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U.S. Phone Companies Hopeful About Providing Service to Cuba

September 8, 1994

WASHINGTON (AP) _ The Cuban government is showing a new willingness to work out kinks in pending agreements for direct phone service with the United States, telecommunications representatives say.

An official of MCI Communications Corp., which is among a handful of U.S. companies seeking to provide direct service, said Wednesday the Cuban government offered to reduce a surcharge it would receive from collect calls.

″I think this heats things up,″ Jane Levene, senior manager of international affairs, said in an interview. Cuba’s revised surcharge would be $1 rather than the $4.85 charge in the original agreement earlier this year.

The $4.85 surcharge has been a sticking point for the U.S. government. Other U.S. companies, including WilTel International Inc., LDDS Communications and Sprint Corp., have agreements with Cuba that include a $4.85 surcharge.

State Department officials have said they would reject these proposals because they would pay Cuba too much.

If Cuba accepts the lower surcharge, MCI will amend its application to the State Department. ″State Department approval ought to be quick,″ Levene said.

By law, AT&T Corp. is the only authorized provider of telephone service to all of Cuba, but it must route calls through Italy.

AT&T has been seeking to expand its service to Cuba since the summer. It has been negotiating with the Cuban government to activate an undersea cable so that it may provide direct service to Cuba. Recent negotiations have ″produced good results,″ said AT&T spokesman Herb Linnen.

Sprint spokeswoman Janis Langley said the company was hopeful its agreement would be approved. She declined further comment.

Legislation enacted in 1992 calls for improved telephone service between the United States and Cuba to replace the antiquated system under which AT&T routes calls.

The U.S. embargo against communist Cuba had prevented any upgrading of the system and efforts to communicate across the Florida Straits often are nightmarish.

Another result of the embargo is that for more than 30 years, Cuba has been denied access to its share of long-distance fees - $85 million. Those funds have been frozen in a U.S. bank account.

The 1992 legislation cautions that telecommunications agreements are not intended for the Cuban government to accumulate excessive amounts of U.S. currency or profits.

Consistent with the legislation, the pending agreements signed with Cuba permit the U.S. companies to charge callers a maximum of $1.20 per minute, with Havana pocketing half the proceeds.

Meanwhile, AT&T said Wednesday it will expand phone service at the U.S. Navy base at Guantanamo Bay, Cuba, so that 30,000 Cuban and Haitian refugees can make collect calls to the United States.

Up to 500 additional phone lines will be installed at the base, with initial service to begin in less than two weeks, the company said.

Under the plan, a 10-minute phone conversation would cost $15.45 plus tax, said Linnen, the spokesman. Each call is based on a rate that includes a $2.75 collect-call surcharge. The cost for the first minute is $1.99, with $1.19 charged for each minute after that, Linnen said.

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