retail competition and the pursuit of economic and social policy goals. (I am not optimistic, but it is conceivable).

I have advocated that Cuba should leapfrog current technology -- plan for future technology and take stopgap measures in the interim -- but that is less important than setting effective policies on Internet infrastructure ownership and regulation.

-----
Update 7/10/2016

A Spanish translation and discussion of this post and another on the possibility of Cuba leapfrogging regulation generations can be found here.


Tuesday, June 28, 2016

Disappointment after President Obama's trip to Cuba

President Obama meeting with Cuban entrepreneurs last March

Shortly before President Obama went to Cuba last March, I wrote a post on Internet-related announcements that might be made during the trip. It was pure speculation -- things like a Havana-Florida undersea cable or copyright and cyber-security agreements, significant infrastructure deployment -- and none of it happened.

However, The President did make some Internet-related announcements. He said Google would be announcing wireless connectivity during his visit and Stripe would offer their Atlas service to Cuban entrepreneurs -- providing a US tax ID, bank account and Delaware incorporation along with use of their global payment service. Stripe said they would be working with the Merchise Startup Circle in Cuba. The President also announced that Cisco would be offering their Cisco Academy training at Cuba's University of Information Science.

So, what has come of all this? Not much.

Google's wireless connectivity is the biggest disappointment. I've speculated on significant infrastructure and content investments Google could conceivably make in Cuba, but all they announced was a single WiFi hotspot at the studio of Cuban artist Kcho. Google supplied 20 Acer Chromebooks and a number of Nexus 5 phones with Cardboard viewers, and got a lot of publicity in return. Perhaps this is a necessary relationship-building step (Kcho is well connected), but in itself this hotspot is less than a drop in the bucket -- 99% hype and 1% substance, like Kcho's previous hotspot.

How about the deal with Stripe and their Cuban partner Merchise? In March, I contacted Merchise and Stripe to learn more about their business relationship. Merchise had nothing to say about their relationship with Stripe and Stripe said "Merchise is a partner in the the Stripe Atlas Network ... it isn't so much that we expect them to represent or market Stripe in Cuba; rather, if they know any specific entrepreneurs or businesses in Cuba for whom Stripe Atlas would be helpful, as a Network partner they can refer those entrepreneurs to us for early access to the Atlas program."

Last week, I asked Stripe if anything had come of the partnership to date and was told they had no concrete updates, but they had "been in touch with many Cuban entrepreneurs." I also asked Cisco about the status of and plans for their Cuban project, and was told that at this time they had nothing to add to what was said in the blog post announcing the relationship last March.

So far, nothing concrete and significant has come of the Internet projects Obama announced.

In addition to these announcements, The President met with Cuban entrepreneurs who described their businesses and briefly discussed them with him. During the meeting, he also introduced AirBnB co-founder Brian Chesky, praising him as a successful Internet entrepreneur and a role-model for young Cubans.

President Obama has continued his emphasis on entrepreneurship, most recently hosting 11 young Cubans at the Global Entrepreneurship Summit.

I've written about Cuban tech startups and support them wholeheartedly, but President Obama's upbeat tone overstates their potential impact. Internet companies focused on the Cuban market will not make a significant contribution until Internet access and the economy are improved considerably. Even then, no company will come close to the success of AirBnB with its $24 billion valuation without global reach. There is a potential market for Cuban educational and entertainment content and network services in Spanish-speaking nations, but Cuban entrepreneurs will not be able to go after those opportunities without major policy changes.

-----
Update 6/30/2016

I heard from the Merchise Startup Circle with respect to their Stripe partnership. They confirmed that they do not represent Stripe or sell Atlas membership -- their role as a member of the Stripe Network is to refer potential customers to Stripe. They are not alone in this -- they are one of over 100 incubators, accelerators, investors, and others who can refer top global entrepreneurs to the program. They do not receive a commission for the referrals and they do not hold equity in the enterprises they refer. Their payment is the satisfaction of supporting and encouraging the Cuban startup community. That is consistent with the tone of their meetings and their academic roots.

As mentioned above, Stripe says they have been in touch with many Cuban entrepreneurs and I bet most of them were referred by Merchise.

Monday, June 27, 2016

An innovative street net with Internet access

This project offers an interesting proof of concept, but could it scale up? We will probably never find out.

I've advocated Cuba's leapfrogging today's technology and planning for the technology of the future, when their political and financial situation is improved, but that leaves the question of what to do in the interim.

To date, public access points are the only stopgap measure ETECSA has employed, but I have suggested others. One of those is to legitimize and systematically support informal local area networks, street nets.

Two recent Cubanet posts point to a novel combination of street nets and ETECSA public access hotspots.

