Senator Schumer urges caution in Sprint deal

Senator Charles Schumer urged regulators to “use extreme caution” when reviewing the proposed acquisition of No. 3 cell carrier Sprint Nextel by Japan’s Softbank, saying the Japanese company’s use of Chinese networking equipment could open up U.S. networks to snooping and hacking.

The New York Democrat sent letters Friday to the Treasury Department and Federal Communications Commission, both of which are reviewing Softbank Corp.’s offer to buy 70 percent of Sprint Nextel Corp. for $20.1 billion.

Satellite TV broadcaster Dish has a competing $25.5 billion offer for all of Sprint, and has raised the security issue as one reason Sprint shareholders should prefer its bid. Softbank has offered to remove the Chinese-made equipment that’s already in Sprint’s network.

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Sen. Schumer urges the govt. to have a look at security in Sprint deal (image credit: usatoday)

China’s Huawei has in recent years become one of the world’s largest makers of telecommunications equipment. Its products are widely deployed except in the U.S., where security concerns have kept it out of the running for most contracts.

Huawei wasn’t mentioned by Schumer or Softbank by name. A Huawei spokesman didn’t immediately respond to a request for comment.

The Pentagon said this month that China appeared to be engaged in cyberspying against the U.S. government, the first time it has made such an assertion in its annual report on Chinese military power. Chinese authorities dismiss the allegations. There have been no reports of Chinese-made networking equipment helping the hackers.

Softbank hopes to close the Sprint deal on July 1, but needs approval from the FCC and the Treasury Department’s Committee on Foreign Investment in the United States.

AP