The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The US government has taken its foot off Cable Bahamas’ $89 million worth of US transactions, its national security and law enforcement agencies saying they have “no objection” to the Summit Broadband and US Metropolitan Telecom deals.

Tyrone Brown, a member of the foreign investment review staff at the U.S Department of Justice, in March 4, 2013, letter to the Federal Communications Commission (FCC), said both itself, the FBI and Department of Homeland Security had withdrawn their request to defer approving the Cable Bahamas purchases.

“Based on the information provided to the agencies by the applicant [Cable Bahamas], and analysis by the agencies of potential national security, law enforcement, and public safety issues, the agencies hereby notify the Commission that they have no objection to the application,” Mr Brown wrote.

That is one hurdle overcome in Cable Bahamas’ quest to consummate its Florida expansion, the remaining obstacle being Bahamian government approval.

The transactions have exposed the difficulties faced by Bahamian companies in obtaining timely approvals, especially in multi-jurisdictional deals.

When it announced the deals - Summit Broadband and Marco Island Cable/NuVu in October, US Metropolitan Telecom in November - Cable Bahamas had been confident of getting all the necessary approvals, both Bahamian and US, by year-end 2012.

That, of course, has not happened, pushing back related initiatives, such as Cable Bahamas’ planned $40 million preference share issue to part-finance the deals, into 2013.

On the Bahamian side, the company needs exchange control approval from the Central Bank of the Bahamas to facilitate the foreign currency outflows necessary to consummate its purchases.

Ultimately, though, the decision rests with Perry Christie’s Cabinet and the Investments Board, the latter often functioning as a Cabinet committee or sub-committee.

Cable Bahamas was last month granted an extension by the FCC of its ‘fast track’ authority to close the Summit Broadband deal until April 8, 2013.

The ‘fast track’ extension was required due to the continued wait for Bahamian government approval and because US regulators had yet to ratify another of Cable Bahamas’ three US purchases.

In a January 22, 2013, filing it was disclosed, that Cable Bahamas was expecting to receive Bahamian government approval for its $89 million worth of US acquisitions within the next 30 days. That, though, appears not to have happened.

The other US purchase Cable Bahamas is seeking FCC approval for is the $24 million purchase of US Metropolitan Telecom, a communications infrastructure provider that owns a fibre-optic ring connecting northern and central Florida

The FCC filing revealed that the strategy had been for Cable Bahamas and its US affiliate, Summit Vista, to close the acquisitions of both Summit Broadband and US Metropolitan Telecom simultaneously.

That, though, was prevented by the US government’s requirement that all foreign purchasers of communications infrastructure providers, such as US Metropolitan Telecom, undergo rigorous due diligence to ensure they are not a ‘national security’ risk.