Uncomfortable public access hotspot
The first post is a summary of the history and evolution of the WiFi hotspots a year after they began. It paints a sad picture. It has taken a year to expand from 35 to 128 access points -- a drop in the bucket for a country with over 11 million inhabitants. Access is slow and dropped connections are common. The price is too high for most Cubans and the lines to buy time are long. Furthermore the outdoor facilities are crowded, lack privacy, exposed to rain and heat and attract criminals.

The second post describes an innovative street net project in Pinar del Río. Street nets are not novel in themselves, but this one has a twist -- it uses a nearby ETECSA access point for backhaul to the Internet, enabling people to access the hotspot from the comfort and safety of their homes.

The article does not go into detail on the topography of the street net, the equipment they use, the speeds and latency times the users see, etc., but the project is a proof of concept and it provides an example of Cubans devising appropriate technology -- innovation when faced with a constraint.

The users pay the street a flat fee of 4 CUC per month in addition to paying ETECSA their time online, but they can log on from home rather than sitting outside and can use a desktop computer if they wish to.

Pinar del Rio streetnet with Internet connection
The real breakthrough here is not technical -- it is the decision by ETECSA to allow this to happen. ETECSA turns a blind eye to this connection since it costs them nothing and their utilization and revenue increase without additional investment.

ETECSA is ignoring this connection for the time being, but this sort of project can not scale beyond an interesting proof of concept without system wide planning and support.

I have suggested that, if embraced and supported, street nets like this one could form a part of Cuba's interim Internet infrastructure, but that would require a major policy shift.

What stops Cuba from investigating this sort of innovation and, if it is found to be viable, scaling it up?

One roadblock might be political, having to do with "inappropriate" use of the network, but that would not be the case here since the Internet connections are made through ETECSA and they could perform whatever surveillance and filtering they do today.

Another is financial -- what sort of investment would be required and what would be the return? Since ETECSA does not reveal information on their networks or finances, only they can evaluate the technical and financial feasibility of such a project. If this sort of interim project made sense, one could imagine (dream of) the government allowing foreign investment if needed.

(The people planning a street net project at the University of Havana would be a good choice for conducting a technological and financial feasibility study for such a project).

As I have suggested previously, bureaucracy poses a third roadblock. Cuba has had over half a century to develop a rigid bureaucracy, leading to fear of competition, innovation and stepping out of line.

The following are two short videos -- interviews of WiFi hotspot users and of the young man who linked the street to the public Internet access point. Note that the young man is unwilling to show his face or give his name on camera -- that reflects the biggest roadblock of all, fear.



Monday, June 20, 2016

Cuban UN representative calls for Internet regulation

Belkis Romeu, Third Secretary in the Permanent Mission of Cuba at the United Nations spoke recently at the current session of the UN Human Rights Council.

She advocated "democratic regulation" of the Internet, saying "while we must ensure the promotion and protection of freedom of expression, there are several examples that illustrate the dire need to regulate and make appropriate use of the Internet," and went on to site governmental Internet surveillance and the "ZunZuneo project aimed at creating situations of destabilization in Cuba to bring about change in our political system."

This vague restatement of the "party line" is characteristic of a hollow bureaucracy. I do not know what sort of regulation she is advocating and I have to assume that she is smart enough to realize that the ill-conceived ZunZuneo project was never a significant threat to the Cuban political system. Like the similarly ill-conceived Alan Gross project, it would have been a drop in the bucket had it gone undetected.

In failing, these projects gave the Cuban government propaganda fodder and embarrassed the US, but they don't explain the sad state of the Cuban Internet. Don't get me wrong -- I am in no way condoning ZunZuneo or the Alan Gross effort -- there are no good guys in this post.

Friday, June 10, 2016

A thesis on El Paquete -- a step toward quasi capitalism?

I skimmed the contents of a single edition of El Paquete recently but Dennisse Calle, a sociology student at Princeton University, looked at multiple Paquetes and interviewed distributors and users in researching her senior thesis El Paquete, A Qualitative Study of Cuba’s Transition from Socialism to Quasi-Capitalism.

After a literature review and description of her interview-focused research methodology, the thesis has chapters on the content, distribution/business organization and consumers of El Paquete. She began by classifying the content by type, as shown here.

Most of the content is entertainment -- television, movies and music. The users Calle interviewed "rarely referred to" the items in the "other" category, things like The Bible in audio, software, magazines, music videos, movie trailers, karaoke and (surprisingly) Cuban Music. The one exception was the weekly download of the Revolico want-ad site.

This led her to conclude that El Paquete functions primarily as a diverse alternative to Cuban television, so she drilled down on the television content, looking at its source and category. As shown here, over half of the content is from the U. S., exposing Cubans to U. S. culture and society.

Calle also looked at the genres of the 305 television shows. Soap operas and animations each accounted for 20% of the content and comedy and sitcoms each accounted for 13%. Educational programming accounts for 9% and drama 5%, leaving 20% for "other." The "other" shows included news, reality shows, competition shows, exercise shows, food shows, and talk shows. You can draw your own conclusions as to how these allocations reflect Cuban taste and influence their view of the outside world.

