Newspaper article The Florida Times Union

Lawmakers Concerned after Deutsche Telekom Eyes Sprint

Newspaper article The Florida Times Union

Lawmakers Concerned after Deutsche Telekom Eyes Sprint

Article excerpt

WASHINGTON -- Thirty senators are voicing opposition to foreign government-owned companies taking over U.S. telecommunications businesses, amid reports that German carrier Deutsche Telekom is looking at snapping up long-distance giant Sprint Corp.

In a letter to the head of the Federal Communications Commission, Sen. Fritz Hollings, D-S.C., and 29 other lawmakers said acquisitions by government-owned foreign firms raise serious national security concerns and "would be putting domestic competitors at the mercy of a foreign government. No country should allow this."

They urged FCC Chairman William Kennard to heavily scrutinize any such deals brought before his agency.

That could complicate efforts by German communications business Deutsche Telekom, which is reportedly eyeing No. 3 U.S. long-distance company Sprint as a possible acquisition. The German company -- a former state telephone monopoly -- is majority owned by the government.

Deutsche Telekom has emerged as a leading candidate to acquire Sprint after regulators on two continents scuttled the U.S. company's planned merger with WorldCom Inc. Analysts have speculated that Deutsche Telekom might now make a move for Sprint, a company of which it already owns 10 percent.

Investors also speculated a deal might be in the offing, pushing shares of Sprint up $1.94 to $54.44 in trading on the New York Stock Exchange.

Communications law prohibits the FCC from approving acquisitions by telecommunications companies that are more than 25 percent foreign government owned. However, the commission can waive this limit if it determines that the deal is in the public interest, and a recent telecommunications agreement suggested that the limit could be overridden if the foreign government was a member of the World Trade Organization.

Hollings introduced legislation last week that would essentially take away the FCC's latitude in this area. The measure would forbid any foreign company owned more than 25 percent by its government from taking over a U. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.