Google and China in battle over Cuba's Internet future

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.

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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.

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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.

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."