She also investigated the distribution organization. The top level consists of unknown compilers who collect the content. Below them are packagers who put the weekly distribution together, inserting local content, including ads, that varies around the country. At the bottom of the organization are distributors who sell it to everyday Cubans -- from store fronts or door to door.

From the compilers to the distributors, this is a capitalist business, but the distributors blend capitalism and sharing. Calle interviewed five distributors -- three with storefronts and two who went to customer's homes. Some transactions were done at "list" price, but not all. For example, a distributor might offer a low price or free content to someone who could not afford to pay more or to family and friends.

Of the 45 people Calle interviewed, 17 paid for or at some point had paid for El Paquete and 28 did not pay for it. Those who paid were distributors, self-employed cuentapropistas, workers for state enterprises, a student, an artist and one person with family abroad. The 28 who did not pay got their content from a friend, neighbor or family member.

While not profit maximizing, this sharing and discretionary pricing builds social capital, which one day may yield monetary returns and is valuable as an end it itself. As Richard Feinberg points out, Cubans have been brought up to believe that equity and social solidarity are important goals.

Calle sees El Paquete as one factor (along with remittances, tourism, self-employment, etc.) contributing to the transformation of Cubans' sense of self -- seeing Cuba in a global perspective and seeing themselves as consumers with discretionary, luxury spending power:
In a country where materials, shopping, and consumption are limited to food and maybe clothing, El Paquete becomes a luxury, a form of asserting one’s independence from the state’s attempts to suppress individuality.
Consumer choice is not the only element of capitalism surrounding El Paquete. Advertising is another -- El Paquete provides businesses with a means of mass-market advertising. Cubans are also aware of copyright, and Calle reports that many consumers would prefer to obtain the content legally.

Competition is essential for successful capitalism and, in some cases, the retail distributors have a choice of packager and the end users have a choice of retail vendor. This leads to capital investment (perhaps a fast PC for duplicating files), good customer service and the emergence of entrepreneurship. (It is said that El Paquete is the largest private employer in Cuba).

If Cuba can exploit positive aspects of capitalism within a society that continues to value equity and social solidarity, we may see a uniquely Cuban capitalism from which we can all learn.

The thesis is not online, but you can request a copy from the author, dcapupp at princeton.edu.

Wednesday, June 8, 2016

Cubans and the Panama Papers


The Panama Papers is a collection of 11.5 million documents (2.6 terabytes) that was leaked by an anonymous source to Süddeutsche Zeitung (SZ), a German newspaper. The documents were from the internal files of Mossack Fonseca, a Panamanian law firm that creates anonymous offshore companies around the world. The database on 320,000 offshore companies may be accessed here.

SZ did not have the staff and resources to analyze that many documents, so they decided to cooperate with the International Consortium of Investigative Journalists, a global network of more than 190 journalists in more than 65 countries who collaborate on in-depth investigative stories.

(The story of this massive, Internet-based collaboration is amazing in its own right. For more on the ICIJ and the methodology of this investigation, check out this excellent 15 minute podcast, with transcript).

Three weeks ago, we learned that the leaked data revealed the existence of dozens of businesses associated with senior figures in Cuba.

Now the Miami Herald has published an in-depth story showing that the Cuban government used Mossack Fonseca to "create a string of companies in offshore financial havens that allowed it to sidestep the U.S. embargo in its commercial operations." They have identified at least 25 companies registered in the British Virgin Islands, Panama and the Bahamas that are linked to Cuba, enabling the Cuban government to import and export goods and invest funds abroad.

Twenty five companies linked to Cuba

For investigative reporter Nora Gámez Torres' video summary (2m 20s) of her findings click here.

I have the feeling that this story is just beginning to unravel. It is depressing.

Monday, June 6, 2016

Recommended interview: Open for business: Building the new Cuban economy

NPR correspondent Tom Gjelten (l) and author Richard Feinberg

On May 31, the Brookings Book Club hosted Nonresident Senior Fellow Richard E. Feinberg and NPR Correspondent Tom Gjelten in a discussion of Feinberg’s new book, “Open for Business: Building the New Cuban Economy.”

The interview, which focused on international diplomacy, changes already underway in Cuba, successful Cuban entrepreneurs and foreign investments, and scenarios for Cuba’s future development path, was followed by a discussion with three young Cuban leaders.

