Tags: rush | holt | sprint | softbank | japan | china

Rep. Rush Holt: Sprint Deal 'Troubling'

Friday, 31 May 2013 07:26 PM

By Bill Hoffmann

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The potential takeover of cellphone giant Sprint by a Japanese company with strong ties to China is a disturbing development for the security of the nation's communications systems, Rep. Rush Holt of New Jersey tells Newsmax.

"It's troubling," Holt told "The Steve Malzberg Show" on Newsmax TV.

"All of the messing around in cyberspace is troubling, whether it's by a country that is up to no good or whether it's some malicious individuals or a group."

This week, the U.S. Treasury's Committee on Foreign Investment in the United States concluded an investigation into a takeover of Sprint by Japan's SoftBank and found no "unresolved national security issues."

Critics of the deal are concerned by SoftBank's relationship with China's Huawei, a supplier of equipment with alleged ties to the Chinese military. But SoftBank has now agreed to cut ties with Huawei for those supplies.

Related: Dish Says Sprint Deal Approval Threatens US Security

Still, Holt, a Democrat who holds a doctorate in physics, said, "We become overly dependent on our electronics … There's really no reason why we should see to other countries [for] our most important electronics."

On the same subject, Gordon Chang, a writer on Asian affairs and the author of "The Coming Collapse of China," told Malzberg the proposed purchase "does raise a number of national security issues."

"To its credit, the U.S. is forcing SoftBank and Sprint to remove Chinese equipment... But we really have to be thorough because Huawei chips and servers and equipment are really buried deep into the global intercommunications system," Chang said.

"It's going to be very hard for the U.S. authorities to make sure that all the Chinese equipment has been taken out … The Committee on Foreign Investment in the U.S. looked at [that], but probably came to the wrong decision. There's a lot more work that needs to be done before this deal can go through."

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