FBI to Scrutinize NTT-Verio By the InternetNews.com Staff
Tokyo-based Verio Inc. is being scrutinized by the Federal Bureau
of
Investigation.
According to the Wall Street Journal, the FBI Thursday raised
national
security concerns about the Japanese company's attempt to acquire
the
U.S. Internet service provider.
The FBI registered concerns with the Treasury Department about
NTT's
(NYSE:NTT) planned purchase of Verio (NASDAQ:VRIO) because
agency is
concerned that foreign ownership of Verio would inhibit its ability to
maintain surveillance over its telecommunications network.
NTT posted a $5.5 billion offer for Verio in May to acquire the final
90 percent of Verio it did not already own. Verio provides Web
hosting
and network services for about 20 percent of the Fortune 500
companies
in the world.
The FBI contents that in order to protect U.S. facilities, it must be
assured that only U.S.-owned companies can be used to handle
domestic
Internet traffic. In the past, the FBI has also insisted that the
companies employ U.S. citizens to handle potential wiretapping
activities.
NTT announced Friday that the Treasury Department's Committee on
Foreign Investment in the U.S. would conduct a 45-day review of the
planned merger.
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