From Wikipedia, the reasons for internet not being expanded post 1996
Lack of funding, owing to the poor state of the Cuban economy after the fall of the Soviet Union and the Cuban government's fear that foreign investment would undermine national sovereignty (in other words, foreign investors putting Cuba up for sale).
The U.S. embargo, which delayed construction of an undersea cable, and made computers, routers, and other equipment expensive and difficult to obtain.
According to Boris Moreno Cordoves, Deputy Minister of Informatics and Communications, the Torricelli Act (part of the United States embargo against Cuba) identified the telecommunications sector as a tool for subversion of the 1959 Cuban Revolution, and the necessary technology has been conditioned by counter-revolutionaries. The internet is also seen as essential for Cuba’s economic development.