I usually focus on the Internet, but I really liked this interview and the context it provides. You can watch the entire video (1 hour, 18 minutes) below, but let me give you a few (subjective) highlights:
  • Cuba and North Korea are the only two traditional, centrally-planed economies in the world.
  • No one in Cuba is saying "to get rich is glorious," which Chinese leader Deng Xiaoping is often quoted as saying.
  • Cubans have been brought up to believe that equity and social solidarity are important goals.
  • Nations lending money to Cuba have realized that Cuba often fails to make payments. (This 2010 Wikileaks memo from the US Interests Section in Havana makes the same point).
  • The Cuban government is counting on tourism and remittances for short-run economic growth.
  • President Obama anticipated this -- tourism and remittances have increased substantially since he opened to Cuba and much of that revenue goes to private citizens, not the government.
  • The Cuban army controls the Gaviota Group tourism and hotel conglomerate and they are independent and not audited by the government. Does Cuban telecom monopoly ETECSA enjoy the same autonomy and financial freedom?
  • Bureaucrats are afraid to sign documents -- there is a downside to making decisions in Cuba. (This constrains the Cuban Internet).
  • An open, prosperous Cuba will become a labor importing nation, thereby compensating for the aging population.
A couple of final notes:
  • It was cool to see what Tom Gjelten looks like (and how he spells his name :-) after hearing him for many years on NPR.
  • I did not watch the video, but listened to the audio while working out at the gym. There are no slides or graphics, so the audio is all you need, but the soundtrack is terrible. It's too quiet, so I made an amplified version that you can download here.
    Here's the video if you prefer that:



    -----
    Update 6/7/2016

    My colleague Armando Camacho has posted a Spanish translation of this post on his blog Carpe Diem.

    Friday, May 27, 2016

    Inside an edition of El Paquete

    I've been writing about El Paquete for some time, but had never seen a copy. This week, someone who will remain annonymous, gave me a copy of the Paquete from the week of March 16, 2016 and I've had a chance to poke around it a bit.

    As you see, it is not, as is usually claimed, a terabypte, but is only 760 gigabytes. Regardless, it took around three hours to copy from one USB hard drive to another -- I hope the professionals working with El Paquete in Cuba have devices for more rapid duplication than my laptop. While it is less than a terabyte, it is huge with nearly 13,000 files and 1,400 folders.

    The copy I received did not have any sort of user interface software. Perhaps that is good enough for the El Paquete distributors, who are familiar with file structure and content, but end users deserve something better than a Windows Explorer view of the file system, as shown below. If it does not already exist, someone should write a user interface program that lets users search for and select, copy and view content.


    As you see there is a variety of content -- in English and Spanish -- and I poked around a bit. The following are a few things I noticed.

    I wonder who decides what to include and what criteria they use. For example, I found two old Hollywood cowboy movies, four US spring traing baseball games and an Australian formula 1 car race. Why those movies? Why those games? Why that race?

    Someone at Netflix told me that I would find their content, but I did not find any. There was a House of Cards video subtitle (.srt) file, but no video episode. This is 100% speculation, but I wonder if the absence of Netflix content is tied to the possibility of their investing in infrastructure or producing content in Cuba.

    There are directories of Android, IOS and Windows software. I wonder if the programs are free of malware.

    The quality of a lot of the video I saw was poor, making me wonder how it is captured -- perhaps it is compressed and downloaded over slow connections. Another possibility is that it was not copied from a digital version, but recorded through the so called "analog hole" during playback. The commercials had been cut out of some of the foreign video, but others included the original commercials, again suggesting that they had been recorded during playback. There were also current Cuban ads like the one shown here.

    There is a lot of text as well as audio and video material -- for example scanned copies of popular magazines. While the commercial magazines are sometimes out of date and difficult to read, government publications like Granma and official documents like the text of laws are perfect, legible PDFs. It would seem that the government is providing this content directly. Some have gone as far as asserting that the government actively supports El Paquete, and they surely do not discourage it.

    Whether or not the government supports El Paquete, they allow it to exist, subject to an informal agreement to remove violent, pornographic or Cuban political content, but I found one delightful example of political content, an episode of Samantha Bee's "Full Frontal." As a cord cutter, I had never seen the program, but the episode was 100% political -- making fun of the U. S. right wing politicians. Evidently U. S. politics are not a taboo subject.

    In the past, I have suggested that Cuba could use the Internet to export Spanish-language entertainment and educational content and I found quite a bit of Cuban video on El Paquete. I did not screen all of it, but every program I did look at was offered by a Cuban company, LAY Agencia Publicitaria, which has the slogan "Made in Cuba and for the world." I wonder if the folks who run El Paquete own that agency and see pivoting to Cuban content export as their "exit strategy" in a post-piracy Cuba. (A legitimized Paquete is another possiblity).

    Saturday, May 7, 2016

    Connection speeds from the LACNIC 25 Conference, hotels and the Google-Kcho Center

    The LACNIC 25 Conference was held at the Havana Convention Center (Palacio de Convenciones) this week and Doug Madory, a frequent contributor to this blog, was there and sent me speed tests from the Convention Center and his hotel:

    Convention Center speed test

    Hotel speed test

    Doug also forwarded a hotel speed test run by another attendee, Martin Hannigan, @TheIcelandGuy:

    Hotel speed test

    Access at the hotels was what we have come to expect -- around 1 mbps -- but connectivity at the Convention Center was much faster. I don't know whether that much bandwidth is always available at the Convention Center or if ETECSA allocated extra resources for this hi-tech conference.

