Dish Network claims Softbank a Potential National Security Threat

by Matt Klassen on June 4, 2013

In late 2012 the US House Intelligence Committee went public with its warning that Chinese companies ZTE and Huawei were potential threats to American security, warning that both companies could be, in fact, Chinese government fronts for market espionage, including spying on American companies, individuals, and infrastructure. At the time the warning was, avoid these companies at all costs, and many American and Canadian businesses listened.

While certainly not privy to the classified intelligence reports that spawned such a warning—and sparked the subsequent outcry from both Chinese companies and the communist regime itself—the entire saga smacked of a witch hunt, an overreaction to China’s growing presence in American markets.

But just how silly have things become in this escapade? In a story that merges the ongoing takeover drama of American telecom stalwart Sprint by Softbank (or Dish Network) and this ongoing fear of Chinese companies like Huawei and ZTE, the American government has demanded Softbank (a Japanese company mind you) remove all Huawei products before acquisition approval for Sprint be granted.

Evidence of the lunacy that pervades the American mindset, using the controversy stirred up between the American government and Chinese telecoms Huawei and ZTE in late 2012, rhetoric has recently surfaced suggesting that potential ties between Softbank and Huawei (i.e. because Softbank employs some Huawei hardware) that the former may pose a national security threat as well, despite the fact Softbank is a Japanese, not Chinese, company.

Lost in all this is the news, however, that Softbank has been granted security approval to move forward with its takeover of Sprint, much to the chagrin of rival suitor Dish Network. In order to appease the regulatory powers that be, however, Softbank and Sprint have had to agree to a number of stipulations, such as “giving the Department of Homeland Security and Department of Defense the power to review and veto equipment, as well as the removal of equipment made by Huawei.”

But where is all this rhetoric against Softbank coming from, given that the Japanese company has a tenuous connection to anything related to China, communism, or Huawei (far less it seems than Apple’s connection to China, for example)? It seems, perhaps not surprisingly, that the motivating factor behind this witch hunt is Dish Network itself, the satellite television provider having launched a campaign designed to voice what has no doubt been its long-standing concern over foreign ownership ofU.S. telecommunications networks.

In fact, despite Softbank striking a security agreement with the US authorities (final acquisition approval from the FCC still to come), Dish Network remains quite concerned about our national security, releasing a statement  saying that such security concerns have yet to be truly addressed, calling on Congress to review the entire thing…again.

Calling into question Dish Network and the American government’s combined ability to distinguish between very different Asian countries, while I’m all for due process this entire escapade strikes me as gross overkill in response to an imagined threat.

If foreign ownership is a problem in American telecommunications then it affects much more than just Sprint, as currently the only all-American telecom is AT&T; leading me to wonder when we’ll hear Dish Network’s impassioned plea against UK-based Vodafone’s stake in Verizon? If the concerns are about a dangerous Chinese presence in American telecommunications specifically, why pursue Softbank at all, as a proxy war against Huawei would still involve many other companies, foreign and domestic, operating in the US?

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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