DOJ asks FCC to defer Softbank-Sprint deal, cites 'national security'

The U.S. Justice Department asks the Federal Communications Commission to put off Japan-based Softbank's purchase of a chunk of Sprint, saying it and other agencies need time to review the deal's implications.

The U.S. Department of Justice has asked the Federal Communications Commission to defer a proposed deal in which Japan-based Softbank would acquire a 70 percent stake in Sprint.

In a letter sent to the FCC and dated yesterday, attorney advisor Jennifer Rockoff, with the Justice Department's National Security Division, asked that the deal be put on ice for now.

The DOJ, the Department of Homeland Security, and the FBI "are currently reviewing this matter for any national security, law enforcement, and public safety issues but have not yet completed that effort," she wrote. "We therefore request that the Commission defer action until such time as the Agencies notify the Commission of the completion of their review and, based on the results of such review, request appropriate action by the Commission."

Both companies hope the deal will be cleared by mid-2013. In a statement to CNET, a Sprint representative said, "This a routine request, so the appropriate federal agencies can review network security issues for transactions involving foreign companies. We continue to anticipate that the transaction will be completed in mid-2013."

In October, Sprint agreed to sell the stake to  Softbank for $20.1 billion . With that cash injection, Sprint then made a bid to acquire the rest of the Clearwire shares  it didn't already own, for $2.97 per share.

Dish Network ended up offering a far higher,  unsolicited bid for Clearwire for $3.30 per share . Clearwire said in a statement that while it would consider Dish's bid, it was "severely limited by its current contractual arrangements" because of Sprint's majority stake in the firm but also its bid to buy the rest of the company.

But earlier today Dish Network reneged on its plans to ask the FCC to hold off on its review of the deal, reports Reuters, citing "the uncertainty surrounding the ownership of Clearwire," among other things. The satellite television provider said in a letter to the FCC, dated yesterday, that it will not play any part in the regulator's review of the Softbank-Sprint deal. 

News of the DOJ's request for a delay was reported earlier by Bloomberg.

Update, 10:50 a.m. PT: Adds statement from Sprint.

 

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