By Brendan Sasso - 05/24/13 04:10 PM EDT
Allowing Japanese company SoftBank to buy Sprint could expose critical communications networks to hackers, Sen. Chuck Schumer (D-N.Y.) warned in a letter to federal regulators on Friday.
He worried that the deal could help the Chinese government spy on the private communications of U.S. companies and people.
“I have real concerns that this deal, if approved, could make American industry and government agencies far more susceptible to cyberattacks from China and the People’s Liberation Army, already the number one source of electronic espionage against American interest,” Schumer wrote. “We must proceed with extreme caution before allowing something as vital as our communications and internet infrastructure from falling into the hands of a foreign company with reported ties to China.”
Sen. John McCain (R-Ariz.) raised similar concerns in a letter on Thursday.
Dish Network, which is also trying to buy Sprint, has been sounding alarm about the alleged risk of SoftBank and has been urging regulators to ensure that a U.S. company owns Sprint's networks.
In many countries, SoftBank relies on telecommunications equipment produced by Chinese firms such as Huawei and ZTE. Because of those companies' ties to the Chinese government, the House Intelligence Committee determined in a report last year that they pose a threat to U.S. national security.
In response to those concerns, SoftBank has vowed not to use Huawei's equipment in the United States. The Wall Street Journal reported on Wednesday that the company has also agreed to allow the U.S. government to have veto power over one of Sprint's board directors, who would oversee national security issues for the company.
But Schumer wrote that he is still concerned that "critical parts of Sprint’s future network may also become dependent on unsecure Chinese equipment and vulnerable to interference."
"With Sprint’s ultimate control in foreign hands, there are significant questions as to whether the United States would have sufficient influence and oversight to mitigate these concerns," he wrote.
Schumer also noted that SoftBank had ties to UTStarcom, a company that admitted to bribing Chinese officials for telecommunications contracts. Masayoshi Son, the founder and CEO of SoftBank, was chairman of the board of of UTStarcom from 1995 until 2003.
"The settlement documents do not name, implicate, or otherwise relate to SoftBank or Mr. Son, and are legally and factually irrelevant to this proceeding," SoftBank wrote in a recent filing with the Federal Communications Commission.
The FCC is reviewing whether allowing the SoftBank deal would be in the public's interest, while a committee made up of agencies including the Departments of Treasury, Justice and Homeland Security is reviewing whether the merger poses a threat to national security.
In his letter to the regulators, Schumer noted that Congress is working on cybersecurity legislation and said that critical infrastructure protection is a "topic of intense legislative scrutiny."
"In these circumstances, I urge you to take a very careful look at SoftBank’s proposed acquisition of Sprint, a key provider of U.S. communications networks and services, to ensure that our nation’s security is not placed at risk," he wrote.