Dish makes national security argument for Sprint offer

WASHINGTON Thu Apr 18, 2013 2:43pm EDT

The Dish Network logo on the side of installers truck is seen in Denver March 2, 2009. REUTERS/Rick Wilking

The Dish Network logo on the side of installers truck is seen in Denver March 2, 2009.

Credit: Reuters/Rick Wilking

WASHINGTON (Reuters) - Dish Network Corp is asking regulators to suspend the review of the proposed acquisition of Sprint Nextel Corp to Japan's SoftBank Corp, saying its own counter-bid would be preferable for national security reasons.

Dish in the past has asked the Federal Communications Commission for such a suspension, but in a filing posted online on Thursday, the satellite TV provider reinforced the request with arguments promoting its own, unsolicited $25.5 billion bid made for Sprint on Monday.

Sprint spokesman John Taylor declined comment. Sprint's board, which previously agreed to the SoftBank offer, is now studying the Dish offer.

In the filing, Dish touted the premium its bid would offer Sprint shareholders and also pointed to SoftBank's foreign origin, saying that the Japanese company lacked the "existing in-market infrastructure," among other things.

"DISH's merger proposal is better for American consumers, better for Sprint shareholders, and better for national security than the SoftBank proposal," the filing says.

Dish asked the FCC to withhold its ruling on the merger until Sprint's board responds to its own offer.

The FCC declined to comment on the matter.

Federal regulators put extra scrutiny on merger deals involving foreign-owned entities to ensure independence and protection of the U.S. networks, though these matters tend to be led by the Committee on Foreign Investment in the U.S. (CFIUS) rather than the FCC.

Charlie Ergen, chairman of the No. 2 U.S. satellite TV company Dish, is challenging SoftBank's $20.1 billion offer to buy 70 percent of the No. 3 U.S. mobile provider Sprint, prompting support from major shareholders including hedge funds Paulson & Co and Omega Advisors.

VERIZON ENDORSEMENT

Verizon Communications Chief Financial Officer Fran Shammo said in an interview on Thursday that the battle between Dish and SoftBank would ultimately help the U.S. wireless industry.

Sprint's biggest rival is Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc.

"Anything that builds the industry from an investment standpoint is good," Shammo said after his own company's earnings report. Shammo added that both contenders for Sprint are "equally as good."

"There are carriers that need additional investment and this is a great way to get there," Shammo said.

"They're confirming what we've been saying, which is that there's a lot of growth left in the wireless business," Shammo added. "You've a foreign investor and a domestic investor who now agree on that."

Shammo declined to say whether Dish or SoftBank would be a more formidable opponent to Verizon Wireless and No. 2 U.S. mobile service provider AT&T Inc.

Shares of Sprint rose 5 cents to $7.15 on Thursday. They had jumped sharply on the news of Dish's bid, which was the boldest step yet by Ergen, who has spent billions of dollars on wireless spectrum in the last few years. Dish shares were also up 2 cents at $37.85.

(Reporting by Alina Selyukh in Washington and Sinead Carew in New York; Editing by Lisa Von Ahn and Vicki Allen)

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Comments (2)
Vilavicki wrote:
I would rather an American company like Dish be the one to buy Sprint. It will be better for American workers hopefully.

Apr 18, 2013 8:02pm EDT  --  Report as abuse
Whittier5 wrote:
No more vertical or horizontal or diagonal monopolies!
Dish could be just as much of a “national security” problem since is now a “person”, but subject to the whims of the then-current shareholder.

Apr 22, 2013 9:11am EDT  --  Report as abuse
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