Original URL: http://www.theregister.co.uk/2013/05/30/sprint_softbank_national_security_clearance/

Japanese SoftBank's $20bn Sprint gobble clears US security hurdle

Rival Dish warns of biz's 'significant ties to China'

By Brid-Aine Parnell

Posted in Networks, 30th May 2013 11:38 GMT

American authorities have apparently said Uncle Sam's national security will not be jeopardised by Japanese giant SoftBank's proposed takeover of US telco Sprint - clearing the way for the $20bn acquisition.

The companies said they have now received clearance from the Committee on Foreign Investment in the US (CFIUS), which said there were "no unresolved national security issues" in the acquisition offer. The firms still need the go-ahead from the Federal Communications Commission, which is conducting a public interest review of the takeover. CFIUS is a top committee of the US government.

The first clearance is a blow for rival bidder Dish Network, which had played the all-American card in an attempt to persuade Sprint's board and investors to accept its $25bn unsolicited acquisition offer.

Dish said Congress should review the CFIUS approval, claiming it didn't take into account enough national security concerns.

“We believe the US government should proceed with deliberation and caution in allowing assets of national strategic importance - such as the Sprint fibre backbone and wireless networks - to be owned and operated by a foreign company with significant ties to China," Stanton Dodge, executive vice-president and general counsel for Dish, said.

"Oversight and accountability for these assets are critical at a time when offshore cyber attacks, including the hacking of weapons systems designs, continue to rise. Congress should take a close look at the CFIUS review process in this instance."

SoftBank and Sprint have already agreed to appoint an independent security director to its board, who will be a US-resident citizen with appropriate security clearances, but Dish reckons that doesn't go far enough to protect Sprint's American network infrastructure from foreign infiltrators: "Hacking on the ground is not often detected in the boardroom."

Meanwhile, Dish has upped its bid to acquire Clearwire, the wireless service provider that Sprint is also trying to buy. The firm is now offering $6.5bn for Clearwire, topping Sprint's bid by nearly 30 per cent.

Dish has raised its game just two days before the Sprint-Clearwire deal goes to a shareholder vote. Sprint already owns over 50 per cent of Clearwire and recently raised its bid for the firm after activist investors expressed dissatisfaction with the offer. ®