It was February 2011, and all was sunshine, smiles and celebratory speeches as officials marked the landfall of an undersea fibre-optic cable which, they promised, would end Cuba's internet isolation and boost web capacity 3,000-fold. Even a retired Fidel Castro had hailed the dawn of a new cyber-age on the island.

More than a year after that ceremony on Siboney Beach in eastern Cuba, and 10 months after the system was supposed to have gone online, the government never mentions the cable any more, and internet speeds here remains the slowest in the western hemisphere. People talk quietly about embezzlement torpedoing the project, and of the arrest of more than a half-dozen senior telecom officials.

Perhaps most maddening, nobody has explained what happened to the much-ballyhooed $70m project.

"They did some photo-op ... and then that scandal came out, and then it just disappeared from human consciousness," said Larry Press, a professor of information systems at California State University, Dominguez Hills, who studies Cuba, referring to foreign media reports and whispers by diplomats that several executives at state phone company Etecsa and the two senior officials in the Telecommunications Ministry were arrested last year.

The cable was strung the 1,000 miles (1,600 km) from Venezuela with the help of that country's president, Hugo Chavez, a key ally for Cuba. Government officials said from the start that the bandwidth boon would be prioritised for hospitals, universities and other usage deemed in service of the common good; the legions of Cubans with little or no access to the internet from their homes would have to wait.

But a dozen employees of public institutions interviewed by Associated Press said they have seen no noticeable improvement in their work connections. If anything, they say, download speeds have even gotten a little slower.

And that on an island where going online will try the patience of anyone who's ever had a taste of high-speed always-on connections.

The cable certainly works: weeks after arriving in Cuba, it was extended to Jamaica, making landfall at Ochos Rios, and has since been extended to Haiti.

But in Cuba, connection speeds here are still stuck at Web 1.0, while the world has moved on to fancier, bandwidth-hogging platforms such as Flash. Watching YouTube is an impossible dream on Cuban dialup, and barely usable on the rare broadband connections. Want to watch the latest episode of "Mad Men?" At the dialup transfer speeds of 3-5kbps, a 500Mb video file would theoretically take somewhere between 28 and 46 hours to download from iTunes.

Artists and photographers say it's nearly impossible to view others' work online. People swap digital pictures in person on memory sticks rather than simply sending them as email attachments. Students have difficulty accessing research databases.

One doctor in Havana said she only has access to Cuba's domestic intranet, a bare-bones internal network of island-hosted sites that also lets users get email. Moreover, her institution recently began cracking down on the few who do have full internet access, ordering them not to use sites such as Facebook under threat of punishment.

"I had high hopes, great expectations for the cable. ... For me, doing a postgraduate degree, (the intranet) is no good. It's too basic and poor for our needs," she said. "They haven't given us any explanation."

She and the others spoke on condition of anonymity for fear of getting into trouble with their state employers.

Multiple attempts to get Cuban and Venezuelan government officials to comment were unsuccessful.

The Venezuela branch of Paris-based Alcatel-Lucent, which was contracted to lay the cable, referred questions to the Cuban-Venezuelan joint venture Telecomunicaciones Gran Caribe, where an official said he would need approval from Venezuela's science and technology ministry to talk about the project. The ministry did not respond to requests to interview officials.

Diplomats in Havana privately tell consistent stories of reported corner-cutting on the project that let corrupt officials skim millions of dollars from its budget.

A senior French official told AP that Alcatel had upheld its part of the contract and whatever problems exist must be on land with the network it was meant to be attached to.

"The cable must be connected to something or it won't work," said the official, who also spoke on condition of anonymity because he was not authorised to discuss the politically sensitive project.

The lack of transparency is not unusual for Cuba, where all media is state-run and tightly controlled. But it flies in the face of Fidel Castro's own enthusiastic words about the cable and the transformational power of the internet.

"Secrets are over. ... We are facing the most powerful weapon that has ever existed, which is communication," Castro told Mexican daily La Jornada in an August 2010 interview in which he hailed the coming cable.

While some hold out hope that faster internet has merely been delayed, others interpret the government's long silence as a sign Cuba's broadband dreams will be the latest grand pronouncement to end in disappointment.

"I have no expectations for the cable," said Marlene Blanco, a 25-year-old independent worker. "Nothing is going to change for ordinary Cubans. So why talk about it?"

According to government statistics, 16% of islanders were online in some capacity in 2011, mostly through work or school, and often just to the intranet. The National Statistics Office said last year that just 2.9% reported having direct internet access, though outside experts estimate the real figure is likely 5% to 10%, accounting for black market sales of dialup minutes. For a variety of reasons, including the 50-year-old US economic embargo, Cuba is the last country in the western hemisphere to get a fibre-optic connection to the outside world, and has relied instead on costly and slow satellite linkups.

Some speculate that the internet-fuelled Arab Spring revolts, which began months before the cable's arrival in Cuba, could have altered the government's plan – or at least made officials rethink the wisdom of making it widely available.

"They're afraid of it. They don't want a 'Cuban Spring', so to speak," Press said.

President Raul Castro's administration has warned of a supposed plot by enemies in the US to wage a "cyberwar" to destabilise the communist-run government. In 2011, a Cuban court sentenced US subcontractor Alan Gross to 15 years after convicting him of crimes against the state for importing restricted communications equipment. He insists it was only meant to help the island's Jewish community gain better internet access.

The official silence over the fibre-optic cable that came aground last year has given rise to other rumours: that the cable is operational but being used selectively. A pro-government blogger known as Yohandry Fontana wrote at the end of 2011 that people who attended a closed forum on social networks reported it was working fine.

"Here's a brief summary: 1. The cable has no problem, it is working. 2. Public internet spaces will open on the island. 3. Costs for public connection will go down. Note: I am seeking more information," Fontana said.

Cuban-born economist Arturo Lopez-Levy said Havana has badly bungled the whole affair, and if it's true that corruption killed the cable, officials should "make heads roll over the scandal" and give an open accounting of what went wrong.

"The Cuban government failure to achieve this goal is one of the worst-managed situations," said Lopez-Levy, a lecturer at the University of Denver, "aggravated by an even worse public relations fiasco to address it."