The U.S. Department of Justice could hold up or even stop the approval of the proposed merger between Sprint Nextel Inc. and SoftBank Mobile Corp. because of national security issues, it emerged Tuesday.
The DoJ has sent the Federal Communications Commission (FCC) a letter asking it to defer action on the merger until the DoJ, Federal Bureau of Investigation (FBI) and Department of Homeland Security have completed a review.
The agencies "are currently reviewing this matter for any national security, law enforcement, and public safety issues but have not yet completed that effort," wrote Jennifer Rockoff, attorney advisor at the National Security Division of the DoJ in a letter posted on the FCC website.
Why this matters
The proposed $20 billion merger between the Sprint and SoftBank has already faced challenges from the likes of Dish Network Corp., although Dish is now backing off the possibility of stopping the review. A DoJ national security probe of the merger could, however, be more serious. It is not clear at this point what -- if any -- security concerns the agencies have about SoftBank.