Federal law enforcement looking at SoftBank/Sprint merger

In what all parties are calling a routine matter, federal law enforcement agencies are investigating the proposed SoftBank merger with Sprint as a matter of national security.

The DOJ, FBI and Homeland Security have asked the FCC to hold off on approval of the merger because law enforcement is "currently reviewing this matter for any national security, law enforcement, and public safety issues, but have not yet completed that effort."

AT&T has commented on it, though, saying that making SoftBank the largest owner of Sprint/Clearwire would give "Japan's largest wireless companies control of significantly more U.S. wireless spectrum than any other company." SoftBank has been perceived as a threat because of its relationship with China - SoftBank is using China's Huawei Technologies Co. and ZTE Corp. for components in its build-out of wireless in Japan.

As Speed Matters has reported, one link of the proposed $20 billion Sprint/SoftBank deal - Sprint's acquisition of Clearwire - is being challenged by a number of investors. Moreover, Verizon has now raised a challenge regarding Sprint/SoftBank with the FCC over the commission's "spectrum screen. " As one business journal explained, "The spectrum screen is a pro-competition measure to keep spectrum access in check," but the current FCC protocol would omit some of the 2.5 GHz spectrum that Sprint would acquire from Clearwire. Verizon wants the FCC to take the increased spectrum into account when reviewing the deal.

In any case, Speed Matters believes that the FCC should rigorously investigate and evaluate the proposed deal, with an eye not only to national security, but to build-out and jobs.

Deferral letter request (FCC, Jan. 29, 2013)

AT&T: Sprint-SoftBank deal gives Japanese firm 'control of significantly more US wireless spectrum than any other company' (The Verge, Oct. 18, 2012)

Yet another Clearwire investor protests Sprint deal to FCC (Speed Matters, Jan. 28, 2013)

Verizon chimes in on Sprint deals, asks FCC to look closely (KC Business Journal, Jan. 30, 2013)