T-Mobile may violate foreign ownership rule-FCC

WASHINGTON, Oct 31 (Reuters) - T-Mobile, which is owned by Deutsche Telekom AG (DTEGn.DE), may be in violation of a federal rule barring more than 20 percent foreign ownership, according to a letter sent to the company by a U.S. regulator.

"T-Mobile USA's level of foreign ownership through the existing ownership structure appears to be in violation" of federal law, the Federal Communications Commission wrote in a letter dated Oct. 17 to T-Mobile obtained by Reuters.

T-Mobile disputed the assertion, and said it was in talks with regulators to find a regulatory fix.

"We're perplexed by this," said Kathleen Ham, vice president of federal regulatory affairs for T-Mobile, which was acquired by Deutsche Telekom in 2001.

FCC officials said T-Mobile had agreed to create a subsidiary for a rural venture called Wireless Alliance to be in compliance with federal rules.

Wireless Alliance is owned jointly by T-Mobile and Verizon Wireless, itself a joint venture between Verizon Communications Inc (VZ.N) and Britain's Vodafone Group Plc (VOD.L).

The FCC officials said T-Mobile never properly created that subsidiary structure, putting the company in violation.

The issue came up in the context of the FCC's review of a pending merger between Verizon Wireless and Alltel Corp. (Reporting by Kim Dixon; Editing by Brian Moss)