Call While You Can

Much to AT&T's dismay, foreign companies have found a way around the restrictions on calling Cu ba from the U.S. -- for now, at least

It's your mother, her careworn Iberian face framed in graying hair, smiling delightedly and holding a telephone receiver to her ear. The past few weeks, the posters and ads have been cropping up all over town: "No se olvide de su madre, ella esta esperando su llamada," they urge. "Don't forget your mother, she's waiting for your call."

It's not that the thousands of Miamians with family members in Cuba have forgotten to call; it's that they can't get through. In this age of satellite linkups and fiber-optic cables, the technology of U.S.-Cuba phone connections is stuck in the Sixties; specifically 1963, the year the U.S. imposed its Cuban trade embargo.

AT&T provided service to the island then, and it still does, but the embargo prohibits the communications conglomerate from upgrading its circuits, which number fewer than 100. The circuits that do exist can't begin to handle the steadily rising demand. There's no such thing as direct-dial A all calls go through operators A otherwise the lines would be jammed 24 hours a day. Even worse, Hurricane Andrew downed two antiquated transmitting towers in Goulds and Florida City, the only telephone links between the U.S. and the island. Now calls from the U.S. must be routed through Italy, an arrangement Castro demanded after the towers were destroyed. At one time, less than one percent of the 60 million annual attempts to call Cuba via AT&T actually got through, according to the company's director of corporate affairs in South Florida, Barry Johnson. Since the hurricane, the success rate has been virtually nil.

But there are alternatives. Your mother knows. A caller can link up via any third country that maintains modern communications with Cuba. Say you have a friend in Mexico whose phone is equipped for conference calls. You call her; she calls your uncle in Havana and then connects the two of you. Not surprisingly, the fact that this simple maneuver has large-scale applications has not been lost on several technology-minded entrepreneurs. In the past few years, Canada, one of Cuba's major trading partners, has proven especially hospitable to an increasing number of businesses founded exclusively to broker telephone calls between the U.S. and Cuba.

At least four Canadian companies handle a total of more than 500 calls per day, according to estimates by two of those business owners. A few similar operations are said to be based in Spain, Italy, and New York. Although no one is sure exactly how many brokers there are, they unquestionably provide a service people are willing to pay for. (The cost of a ten-minute call through a Canadian broker ranges from $30 to $60, depending on time of day and subscriber plans, while AT&T charges less than $20.)

Companies set up in the U.S. to provide similar services have so far met a quick end. TeleCaribe, a Miami storefront operation opened in January 1991, was out of business by September, after two federal agencies determined the company was violating the trade embargo and hadn't obtained the necessary U.S. permits. To date, the enterprising Canadian capitalists have avoided getting caught up in the ideological and economic conflicts between the U.S. and its defiant neighbor. But as the services proliferate, they're beginning to rile AT&T, and they also are likely to attract scrutiny from the U.S. government.

Hola Cuba Ltd., the company that admonishes Cuban Miamians not to forget their mothers, is merely the newest A and possibly the most aggressively marketed A Cuba-calling service. A Toronto-based subsidiary of International Telecommunications Corporation in Saudi Arabia and less than a month old, Hola Cuba already has spent almost $20,000 on advertising, according to Matthew Taylor, one of the company's owners. Hola Cuba currently puts through about 50 calls per day, most of them from South Florida, says co-owner Corrine Griffiths, and that number is steadily increasing.

To make a Cuban connection, the U.S. caller simply dials Hola Cuba's toll-free 800 number; the Toronto operators in turn call Cuba via Canadian regulated carriers Bell Canada and Teleglobe, and connect the two parties via conference call. Callers pay a $15 initial fee per call, plus $2.50 per minute. For customers who pay $250 for an annual subscription, the set-up fee is dropped and the per-minute charge is reduced by ten percent. Subscribers also receive a white plastic membership card. "We're trying to enhance customer loyalty," Taylor says.

At least so far, Hola Cuba doesn't handle anywhere near the volume that its main competitor does. Toronto Communications, two years old in June, puts through between 375 and 420 calls per day, according to manager Stella Oyarzun, for a service that is essentially Hola Cuba in reverse: The person in Cuba places a collect call to Toronto Communications, whereupon the Canadian company connects the call to its U.S. destination and bills the U.S. number.

An optimistic Matthew Taylor says Hola Cuba's year-end goal is to handle 500 calls per day, and the company will increase its monthly advertising budget in coming months to accomplish that. "We intend," he asserts, "to make every Cuban in the United States aware of who we are."

