23 December 2000. Thanks to BS.
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http://www.totaltele.com/view.asp?ArticleID=35057pub=tt&categoryid=0 

U.S. works out security issues with VoiceStream & DT
By Jeremy Pelofsky, Reuters

20 December 2000

U.S. law enforcement authorities are working to address national security concerns about acquisitions of VoiceStream Wireless Corp. and Powertel Inc. by Deutsche Telekom AG , which is partially owned by the German government.

The Federal Bureau of Investigation and the companies filed a joint petition [below] made available on Tuesday asking the Federal Communications Commission, which has to determine whether the combinations are in the public interest,to hold off ruling until the parties reach an agreement.

VoiceStream , based in Bellevue, Wash., agreed to be acquired by the German telecommunications giant earlier this year in a $34 billion deal. VoiceStream also agreed to acquire Powertel for about $6 billion in August.

Law enforcement agencies "have concerns that the merger could, absent an appropriate agreement, impair the ability of authorized governmental agencies in the U.S. to satisfy their obligations to preserve the national security, enforce the laws and protect the public," according to the petition.

Germany's 44 percent stake in DT, which the government has pledged to divest, has raised concerns among some in the U.S. Congress about the impact the German government backing could have on competition and U.S. national security.

The agencies are seeking assurances of the ability to conduct lawfully-authorized electronic surveillance of domestic calls and those that begin or end in the United States, the petition said, a copy of which was filed with the FCC.

The FBI and U.S. Justice Department also said they are seeking to prevent as well as detect foreign-based or other illegal surveillance that could risk U.S. security and the privacy of the nation's telecommunications system.

"The parties are currently and in good faith working diligently working toward such an agreement," the filing said.

A VoiceStream spokeswoman declined to comment on the petition.

The company in the past said it expected to have to address concerns raised by U.S. law enforcement authorities but did not anticipate any problems reaching an agreement.

The merged company would represent a "substantial U.S. wireless service provider" offering near nationwide personal communications service (PCS) coverage as well as in Europe using the global system for mobile communications standard (GSM), according to the petition.

Sen. Ernest Hollings, a South Carolina Democrat, has urged the FCC to block the VoiceStream-DT deal because he says U.S. law prohibits a telecommunications company that is more than 25 percent owned by a foreign government from acquiring U.S. firms.




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Source: https://haifoss.fcc.gov/prod/ecfs/retrieve.cgi?native_or_pdf=pdf&id_document=6512258515  (PDF, 453KB)

[11 pages.]




DOCKET FILE COPY ORIGINAL U.S. Department of Justice
Federal Bureau of Investigation

_______________________________________________________________________________
Office of the General Counsel Washington. D.C. 20535
December 15, 2000




By Hand Delivery

RECEIVED
DEC 15 2000
FCC MAIL ROOM

Ms. Magalie Roman Salas, Secretary
Federal Commumcations Commission
445 12th Street, S. W.
Room TW-B204
Washington, D.C. 20554

Re: Joint Petition to Defer in the Matter of VoiceStream Wireless Corporation, Powertel, Inc.. and Deutsche Telekom AG ("DT') to permit, pursuant to Section 310(b)(4), 100 percent Indirect Foreign Ownership by Deutsche Telekom of Licenses and authorizations held by Voicestream and Powertel. (File No. 0000211827 DA 00-2251).
Dear Ms. Salas:

Transmitted herewith, on behalf of VoiceStream Wireless Corporation ("VoiceStream"), Powertel, Inc. ("Powertel") (Collectively "transferors") and Deutsche Telekom AG ("DT" or "transferee"), and the Federal Bureau of Investigation ("FBI") are an original and four copies of a Joint Petition to Defer in the above-referenced matter. The enclosed petition requests that the Commission accept this Petition and defer the grant of authorizations requested in the above-referenced applications and docket pending a resolution by the parties of those aspects of the applications that give rise to national security, law enforcement, and public safety concerns.

Any questions regarding VoiceStream or Powertel should be directed to the respective undersigned counsel, and questions regarding DT should be directed to Deutsche Telekom, Inc. at 202-452-0656.

Sincerely,
[Signature]

James G. Lovelace
Office of the General Counsel
935 Pennsylvania Ave., N.W., Room 7435
Washington, D.C. 20535
(202) 324-5640

Enclosures
cc: Office of Media Relations
International Transcription Service, Inc.

