May 23 SoftBank Corp would appoint a "security
director" to Sprint Nextel Corp's board if its takeover bid
succeeds and give the U.S. government right of approval on the
appointment in hopes of easing national security concerns raised
by the proposed deal.
Sprint said in a filing with the U.S. Securities and
Exchange Commission on May 1 that the new director appointed by
Tokyo-based SoftBank would oversee public safety
concerns related to Sprint's wireless and wireline operations.
Chinese telecommunications equipment suppliers like Huawei
Technologies Co Ltd, the world's second-largest maker
of routers and other gear, and ZTE Corp, the fifth
largest, have been blocked from making big pushes into the
United States due to the national security concerns.
Dish Network Corp, SoftBank's rival for Sprint, is
running a campaign against the Japanese firm, seeking to
convince lawmakers and government reviewers that the deal poses
national security risks.
SoftBank said it is committed to using only network
equipment that is acceptable to the U.S. government and would
not use equipment from Huawei on Sprint's network. Dish has not
made such promises.
The proposal for a security director was first reported by
the Wall Street Journal, which said the move could cost the
company up to $1 billion. ()
The newspaper also reported that it was unusual for
officials to exert such broad influence over how a company is
run, citing people who follow such deals.
Sprint declined to comment. SoftBank could not be
immediately reached for comment.
Dish, in line with its public relations campaign, said in a
statement that "these reported steps do not adequately protect
our national security interests." Dish added that it has
concerns about the security of Sprint's "critical fiber backbone
network," as well as Sprint's contracts with government
agencies, law enforcement and defense customers.