Is the Government Siding With DISH Against Sprint?

The Department of Justice has written to the Federal Communications Commission asking it to "defer action" in the matter of Sprint Nextel  (NYSE: S  ) selling 70% of itself to Japanese mobile operator SoftBank.

The reason for the request, the DOJ writes, is that it, the FBI, and the Department of Homeland Security need more time in which to review the agreement for "any national security, law enforcement, and public safety issues."

On Dec. 20, DISH Network (NASDAQ: DISH  ) also filed a request with the FCC in regard to the SoftBank/Sprint agreement. It wanted more time in which to file a petition to deny the buyout. In that request, DISH raised the specter of foreign control of the airwaves: "Is it in the public interest for a foreign company to control more spectrum below 3 GHz than any one other company in the United States?"

DISH did not spell out whether it feels a Japanese company controlling a large amount of spectrum would be a matter of national security or just a matter of protectionism.

But DISH's overarching motive to put the kibosh on the SoftBank/Sprint deal is to make it less likely for Sprint to be able to pull off its buyout of Clearwire (UNKNOWN: CLWR.DL  ) . The $8 billion in upfront money from SoftBank is the wherewithal Sprint would be using to pay for the Clearwire acquisition.

Since DISH has made a counteroffer for Clearwire, it can only be applauding the DOJ's request to defer action.

The other first-tier mobile operators have not come out against the SoftBank/Sprint deal -- at least not directly.

Earlier this week, Verizon (NYSE: VZ  ) filed its comments with the FCC. Verizon said it "takes no position on the merits" of the merger, but did point out that with SoftBank acquiring control of Sprint, and Sprint gaining "de facto control of Clearwire," SoftBank would then have "indirect control of Clearwire" and therefore Clearwire's "significant ... spectrum holdings."

AT&T (NYSE: T  ) has not condemned the SoftBank/Sprint merger either, but has played the "foreign ownership" card. Last October, AT&T vice president Brad Burns issued a statement that included this: "Softbank's acquisition of Sprint and the control it gains over Clearwire will give one of Japan's largest wireless companies control of significantly more U.S. wireless spectrum than any other company. We expect that fact and others will be fully explored in the regulatory review process."

That regulatory process is indeed grinding away. It should be noted that the DOJ request does not include a time frame for the law enforcement agencies to complete their review.

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