No. of Copies rec'd 0+4
List ABCDE
____________________



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RECEIVED
DEC 15 2000
FEDERAL COMMUNICATIONS COMMISSION
OFFICE OF THE SECRETARY

Before the
Federal Communications Commission
Washington, D.C. 20554


___________________________________
In the Matter of:
VoiceStream Wireless Corporation,
Powertel, Inc.,

Transferors

and

Deutsche Telekom AG ("DT")

Transferee

For Consent to Transfer Control of
Licenses and Authorizations and
for Declaratory Ruling pursuant to
Section 310(b)(4) allowing 100 percent
Indirect Foreign Ownership by DT of
Transferors Licenses and Authorizations
___________________________________
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) IB Docket No. 00-187
DA 00-2251
File No 0000211827





To: The Wireless Bureau and the International Bureau

JOINT PETITION TO DEFER

VoiceStream Wireless Corporation ("VoiceStream"), Powertel, Inc. ("Powertel"), (collectively "transferors"), corporations organized under the laws of the United States, and Deutsche Telekom AG ("DT" or "transferee"), a corporation organized under the laws of the Federal Republic of Germany, and the Federal Bureau of Investigation ("FBI"), (collectively, the "parties"), through their attorneys, respectfully request that the Federal Communications Commission {"Commission") (a) accept this Petition1 (b) defer grant of the above-captioned applications pending a resolution by the parties, and the Department of Justice ("DOJ"), of those aspects of the applications that may raise potential national security, law enforcement, and public safety issues, and (c) condition any such grant on compliance with the terms of an agreement entered into to address those issues.

____________________

1 The filing of this petition two days after the date for submission of comments (see Order, VoiceStream Wireless Corp., Powertel, Inc. and Duetsche Telekom AG, IB Docket No.00-187 , DA 00- 2521 (rel. Nov. 8, 2000), should in no way prejudice any interested party's ability to reply as the deadline for filing responses is January 8,2000.

In the captioned docket, VoiceStream. Powertel, and DT have each filed applications under Sections 214 and 310(d) of the Communications Act of 1934, as amended, ("the Act"), 47 U.S.C. §§ 214. 310 (1997), seeking Commission consent to transfer control of licenses and authorizations presently held by VoiceStream. Powertel, and their subsidiaries to DT.2 As of September 18. 2000, 58.2% of DT was owned by the German government. According to the applicants' filings with the Commission, the transfer of control would take place as the result of a proposed merger, whereby first VoiceStream, and then Powertel, would become wholly owned subsidiaries of DT.3 To permit such foreign control, VoiceStream and Powertel have each also filed petitions pursuant to section 310(b)(4) of the Act for a declaratory ruling that the 100 percent indirect foreign ownership by DT of licenses held or controlled by VoiceStream, Powertel, and their subsidiaries is in the public interest.4 VoiceStream has also filed, and VoiceStream and Powertel may hereafter file, additional requests for approval of DT's acquisitions of noncontrolling interests held (or proposed to be held) by VoiceStream or Powertel in other licenses, as well as requests for Commission consent to assign or to transfer control of additional licenses to VoiceStream5 and Powertel, which would in turn be included in the scope of any Commission approval of the transfer of control of to DT.

____________________

2 The services to which these applications pertain are: Personal Communications Service ("PCS"), Specialized Mobile Radio ("SMR"), Experimental and Fixed Microwave services, Local Multipoint Distribution Service "LMDS"), and international Section 214 authorizations.
3 VoiceStream and Powertel also filed a separate set of applications seeking Commission consent to allow Powertel to become a wholly owned subsidiary ofVoiceStream rather than DT, in the event the proposed VoiceStream-DT merger is not approved. With respect to the acquisition of Powertel by VoiceStream, the FBI and DOJ request that the Commission condition the transfer of control of Powertel licenses and authorization to VoiceStream on compliance with the provisions of the Agreement made on January 26, 2000, between VoiceStream and VoiceStream Wireless Holding Corporation and the DOJ and the FBI, and adopted as a condition to the authority granted by the Commission in the following proceeding: VOICESTREAM & OMNIPOINT; File Nos. 0000016354, et al. DA 99-1634, l5 FCC Rcd- 3341 (February 15, 2000).

4 The VoiceStream petition for declaratory ruling has been assigned File No. ISP-PDR-20000918-00031. The Powertel petition for declaratory ruling has been assigned File No. ISP-PDR-20000918-00030.

