Policy & Law
As we saw most recently with SoftBank’s acquisition of Sprint, foreign companies looking to get into the US telecoms business need to sign away some important decision-making power. The Wall Street Journal reports that beginning with the Verizon Wireless joint venture in 2001, foreign-owned telecom companies have come under the purview of the US intelligence community by way of "security agreements" that give them important access to network operations. And with three out of four national networks now falling under the agreements, that’s a lot of access.
The agreements typically give government agencies simplified access
The Journal writes that in extreme cases like the SoftBank-Sprint deal, the agreements can include rights to veto equipment purchases and remove existing gear, but they typically give government agencies simplified access to the carriers’ networks as well. For instance, the security agreement in place on the 2001 T-Mobile acquisition of VoiceStream Wireless required communications infrastructure to "pass through a facility from which lawful electronic surveilance could be conducted" and prohibited the German parent from sharing communications data with foreign governments. It also allowed the FBI and DoJ to inspect the company's "communications infrastructure" so long as they gave reasonable notice.
"The fact that they have these rights to inspect gives them a window into equipment vendors that otherwise the government wouldn’t have," allowing the government to "go to school" on network operations, said Andrew Lipman, who, as a partner of Bingham McCutchen LLP, has worked on about three dozen security agreements over the last two decades. This knowledge of the networks’ interiors gives the government "the ability to — when appropriate — engage in record collection, data collection, and wiretapping," he added. Combined with reports that 75 percent of US internet traffic is within the reach of the NSA, that’s one broad net.
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