    Doug's next speed test was run at the Google-Kcho Center. As shown below, he used one of the center's chromebooks and connectivity was about four times the speed of the hotels.

    Google-Kcho center speed test

    Doug said there were maybe 4 or 5 chromebooks in use at the time he ran the test -- "Mostly young people on Facebook so not bandwidth intensive."

    It is clear from this that the initial report that the center would provide connectivity for 40 simultaneous users at 70 times the speed of ETECSA's public hotspots, was incorrect. My guess is that they should have said 70 mbps backhaul shared among all the users currently online.

    Finally, it is interesting to note that all four link speeds are roughly symmetric. We expect download speeds to be faster than upload speeds in the US because we download a lot more than we upload -- about 70% of our downstream, peak-period traffic is streaming entertainment.


    But, in Cuba, home connections are over dial-up lines and the connections at public access spots and hotels are too slow for video entertainment. One mbps is fast enough for audio and even low-quality video chats, so symmetric bandwidth makes sense (as long as Cuba has El Paquete for the distribution of entertainment).

    Thursday, May 5, 2016

    Politically correct rhetoric at a technical conference in Cuba

    In a recent post, I argued that the US embargo, the poor state of the Cuban economy and fear of free information had stifled the Cuban Internet at its inception in 1996, but that twenty years later, those constraints were significantly reduced. I suggested that the Cuban Internet was being held back by mundane bureaucracy and political correctness.

    We got an example of that at the Latin American and Caribbean Network Information Center (LACNIC) conference in Havana this week. LACNIC is one of five regional Internet registries and technology and policy leaders attend their conferences.

    LACNIC assigns Internet addresses for networks in the region.

    It is noteworthy that LACNIC25 was held in Cuba this year and, since it is a prestigious event, ETECSA was one of the sponsors and ETECSA president Mayra Arevich Marín gave a talk.

    She said that the "economic, commercial and financial embargo imposed by the United States was the main obstacle to the development of ICT and the Internet in Cuba." She also called for regional cooperation to stop "the illegal use of computer systems of nations by individuals, organizations and states to attack third countries"

    Ms. Arevich Marín knows that President Obama has essentially ended restrictions on the export of Internet infrastructure and services to Cuba and they have succeeded in financing and doing business with companies from China and other nations.

    I assume the illegal use of computer systems she alluded to are the foolish efforts of USAID -- projects like ZunZuneo and the Alan Gross affair. Again, I think she knows that, had they gone undetected, these projects would have not made a huge difference, but they have been used as propaganda tools.

    Bureaucrats in any nation are under pressure to remain politically correct and Cuba's bureaucracy is close to 60 years old. I hope this sort of rhetoric is only for show.

    Tuesday, May 3, 2016

    Hollywood comes to Havana, what about Havana coming to Hollywood?

    American movie companies are shooting in Cuba. When will Netflix, Google, Amazon, Hulu and "Hollywood" begin producing content in Cuba?

    The movie Fast and Furious has been filming in Cuba and Papa Hemingway in Cuba, a biography of Ernest Hemingway, which was filmed in Cuba in 2014, is now in theaters in the US.

    The Hemingway movie was shot before the December 2014 US-Cuba rapprochement began and more productions will probably use Cuba as a location. Cuban production will continue as long as the government makes it attractive, but, to me, that is less interesting than the prospect of Cubans producing entertainment and educational content for Spanish-speaking audiences.

    The potential Spanish language market is large. There are 427 million Spanish speakers in the world and 339 million English speakers. About 45 million people speak Spanish as a first or second language in the US alone.

    Distribution of Spanish speakers by county

    If I were running the show at Netflix, Google, Amazon, Hulu or "Hollywood" in general, I would be thinking about setting up a production center in Cuba. Cinema and other arts are alive and vibrant in Cuba and there are tons of overeducated, underemployed creative professionals.

    Take Google for example. They currently have YouTube production spaces in Los Angeles, London, Tokyo, New York, São Paulo, Berlin, Paris, Mumbai and Toronto. Will the next one be in Havana?

    Or how about Netflix? Netflix was among the first US companies to "open" to Cuba, but since there is virtually no Internet infrastructure capable of streaming their content, we have to wonder what that means. Cubans do not stream Netflix productions, but they do watch pirated versions thanks to El Paquete Semanal. Someday, they might see Cuban royalty revenue from a legitimatized Paquete Semanal or, in the far future, streaming, but, with the approval of the Cuban government, they could be producing content in Cuba today.

    Crowds watch shooting of Fast and Furious

    Shot in Cuba and now showing in the US

    -----
    Update 5/14/2016

    I've been speculating about the opportunity Netflix (and others) have for creating Spanish language video content in Cuba. Netflix was one of the first US companies to offer service (that no one could afford or access) in Cuba and they held an executive off-site meeting in Havana last month.

