Dish Network Cites Chinese Influence in Objection to Telecom Merger

Dish Network filed a complaint objecting to a pending merger between Sprint and SoftBank, citing a Justice Department plea deal that linked the Japanese conglomerate to bribes given to Chinese telecom officials.

In a complaint filed Monday with the Federal Communications Commission, Dish Network cited a plea agreement between the Justice Department and a SoftBank official who gave $7 million in bribes to Chinese officials for telecommunications contracts.

Part of those bribes included creating fictitious positions and perks in the United States for employees of state-owned telecommunications firms in China, including Huawei and ZTE.

UTSI, a company with ties to SoftBank, “corruptly” gave vacations “to employees of government-controlled telecommunications companies in the People’s Republic of China” and then improperly accounted for such trips as having a training purpose, according to the Justice Department agreement highlighted by Dish Network in its letter to the FCC.

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Dish Network and SoftBank have made competing bids for Sprint Nextel, with Dish offering some $25.5 billion for the nation’s third largest cell-phone provider, topping SoftBank’s $20 billion bid, according to the New York Times.

The Justice Department plea agreement is significant because the House Intelligence Committee concluded in 2012 that U.S. companies should not do business with Huawei or ZTE because of their extensive ties to the Chinese government.

The Intelligence Committee found that the two firms posed a major cyber-security threat to U.S. intellectual property. The committee report recommended that mergers involving Huawei and ZTE be blocked and that U.S. network providers seek other vendors for their projects.

The committee also recommended that federal agencies investigate unfair trade practices of the Chinese telecommunications sector, including China’s continued financial support of key companies, and singled out Huawei as needing to become more transparent and responsive to U.S. legal obligations.

“What Huawei couldn’t do through the front door is now trying to do through the backdoor with Sprint,” Bradley A. Blakeman, professor of politics and public policy at Georgetown University and a former deputy assistant to President George W. Bush, told Newsmax.

“The Chinese are smart,” Blakeman said. “They understand that they don’t need to own a company outright. They just need to have control over the infrastructure on which these companies rely.”

A spokeswoman for the House Intelligence Committee said that they are monitoring the merger but are not commenting on it at this time.

Republican Rep. Mike Rogers of Michigan, chairman of the Intelligence Committee, recently said that he has been reassured by SoftBank’s commitment to curtail its use of Huawei equipment in Sprint’s networks, yet questions remain about ongoing transactions between SoftBank and Huawei.