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In a big step forward for a deal that had prompted national security concerns among key U.S. lawmakers, federal regulators approved Tyco International Ltd.’s $130 million sale of undersea fiber optic cable assets to India’s Videsh Sanchar Nigam Ltd. The Committee on Foreign Investment in the U.S. approved the deal after the Indian company signed a security agreement with U.S. authorities, VSNL said Tuesday. Approval of the sale by CIFUS, a multi-agency panel that reviews acquisitions of U.S. businesses by foreign companies, pre-empted calls by three U.S. senators for a full CFIUS investigation of the deal. Last week, Senate Commerce Committee Chairman Ted Stevens, R-Alaska, along with Sens. Jon Kyl, R-Ariz., and Jeff Sessions, R-Ala., called on CFIUS to conduct a full, 45-day examination, in addition to a routine, 30-day probe already under way. The senators were concerned that the deal would give the Indian government effective control over a communications grid that the U.S. military relies on heavily. The Indian government owns 26 percent of VSNL and is active in its management. Alan Mauldin, an analyst of submarine cable systems for TeleGeography Research, a Washington-based firm, said the Tyco network represents roughly 40 percent of all undersea Pacific capacity and could be upgraded to account for 85 percent. CFIUS notified VSNL on Monday that it had completed its 30-day review and “uncovered no significant issues of national security,” a VSNL spokesman said. He said CFIUS approved the deal after VSNL signed a network-security agreement with the U.S. Department of Justice, the FBI, the U.S. Department of Homeland Security and the Department of Defense stipulating how VSNL’s U.S. subsidiary will handle sensitive information that moves over its cable network. Among those who sought to block the deal by Princeton, N.J.-based Tyco was Crest Communications Corp., which has been negotiating with the Pentagon to carry U.S. military data from Alaska over a network that would connect with Tyco’s. Fearing national security concerns would kill the deal, Crest had asked the Federal Communications Commission to reject the sale. The FCC, a member of CFIUS, could still vote to oppose the deal, though that appears very unlikely following CFIUS’ decision. CFIUS is the same panel that cleared IBM Corp.’s $1.75 billion sale of its personal-computer division to China’s Lenovo Group Ltd. in early March. Copyright �2005 TDD, LLC. All rights reserved.

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