Sprint Nextel and SoftBank Vow to Exclude Huawei Equipment Post-Deal, House Intelligence Chairman Says
Sprint Nextel and SoftBank have told House Intelligence Committee Chairman Mike Rogers, R-Mich., “they would not integrate Huawei in to the Sprint network and would take mitigation efforts to replace Huawei equipment in the Clearwire network,” Rogers said in a statement Thursday. SoftBank is seeking federal government approval for its planned buy of 70 percent ownership of Sprint; the government also needs to approve Sprint’s plan to purchase full control of Clearwire. The SoftBank and Clearwire deals have received additional attention because of both companies’ use of Huawei-manufactured equipment -- Huawei and fellow China-based telecom equipment manufacturer ZTE are helping build SoftBank’s 4G network in Japan, while Clearwire uses Huawei equipment on the edges of its network. Clearwire has previously said it’s reducing its use of Huawei-manufactured equipment.
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Rogers said he expected SoftBank and Sprint to “make the same assurances before any approval of the deal” by the Treasury Department’s Committee on Foreign Investment in the U.S. (CFIUS). “I am pleased with their mitigation plans, but will continue to look for opportunities to improve the government’s existing authorities to thoroughly review all the national security aspects of proposed transactions.” CFIUS must sign off on the SoftBank deal because SoftBank is based in Japan. A Treasury spokeswoman declined to comment, saying that “by law, information filed with CFIUS may not be disclosed by CFIUS to the public.” The Justice Department is also investigating the SoftBank deal. A Justice Department spokesman said he had no comment. The FCC, which must also approve the deal, did not comment.
The House Intelligence Committee “strongly” urged U.S. companies and government not to use equipment manufactured by Huawei or ZTE, noting in a report in October that both companies posed long-term national security risks due to their potential ties with the Chinese government. The committee also recommended CFIUS block Huawei and ZTE’s attempts to merge with or buy U.S. companies (WID Oct 10 p6). A Sprint spokesman declined to comment, while Huawei and SoftBank did not respond to requests for comment.
The Communications Workers of America (CWA) noted SoftBank and Clearwire’s use of Huawei equipment in its petition to the FCC to deny the Sprint deals, saying “Softbank’s purchase of Sprint (and its related majority interest in and control of Clearwire) will lead to significant penetration of Huawei and ZTE into the U.S. market, with the potential to open critical U.S. infrastructure to espionage and cyber-security threats from foreign states.”