The Marshall Islands National Telecommunications Authority says the installation of a fibre-optic cable from Guam to Majuro via Kwajalein, is being held up.
Alan Fowler, the NTA's general manager, says the U.S. military has yet to make a decision on how it will be funding its portion of the project.
The cable, which will cost more than 65 million U.S. dollars, is a three party venture between the NTA, the U.S. military and Federated States of Micronesia Telecom.
Mr Fowler says they've been unable to proceed with the loans because of the indecision.
"I'm not putting all the blame on the military but we have been in a holding pattern - we have to go to a lender ourselves and get a loan financed if we're going to do this. And, at the present time, we can't go forward with the loan process because we do not know how much money we're going to have to borrow if the military were to come back and say well, we want you to borrow the money for us also."
Mr Fowler says the U.S. military also has the option of approaching a U.S. company for funds as it doesn't want to own its portion of the cable but lease it.
He says he hopes discussions can be finalised by July.