The U.S. government said Wednesday it will start a

The U.S. government said Wednesday it will start allowing telecommunications companies to set up equipment and other infrastructure projects needed to begin phone and Internet services in Cuba, a vital commercial component of its dramatic reopening of diplomatic relations with the island country.

"Today, the United States is taking historic steps to chart a new course in our relations with Cuba and to further engage and empower the Cuban people," according to a statement released Wednesday by the White House.

"The cost of telecommunications in Cuba is exorbitantly high, while the services offered are extremely limited," it said.

"Telecommunications providers will be allowed to establish the necessary mechanisms, including infrastructure, in Cuba to provide commercial telecommunications and Internet services, which will improve telecommunications between the United States and Cuba," said the statement, which lists a range of new political and commercial changes the government introduced Wednesday.

In calling for normalization of the U.S.-Cuba relationship that has been strained since 1961, President Obama directed Secretary of State John Kerry to immediately initiate discussions to re-establish diplomatic relations and open an embassy in Havana.

AT&T declined to comment. Verizon didn't respond to requests for comment.

In a statement, T-Mobile said it "will continue to look for ways to improve open communication as U.S. policy evolves."

Only about 5% of Cubans have access to the open Internet, the White House noted.

Citing data from the National Statistics Office in Cuba, advocacy group Freedom House said on its website that about 2.6 million Cubans used the Internet in 2011, or 23.2% of the population, but their access is limited to "a tightly controlled government-filtered Intranet, which consists of a national email system, a Cuban encyclopedia, a pool of educational materials and open-access journals, Cuban websites, and foreign websites that are supportive of the Cuban government."

Hourly connection costs can be as much as 20% of the minimum monthly wage, the Freedom House report said.

"Cuba has long ranked as one of the world's most repressive environments for information and communication technologies," it said. "High prices, exceptionally slow connectivity, and extensive government regulation have resulted in a pronounced lack of access to applications and services other than email."

The American embargo on Cuba remains in place, and it generally prohibits U.S. companies from investing in Cuba. But Obama can exercise his executive authority to exercise some exceptions allowed, including activities that would "promote civil society," says Carlos Saladrigas, co-chairman of Cuba Study Group, who has written about the telecom market in the country. "That is exactly what he is doing," Saladrigas said.

"It's preliminary. And the devil is in the detail, but it appears he has opened the door far and wide," he said. "Presumably, Verizon can go to Cuba and open a cellular network. I say presumably because (the Cuban government) has telephony monopoly, and they may not allow it. He has put the ball on the other court. We're now willing to sit down as partners and negotiate. Will they insist on their failed system?"

"The only way of discovering the limits of the possible is to venture a little way past them into the impossible."