5 See Applications of Cook Inlet Region, Inc., Transferor, and VoiceStream Wireless Corporation, Transferee, et al., consented by Order dated Dec. 13,2000, DA 00-2820; Application for consent to assign licenses from STPCS D Block, LLP to VoiceSb"eam PCS BTA I License Corporation, consented by Public Notice dated Dec. 6, 2000, Report Number 717; Application to assign licenses from Shenandoah Mobile Company to Cook lnlet/VS GSM IV PCS, LLC and VoiceStream PCS BTA I License Corporation, respectively, consented by Public Notice dated Nov. 29, 2000, Report Number 711; Application to partially assign licenses KNLF249 and KNLF253 from AT&T Wireless PCS, L.L.C. to Omnipoint Holdings, Inc., File No.0000 192987 (filed July 27, 2000); Application for consent to partially assign license KNLF209 from Pacific Telesis Mobile Services, LLC to Cook Inlet/VoiceStream GSM II PCS, LLC (filed Dec. 11, 2000) (paper filing; file no. to be assigned); Application for consent to disaggregate license KNLF205 from Pacific Telesis Mobile Services, LLC to Omnipoint NY MTA License, LLC, File No.0000287262 (filed Dec. 11, 2000); Application for consent to disaggregate license KNLF209 from Pacific Telesis Mobile Services, LLC to Omnipoint NY MTA License, LLC, File No. 00000288898 (filed Dec. 11, 2000); Application for consent to disaggregate license KNLF209 from Pacific Telesis Mobile Services, LLC to VoiceStream PCS II License Corporation, File No.0000287259 (filed Dec. 11, 2000).


If the merger closes, the resulting entity would be a substantial U.S. wireless service provider with near-nationwide coverage of Personal Communications Service ("PCS") throughout the United States and Europe using the global system for mobile communications ("GSM") standard. The combination of VoiceStream's and Powertel's networks with DT's extensive systems in Europe will further enable the merged entity to provide advanced wireless services and new services.

Because this resulting substantial U.S. wireless carrier using GSM technology would ultimately, after the mergers, be subject to control by an entity of which approximately 44 percent would be owned by a foreign government, the FBI and the DOJ have concerns that the merger could, absent an appropriate agreement, impair the ability of authorized governmental agencies in the U.S. to satisfy their obligations to preserve the national security, enforce the laws, and protect the public safety. To the extent the applicants seek authority to ultimately transfer control of these licenses to DT, the FBI and DT request that, until the parties reach an agreement that adequately addresses the national security, law enforcement, and public safety issues potentially presented by the transactions, the Commission defer approving any grant of authority for DT to acquire control of any of the foregoing licenses, authorizations or noncontrolling interests.

Because the integrity of U.S. telecommunications services is critical to the ability of our government to preserve the national security, enforce the laws, and maintain the safety of the public, the FBI and the DOJ have previously availed themselves of the opportunity under Sections 214 and 310 of the Act, and implementing regulations, to comment regarding the public interest concerns raised by particular transactions. In the Foreign Participation Order, the Commission said that, in reviewing license applications from foreign carriers under Sections 214 and 310(b)(4) of the Communications Act, it would: (1) continue to apply the public interest test, and (2) "continue to find national security, lawenforcement, foreign policy and trade policy concerns relevant to our decision to grant or deny Section 214 and 310(b)(4) applications from applicants from WTO Member[s]."6 The Commission elaborated by saying that:

[W]e realize that foreign participation in the U. S. telecommunications market may implicate significant national security or law enforcement issues uniquely within the expertise of the Executive Branch. . . .
We thus will continue to accord deference to the expertise of Executive Branch agencies in identifying and interpreting issues of concern related to national security, law enforcement, and foreign policy that are relevant to an application pending before us.7

____________________

6 In the Matter of Rules and Policies of Foreign Participation in the US Telecommunications Market, 12 FCC Rcd 23,891; Para. 61 (Nov. 1997). The presumption the Commission has adopted "in favor of ently for foreign participation applies only to competition concerns that may arise because of a foreign carrier's market power in a foreign market." para. 57. Concerns relating to national security, law enforcement, and public safety are to be given consideration independent of any competitive concerns presented by the transaction.
7 In the Matter of Rules and Policies of Foreign Participation in the US Telecommunications Market, 12 FCC Rcd 23,891; Paras. 62-63 (Nov. 1997).


