Congress Tackles Foreign Government Ownership of U.S. Telecoms
By John Filar Atwood
The FBI, the Clinton Administration and others told Congress last week that no steps should be taken to curb foreign government ownership of United States telecommunications companies. Foreign investment has increased as telecommunications has evolved into a borderless industry. That evolution was hastened by a 1997 agreement in which the World Trade Organization nations agreed to open their telecom markets to foreign companies.
The problem with the agreement, according to Congressman Tom Bliley, is that many foreign governments have been slow to relinquish control. "Many members of Congress supported the agreement with the expectation that WTO members would quickly and fully privatize their telecom monopolies, but privatization is slow in coming," he said.
He noted that Japan still owns 53% of NIPPON TELEPHONE AND TELEGRAPH (NTT), the German government owns 58% of DEUTSCHE TELEKOM (DT) and France holds 54% of FRANCE TELECOM's (FTE) shares.
Larry Parkinson, the FBI's general counsel, said that control of U.S. communications networks could give a foreign government access to certain confidential information. A government could have "the ability to direct key employees to use routine monitoring capability to access confidential private communications and data of U.S. companies and citizens using the network," he said.
However, he advised that it is not a large problem yet because the FBI and Department of Justice have been working with companies deploying global systems to grant the FBI the leeway it needs to protect privacy and the country's national security.
Assistant U.S. Trade representative Richard Fisher, speaking on behalf of the Clinton Administration, told the House subcommittee on telecommunications, trade and consumer protection that real progress had been made since the WTO's Basic Telecommunications Agreement went into effect in February 1998. Mr. Fisher also said that "the U.S. government already possesses effective tools to address the competition and national security concerns raised by any foreign government-owned carrier wishing to participate in the U.S. telecom market."
He cited, among other things, the FCC's public interest test, which allows the agency to scrutinize carefully competitive, national security and other concerns posed by foreign investment in the U.S.
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