He may not be entirely happy with all the attention. A spokesman for the U.S. Treasury Department, whose Office of Foreign Assets Control enforces the Cuban trade embargo, affirms that the Canada bypass maneuver violates the embargo, and lawyers for the Federal Communications Commission say they have doubts about whether the Canadian companies are complying with other U.S. regulations.

Officials at the FCC, which governs all telephone operations in the U.S., say they can't know whether services such as Hola Cuba and Toronto Communications are violating U.S. laws unless they undertake a formal investigation. "This is the first we've heard of it," says Robert W. Spangler, deputy chief of policy for the enforcement division of the FCC, when reached at his office in Washington, D.C. "It raises a number of issues which aren't easily discussed over the phone."

John Copes, a lawyer in the FCC's international division, points out that the companies may be violating a federal law requiring that carriers obtain permission from the FCC before providing telephone service between the U.S. and any other country. An inquiry from New Times inspired Copes to look into whether the Canadian brokers had received authorization; he found no evidence that they had. As of Monday, however, the FCC had not opened an investigation.

If any of the Canadian companies were to apply for authorization, the FCC would likely consult the U.S. Treasury Department, in order to determine if the Cuban embargo were being violated. Under international communications laws, the governments of both the country of origin and the destination of any international call receive a portion of the fee charged for the call. Because of the embargo, the U.S. government deposits the Cuban government's share of these fees in an escrow account in Washington, to be released only when the embargo A or the current government A ends. Under the third-country calling arrangement, of course, the Castro government does receive its share of fees from Teleglobe, Canada's international carrier. (Taylor of Hola Cuba says neither his nor other Canadian services pay anything directly to the Cuban government; they pay Teleglobe to complete the calls.)

It can be argued that U.S. money is indirectly going to Cuba in the process, and an informed source in Washington who asked not to be identified says the Clinton administration might decide to crack down. "There are lots of embargoes on different countries and citizens often engage in activities that violate the embargo, and Treasury doesn't prosecute each one. But if the consequence of U.S. citizens dealing with these companies is U.S. dollars flowing to Cuba," the source says, "and if Treasury wants to do something about it, it conceivably could."

The Cuba Democracy Act of 1992, signed by George Bush last October, calls on U.S. allies, including Canada, to join in tightening the trade embargo. But each government must agree to participate, and Canada, with its commerce with Cuba on the rise, is among the nations expected to ignore the U.S. request. "[Canada has] different political and economic objectives," explains Hola Cuba's Taylor. "We've never really had the fear of communism like the United States has."

The new law, named after its principal sponsor, Democratic Rep. Robert Torricelli of New Jersey, also includes provisions intended to improve personal communications A telephone and mail service A between the two nations. Under the law, AT&T could significantly upgrade its service to Cuba; the company has long wanted to activate a six-million-dollar undersea telephone cable from West Palm Beach to Cojima, which was installed in 1989 and never used. But no one in the U.S. can improve anything without agreement from the Cuban government, and Castro so far has refused to cooperate because the U.S. won't release funds from Cuba's blocked bank account to cover installation and maintenance. "From our end we did as much as we could do," says Larry McDonnell, Torricelli's press secretary. "But it's Castro's dictatorship that is really not permitting upgrading."

AT&T, which loses money every time an operator fruitlessly attempts to connect a call to Cuba, also has begun "looking into the legalities of the whole issue," according to Al Quintana, the communications behemoth's public relations manager for Caribbean and Central American issues. "These companies are operating in Canada, so it's a different situation for them there, but they're advertising to our customers here in South Florida. That's the concern, especially with what seems to be the emergence of more and more." And while the calling services obviously aren't diverting any of its customers right now, AT&T has every intention of resuming and improving its service to Cuba in the future. Quintana declined to be specific about what AT&T might do if it detected any improprieties, a likely step would be a written complaint to the FCC, which would initiate a formal investigation.

And for the time being, the third-country calling services continue to satisfy a great demand. Hola Cuba is moving ahead with ambitious plans to expand service to Puerto Rico by May 1 and forge alliances with sales and marketing agents who can provide access to more potential subscribers. One such agent in Florida who doesn't want his name used says he has indeed considered representing Hola Cuba, but has decided against it. "We've talked," he says, "but this kind of service could be too controversial. It's not particularly popular in some segments of the social structure.

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