AT&T, Verizon express divergent opinions on U.S.-Cuba route policies

AT&T (NYSE: T) and Verizon (NYSE: VZ) are eager to take advantage of the service opportunity in Cuba as the United States has started to lift decades-long restrictions with the island country, but the two telcos take a different view on U.S.-Cuba route policies.

At issue is a proposal by the State Department to remove all nondiscrimination requirements that apply to the provision of facilities-based services on the U.S.-Cuba route.

After President Obama announced changes in U.S. policy on Cuba in December 2014, a growing number of U.S. international carriers have entered into operating agreements to provide direct service via the U.S.-Cuba route.

AT&T says in a FCC filing that by removing the nondiscrimination requirements, the regulator will drive more U.S. carriers to negotiate more "flexible and cost-based arrangements" with Cuba's incumbent telco ETECSA.

"Now that multiple U.S. carriers are able to provide direct service to Cuba, and the former State Department and other restrictions addressed above are being relaxed, the Commission should adopt the regulatory policies that are necessary to promote competition and lower rates on this route," AT&T said in a FCC filing. "Such policies would benefit users in both the United States and Cuba and stimulate the increased communication that is the goal of U.S. policy toward Cuba."

Verizon, while establishing its own agreements with Cuba incumbent telco Etecsa to provide services on the island, said that the agreements are still relatively new and the commission should be cautious about altering the current rules.

"Verizon and a few other U.S. carriers have recently established commercial agreements for direct traffic exchange between the U.S. and Cuba, opening up long-dormant possibilities," Verizon said in an FCC filing. "However, these commercial relationships and the commercial environment for telecommunications in Cuba are still developing."

The telco said that the FCC "should therefore wait for these commercial relations to become more firmly established before it removes all nondiscrimination requirements on this route."

Verizon said that Etecsa has not negotiated rates that comply with the FCC's 19 cents per minute benchmark. Today, Etecsa charges U.S. providers 60 cents per minute.

In addition to higher connection rates, Verizon said "Cuba has limited ingress points for communications that may create barriers to additional competitive forces."

For more:
- see AT&T's FCC filing (PDF)
- here's Verizon's FCC filing (PDF)

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