FBI Holds Up NTT-Internet Deal
Jul. 06, 2000
NEW YORK (AP) _ The FBI is raising national security concerns about Tokyo-based NTT Communications' attempt to acquire a U.S. Internet service provider, the Japanese company confirmed Thursday.
Both the Federal Bureau of Investigation and the Department of Justice have approached NTT regarding its planned purchase of Englewood, Colo.-based Verio Inc., NTT Communications spokesman Fuyuki Natsuneda said Thursday. Subsequently, NTT was told June 30 of an inquiry by the Committee on Foreign Investment in the United States, he said.
Natsuneda refused to speculate whether the FBI or DOJ were involved in the inquiry, which was first disclosed by the Wall Street Journal Thursday.
The CFIUS, a Treasury Department committee chaired by the Treasury secretary, reviews acquisitions of U.S. corporations by a foreign entities to make sure they don't threaten the national security of the United States.
A Treasury spokesman would neither confirm nor deny that the FBI had registered concerns with the department about the proposed deal.
NTT has offered $5.5 billion for Verio, which links to the Web more than 20 percent of the companies on Standard & Poor's 500-stock index.
In telecommunications deals, the FBI has asked for assurances that only U.S. facilities be used to handle U.S. traffic. The FBI has insisted the companies employ U.S. citizens to handle wiretapping activities.
Natsuneda said NTT considers Verio's Internet backbone and Web hosting assets among the best in the industry, and hopes to connect the Japanese company's existing Asian network with that of the U.S. company to provide ``seamless'' services to its clients.
He said NTT is fully cooperating with the CFIUS inquiry, and expects a speedy resolution. The CFIUS had not informed NTT of its reason for the inquiry, he added.
NTT Communications is part of Japanese telecommunications telecom giant Nippon Telegraph and Telephone Corp.