Major disruptions expected today for calls from U.S.

BY YVES COLON

 Major disruption in phone service between Cuba and Miami may occur today if the
 Castro government carries out a threat to cut off communication between the
 island and the United States.

 At midnight, the Cuban government said it will pull the plug on nearly 300 circuits
 linking the two countries, which will force phone companies to send calls from the
 United States to third countries before they're routed back to Cuba.

 ``They've given no indication that they will not proceed,'' said John S. Kavulich II,
 president of U.S.-Cuba Trade and Economic Council in New York. ``It should be a
 surprise if they don't.''

 The dispute is over a 10 percent surcharge Cuba wants to collect on phone calls
 to make up the $58 million awarded in damages to the Miami relatives of the
 Brothers to the Rescue pilots ambushed by Cuban MiGs in 1996.

 A Miami judge allowed the government to take the money from frozen Cuban
 funds in U.S. banks that would have gone to repay companies with claims against
 Cuba. In October, the Cuban government approved the 10 percent tax on phone
 calls to make up the difference.

 The phone companies that provide service, including AT&T, Sprint and Telefónica
 of Puerto Rico, say they cannot pay the surcharge without violating the laws that
 regulate economic transactions between the two countries.

 Cuba already earns about $80 million a year from those calls. The surcharge
 would provide Cuba with an additional $30 million in revenue.

 Routing those calls through third countries will present its own set of problems,
 too. Cuba said it plans to compare usage between this year and last year, and if
 there's substantial change, bill third-country phone companies the surcharge.
 They will likely pass the tax on to the U.S. companies.

 The Office of Foreign Assets Control, a branch of the U.S. Treasury that
 administers and enforces economic and trade sanctions against targeted foreign
 countries like Cuba, will rule on whether they can pay. The answer is likely to be
 no.

 ``I don't think we're going to be allowed to pay the tax indirectly,'' said Gustavo
 Alfonso of AT&T, the largest provider of phone service to Cuba.

 Barring any breakthroughs, Alfonso predicts that several small companies with an
 800 line will pop up in Canada and elsewhere to fill the holiday demand, as they
 did in February 1999 after Cuba cut off service for a year over a different issue.
 Internet service is not expected to be affected.

 ``It's unfortunate that it's at this time of the year,'' Alfonso said. ``The ones who
 are getting caught up in the middle are the average common folk who are paying
 the price. That's what's sad about it.''

 One beneficiary of the cutoff, Kavulich said, will be DHL because families will use
 the company to send letters and packages to relatives.

 DHL is the only major package service company the United States allows to ship
 goods to Cuba.