    Well, here is some related speculation.

    Dave Temkin, Netflix VP of Network Strategy and Architecture, posted an upbeat article on Cuba after their off-site meeting and returned for the LACNIC conference last week in Havana. Might Netflix (or Google) be thinking of building a data center in Cuba?

    Tuesday, April 26, 2016

    What stopped the Cuban Internet in 1996 and what is stopping it today?


    The problem today is bureaucracy and its companions -- fear of competition, change and stepping out of line.

    Cuba connected to the Internet in 1996, but three factors stifled the Cuban Net: the US embargo, economic depression during what the Cubans call the "special period" after the disintegration of the Soviet Union and the Cuban government's fear of free information, which was also fed in part by the Soviet collapse. As Raúl Castro said in 1997, "Glasnost, which undermined the USSR and other socialist countries consisted in handing over the mass media, one by one, to the enemies of socialism." Cuba would not make the same mistake.

    Twenty years later, time has eroded each of those obstacles. China and other nations have filled the gap left by US Internet infrastructure suppliers -- Huawei has replaced Cisco and China played a major role in the financing and construction of the undersea cable connecting Cuba and Venezuela.

    While Cuba remains poor, the economy has improved since the special period and there is frustrated demand for Internet service. This should have fueled government and/or private investment, but it has not. Cuba's Human Development Index -- a measure of national income, health and education -- is the second highest in Latin America and the Caribbean, but it is the least connected nation in the region.

    Finally, the Cuban government points to USAID projects like ZunZuneo and the Alan Gross affair as proof of a US war on the regime. That makes for good propoganda and provides an excuse for Cuba's lame Internet, but I think Cuba's leaders are smart enough to realize that these efforts, had they succeeded, would have been drops in the bucket. Furthermore, Cuba has had twenty years to observe nations like China, which encourage the Internet while selectively blocking content and, more important, surveilling users.

    So, if I am right, what is stopping the Cuban Internet today? Or, to take a concrete example, why would ETECSA, Cuba's Internet/phone/mobile monopoly, want to deploy outdated DSL in homes or 3G mobile technology? Who made those decisions and why?

    The problem today is bureaucracy and its companions -- fear of competition, change and stepping out of line.

    Consider AP journalist Michael Weissenstein's coverage of the recent Communist Party Congress. He reports that "Raúl Castro blamed 'an obsolete mentality' and 'attitude of inertia' for the state's failure to implement reforms meant to increase productivity."

    Weissenstein goes on to state that First Vice President Miguel Diaz-Canel, long seen as Castro's successor, agreed, saying that obsolete ways of thinking led both to inertia in enacting reforms and "a lack of confidence in the future." Diaz-Canel also stated that "Along with other deficiencies, there's a lack of readiness, high standards and control, and little foresight or initiative from sectors and bureaucrats in charge of making these goals a reality," in an excerpt of a speech broadcast on state television.

    If you question what Castro and Diaz-canel are saying, check out the goofy list of occupations that are eligible for self-employment in Cuba, then read New York Times columnist David Brooks' experience as a member of a delegation of distinguished American writers, artists, musicians, and cultural leaders that traveled to Cuba last week. Brooks wrote:
    The country has many things going against it as it tries to make the journey. It suffers from the dysfunctions that afflict countries that have giant bureaucratic states lying heavy on society. Those at the top have been trained all their lives to regulate and control. The governing elites speak (at great length) in lifeless ideological jargon.
    It would be depressing if that were the end of the story, so let me digress on what makes Brooks optimistic. When he met with Cuban artists, he felt "a sense of national solidarity and a confident patriotic spirit that is today lacking in the United States." He attributes Cuban national pride to their impressive cultural achievements and singles out the writing and life of José Martí, the 19th-century poet and journalist "who shifted the national imagination, who told Cubans who they were and what their story was" -- inspiring a "common faith in a dignified future."

    Martí died fighting for Cuban independence from Spain, but feared the possibility of a cultural and economic takeover by the United States. You have to admire a man who both sides of the Cuba debate claim as theirs. He is Cuba's national hero, but, when the Reagan administration began broadcasting "Radio Free Europe/Radio Free Liberty" to Cuba, they named it "Radio Martí" and Obama honored him during his recent Cuban trip. Brooks writes that he "was amazed how much Martí’s name came up in conversation [during the trip] and how little Fidel Castro’s did."

    José Martí Memorial. He was honored by Reagan, Castro and Obama.

    Having digressed, let's get back to the Internet.

    The grip of bureaucracy on the Cuban Internet is not unique. Bureaucracy arises wherever game-playing, not merit, determines success. Excellence and hard work -- "rate busting" -- can become liabilities.

    Many nations have made transitions since the dissolution of the Soviet Union -- Cuba is only the latest. Cuba can consider and learn from the Internet strategies of nations from Estonia to Russia. (That should be an easy choice).

