Dish Network has issued a response to the Committee for Foreign Investment in the United States' (CFIUS) conditional approval of SoftBank Corp.'s acquisition of Sprint Nextel Corp., saying the agreement "fails to adequately address the significant national security risk involved in the sale."
As Newsmax reported earlier, the Japanese conglomerate SoftBank Corp. announced in October that it was seeking approval from the United States for a $20 billion purchase of a 70 percent stake in Sprint, America's third-largest cellphone provider.
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SoftBank's offer raised concerns due to the company's links to the Chinese telecom firm Huawei.
In April, Dish Network, an Englewood, Colo.-based satellite television company, challenged SoftBank's bid for Sprint, offering $25.5 billion for the entire company.
In October 2012, the House Intelligence Committee, after an 11-month investigation, concluded that U.S. firms should not do business with Huawei because of its extensive ties to the Chinese government.
The committee also found that it posed a major cyber-security threat to U.S. intellectual property.
Dish stated: "We believe the U.S. government should proceed with deliberation and caution in allowing assets of national strategic importance — such as the Sprint fiber backbone and wireless networks — to be owned and operated by a foreign company with significant ties to China.
"Oversight and accountability for these assets are critical at a time when offshore cyberattacks, including the hacking of weapons systems designs, continue to rise. Congress should take a close look at the CFIUS review process in this instance."
DISH provided responses to the specific conditions of the National Security Agreement as reported by SoftBank, one of which disclosed: "SoftBank and Sprint must appoint an independent member to the New Sprint board of directors to serve as the Security Director.
The Security Director will be approved by the [U.S. Government] USG Parties, oversee Sprint's compliance with the National Security Agreement and serve as a contact for the USG Parties on all security-related matters. In addition, the Security Director is required to have expertise and experience with national security matters, be a U.S. resident citizen, and hold appropriate security clearances."
Dish responded: "While the requirement to have an appropriately credentialed security director approved by the U.S. government is very common to CFIUS agreements, it does little to address the practical risks of national security breaches, including cyberattacks, because hacking on the ground is not often detected in the boardroom."
Another condition of the agreement: "The USG Parties will have the right to review and approve certain network equipment vendors and managed services providers of Sprint, as well as of Clearwire once Sprint completes its proposed acquisition of Clearwire."
Dish's response: "The U.S. government itself has been the victim of numerous cyberattacks. As a result, its 'review and approval' of equipment vendors and service providers cannot insure against national security breaches. Just this week, there have been reports that many critical U.S. defense systems have been hacked by Chinese attackers."
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Dish pointed out that Sprint has numerous contracts with the U.S. government — including the Department of Defense — transmitting confidential and possibly classified information, and added that "foreign ownership of the network and facilities transmitting this data creates serious national security concerns for the federal government."
Dish concluded: "At a time when the president plans to press the issue of weapons hacking with the Chinese leadership, it seems ill-advised to hand over a key piece of our national infrastructure – the piece that enables hacking – to a foreign company with numerous ties to China."
A number of prominent Americans have voiced deep concerns about SoftBank obtaining control of Sprint.
"The pending SoftBank takeover of Sprint could make America dependent on foreign controlled, owned, and critical infrastructure, an unacceptable outcome to maintaining our national security," said Bradley A. Blakeman, former Deputy Assistant to President George W. Bush.
Former Arkansas Gov. Mike Huckabee told Newsmax: "We cannot afford to allow something as significant as our communications networks to be in the hands of a country that has proven not to be trustworthy when it comes to information and of that information being handled responsibly and honorably."
Republican Sen. Orrin Hatch of Utah told Newsmax he is also "concerned" about the SoftBank bid.
And Rep. Peter King, R-N.Y., told Newsmax the administration should exercise "extreme caution" in evaluating the sale of Sprint in light of the cyber-warfare threat.
"This is a new form of warfare," he said. "We have to accept that it's there and then go after it.
"We cannot allow corporate profits to come first. We have to make sure our national security, our homeland security is there and we have to do all we can to make sure that we are protecting our people against this type of cyber invasion."
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