    Cuba is also free to consider the Internet infrastructure ownership and regulation policies of non-Soviet governments and create a uniquely Cuban Internet -- one that benefits the Cuban people and provides ideas for the rest of the world.

    The old guard leaders and bureaucracy made a strong showing at the recent party congress, and their view may prevail -- the future of Cuba and the Cuban Internet is uncertain. As José Martí said “The problem of independence did not lie in a change of forms but in change of spirit." Pogo got it too --

    Wednesday, March 30, 2016

    Opening of the Google+Kcho tech center -- much ado about not much (again)

    The opening of the Google+Kcho technology center was covered in an article in CubaDebate, which includes 14 photos and two videos.

    Google has equipped the center with 20 Acer Chromebooks and a number of Nexus 5 phones and Cardboard viewers. Each Chromebook comes with 100 GB of cloud storage.

    The man is in the wheelchair demonstrating Google Cardboard for the press. Kcho
    is on the left and Google's head of Cuba operations Brett Perlmutter is to his right.

    I have to admit that I find this disappointing for a couple of reasons.

    First, it was widely reported that this center would provide connectivity for 40 simultaneous users at 70 times the speed of ETECSA's current public hotspots, but the article just says ETECSA has provisioned one of their access points at the studio. If that is the case and they limit access to 40 simultaneous users -- 20 using Chromebooks inside and 20 more using their own devices outside -- performance should be better than the other ETECSA hotspots, but the speed per user will be more like twice as fast than 70 times as fast.

    The studio will be open to the public five days a week, from 7 a.m. to midnight. I guess Kcho will have the whole link to himself on weekends.

    Still, even if it is no faster than a public hotspot, it will be free. That sounds good, but the lines waiting to get in will run the length of the Malecón. How will they ration access -- who will get in and for how long? Perhaps access will be reserved for professionals.

    The article asks us to imagine how great it will be for the robotics faculty at CUJAE, a Cuban university, to hold a video conference call with researchers at the Alphabet-owned robotics company Boston Dynamics. Two problems -- that sounds a little patronizing and it has been reported that Boston Dynamics is up for sale.

    I'm also disappointed in Google. They have developed and deployed amazing technology and are a huge company that has invested a lot in well-publicized trips to Cuba. Couldn't they have afforded to contribute their own high-end Pixel Chromebooks and Nexus 6 phones instead of Acer Chromebooks and Nexus 5 phones? And, how about a terabyte instead of 100 gig? It's not a big deal, but it feels cheesy given the hype surrounding the opening of the center.

    There is too much kowtowing and hyperbole -- "Kcho's magic, Etecsa's megas and Google's technology have converted this place into the first connection point on the island, completely free for all Cubans." The article makes a Google Hangout on Air and Cardboard VR sound like cutting edge technology.

    Another disappointment was Kcho and Leysi Rubio, head of the communications (press relations?) department, looking a gift horse in the mouth by taking pot shots at the US government and the "blockade." There is no suggestion that Cuban government fear or mistrust might impose any limitations.

    Regardless, the valiant Kcho vowed to persevere -- he doesn't know how -- but, somehow, he will keep doing things. Good grief.

    The press coverage of this project was also disappointing. A Google search for "Google Kcho" news turns up hundreds of articles on the project during the last few days. The story was covered in many nations and languages -- from Turkey's Daily Sabah (in English, Turkish or German) to the New York Times. The Internet tech press all jumped on the story.

    I've only read a fraction of these stories, but they all have one thing in common -- they are either direct copies or paraphrases of the story published by the Associated Press after an exclusive tour of the facility on March 21, 2016. They even repeat a symmetric connection speed of 70 megabytes per second, which I suspect should be 70 megabits per second.

    I would not be so disappointed if this were an isolated case, but I am afraid that click-supported Internet news may inevitably be superficial, redundant and concentrated.

    I may have gotten some of this wrong, but it has the same publicity-stunt feeling as Kcho's first free hotspot. Let me know if you get online at the Google-Kcho center and your experience is different. I'd also be curious to know which, if any, of the Google Drive services are blocked in Cuba.

    -----
    Update 4/4/2015

    Kcho is well connected. My friend Sam Lanfranco pointed me to this photo of Kcho (left) waiting with Foreign Trade and Investment Minister Rodrigo Malmierca and member of the Cuban Parliament Esteban Lazo Hernandez for the arrival of U.S. President Barack Obama at the Gran Teatro de la Habana Alicia Alonso.



    -----
    Update 4/18/2015

    This report on the Google+Kcho Center clarifies the bandwidth question. The original AP story said connectivity would be 70 megabytes per second, leading to repeated assertions in the press that connectivity would be 70 times faster than the typical 1 megabit per second service at the 60 paid public access hotspots around the island.

    It turns out that users were disappointed when they found that they had difficulty streaming YouTube videos.

    Since there are only 20 simultaneous users in the center, it seems that Google+Kcho has the same backhaul speed as the other public access hotspots. The "70 megabytes" per second must actually be 70 megabits per second backhaul for the entire center, not for each user.

    I don't know whether this misunderstanding was an intentional effort to mislead the public and perhaps even President Obama or just the Internet press copying what they had read in the AP story.

    In addition to slow connections, it turns out that users are not allowed to bring phones, laptops, cameras or flash drives to the center and sites like Cubaencuentro, Revolico and 14ymedio are blocked.

    The advantage this hotspot has over the other public access hotspots is that it is free and the users do not have to bring their own devices -- but free means long lines waiting to get one of the 20 tickets that are given out each hour.

    Friday, March 25, 2016

    Internet-related announcements around President Obama's trip to Cuba

    There were important financial and university-related announcements.

    Last month, I speculated on possible Internet-related announcements that might be made in conjunction with the visit of President Obama. Nothing I mentioned came up, but let's look at what was announced just before and during the President's visit.

    The week before the President arrived in Cuba, changes in regulations on travel, trade and finance were announced. Two of those changes were:
    • Cuban origin software is now authorized for importation into the United States.
    • Non-immigrant Cuban nationals in the United States will be permitted to earn a salary or compensation consistent with their visa status. U.S. companies are now also authorized to sponsor or hire Cuban nationals to work or perform in the United States.
    That should clear the way for Cuban apps in Google, Apple and Microsoft stores as well as outsourcing. The ball is in Cuba's court.

    The same week Verizon announced an agreement to provide direct telephone connections to Cuba. That is nice, but it does not provide Internet connectivity. There were rumors that AT&T would make an announcement during the visit, but, as far as I know they did not.

    During the visit, several further developments were announced.

    Silicon Valley payments startup Stripe will make it possible to give Cuban entrepreneurs access to the US financial system. Cubans will be able to incorporate a US company, set up a US bank account, and start accepting payments from the US. Stripe will be working with the Merchise Startup Circle, which has been working to form and facilitate a Cuban startup community. Again, the ball is in Cuba's court. Will they allow self-employed workers or cooperatives to open those accounts?

    There was more financial news. Paypal expects to bring Xoom, their global money transfer service, to Cuba by the end of the year and Western Union announced that they would phase in money transfers starting at the end of the second quarter. (It seems like they are already offering that service -- perhaps a reader can clarify this for me).

    Priceline subsidiary Booking.com will offer online reservations at Cuban hotels and Airbnb announced that they were no longer restricted to serving US customers and would book rooms for anyone travelling to Cuba.

    Google tech center -- not sure what it will provide. Photo by Ramón Espinosa/AP

    The most widely publicized announcement was that Google would offer free, high-speed Internet access to Cubans at a technology center belonging to the Cuban artist Kcho. The center will also have laptops, Google Cardboard and phones.

    The announcement referred to 70 mbps speeds and 40 simultaneous users, but it is not clear whether those users will each have 70 mbps or they will be sharing it. I have asked Google for clarification, but have not received a response.

    If it is shared, it will be similar to their current hotspots, but free. If it is per user, it will be inspirational and novel and there will be very long lines waiting to get in.

    Regardless, like Kcho's earlier free access over DSL, it is a drop in the bucket and to a great extent a publicity stunt. That being said, both the President and Google executive Brett Perlmutter implied that this was just Google's first foray into Cuba and they hoped to announce more in the future.

    President Obama announced a $1 million fund for US-Cuba academic partnerships. The impact of this program will not be immediate, but it is important. Today, the few Cuban students with Internet access have slow connections and tight usage caps. Imagine the reaction of a Cuban exchange student in a computer lab in a US university with gigabit connectivity. Similarly, what insights might come from the exposure of a US student to the constraints on and innovations by Cubans?

    Cisco training at UCI may foreshadow competition for Huawei.

    A university was also involved in what may have been the most important announcement. Last January, a high-level US delegation travelled to Cuba. At that time, Cisco proposed the establishment of a Cisco Academy training and certification program at Cuba's prestigious University of Information Science. The proposal has been accepted.

    This is great news and it implies a Cuban willingness to be open to competition in the infrastructure market. In the early days, Cisco equipment was used in Cuba, but today Huawei is dominant. Cisco-certified graduates will be ready to work with Cisco equipment.

    Now, if Cuba would also be willing to allow competition in the Internet service market ...

    -----
    April 17, 2016

    A special edition of Cuba's weekly sneakernet, El Paquete Semanal, contains full coverage of President Obama's trip to the island. The distribution features coverage of the his speeches, his press conference with Raúl Castro, a short documentary on his life and his and his comedy skits with Cuban comedian Pánfilo.

    You can see the comedy sketches below, but neither is a threat to Saturday Night Live.





    Cubans can also purchase a pirate DVD covering President Obama's trip:

    Real Time Analytics