It is the opinion of the FBI and the DOJ that granting the authority requested by the parties in this transaction could present significant impediments to the ability of our government to meet its obligations to the citizens to preserve the national security, enforce the laws and protect the public safety. These obligations can only be satisfactorily fulfilled by the implementation of an agreement and the imposition of conditions which will ensure that the degree of foreign ownership of U.S. telecommunications facilities and services proposed here does not impair the ability of Federal, State and local governments to: (1) conduct securely and effectively lawfully-authorized electronic surveillance of domestic U. S. calls or calls that originate or terminate in the United States; (2) prevent and detect foreign-based or other illegal electronic surveillance within the United States, which may jeopardize the security of the United States and privacy of U.S. telecommunications; and (3) satisfy U.S. National Security Emergency Preparedness and U.S. infrastructure protection requirements.

In their respective filings with the Commission, DT, VoiceStream, and Powertel have each committed to enter into an agreement with Executive Branch agencies to address fully the potential threats posed to national security, law enforcement and public safety that this transaction presents, and have each further agreed to the subsequent conditioning of the affected authorizations on compliance with that agreement.8 The parties are currently and in good faith working diligently towards such an agreement. Accordingly, the parties jointly urge the Commission to defer considering the application or approving the transferring of the attendant licenses absent such an agreement and the imposition of appropriate conditions.

___________________

8 See Powertel Application at 24 n.68; VoiceStream Application at 42-43.

Wherefore, in view of the foregoing, the parties respectfully request that the Commission accept for filing the instant Petition to Defer with regard to the captioned applications pending an agreement among the parties to resolve the concerns addressed herein, and the imposition of the terms of such agreement as conditions to the licenses.

Date: December 15,2000

[Signature]
Patrick W. Kelley
Deputy General Counsel
FEDERAL BUREAU OF INVESTIGATION
935 Pennsylvania Avenue, N. W.
Washington, D.C. 20535
(202) 324-6829

Federal Bureau of Investigation

[Signature]
William T. Lake
John H. Harwood II
William R. Richardson, Jr.
Matthew A. Brill
Julie A. Veach
WILMER, CUTLER & PICKERING
2445 M. Street, N.W.
Washington D.C. 20037
(202) 663-6000

[Signature]
Edward A. Yorkgitis, Jr.
Brian T. O'Connor
Paul G. Madison
Robert A. Calaff
KELLEY DRYE & WARREN L.L.P.
1200 Nineteenth Street, N.W., Suite 500
Washington, D.C. 20036
(202) 955-9600

Counsel for Powertel, Inc.

Hans-Willi Hefekauser
Wolfgang Kopf
Andreas Tegge
DEUTSCHE TELEKOM, INC.
1020 Nineteenth Street, N.W.,
Suite 850
Washington, D.C. 20036
(202) 452-0656

Counsel for Deutsche Telekom AG

[Signature]
Louis Gruman
Doane Kiechel
Nina A. Mrose
Christa M. Parker
MORRISON & FOERSTER
2000 Pennsylvania Avenue, N. W.
Washington, D.C. 20037
(202) 887-1500

Counsel for VoiceStream Wireless Corp



Certificate of Service

I, Myla Saldivar-Trotter, Federal Bureau of Investigation, hereby certify that a true copy of the foregoing Joint Petition to Defer served this 15th day of December, 2000 via hand delivery (indicated by *) or by mail to the following parties:

Ari Fitzgerald* Daniel J. Connors*
Office of Chairman Kennard Office of Commissioner Ness
Federal Communications Commission Federal Communications Commission
445 Twelfth Street, S.W., Room 8B201 445 Twelfth Street, S.W., Room 8B115
Washington, D.C. 20554 Washington, D.C. 20554

Lauren Kravetz* Justin Connor*
Policy and Rules Branch Policy and Facilities Branch
Commercial Wireless Division Telecommunications Division
Wireless Telecommunications Bureau International Bureau
Federal Communications Commission Federal Communications Commission
445 Twelfth Street, S.W., Room 4-A163 445 Twelfth Street, S.W., Room 6-A832
Washington, D.C. 20554 Washington, D.C. 20554

Paul E. Misener* Peter Tenhula*
Office of Commissioner Furchtgott-Roth Office of Commissioner Powell
Federal Communications Commission Federal Communications Commission
445 Twelfth Street, S.W., Room 8A204 445 Twelfth Street, S.W., Room 8A204
Washington, D.C. 20554 Washington, D.C. 20554

Karen L. Gulick* James Bird*
Office of Commissioner Tristani Office of General Counsel
Federal Communications Commission Federal Communications Commission
445 Twelfth Street, S.W., Room 8C302 445 Twelfth Street, S.W., Room 8C818
Washington, D.C. 20554 Washington, D.C. 20554

John Branscombe* Jarnison Prime*
Commercial Wireless Division Public Safety and Private Wireless Division
Wireless Telecommunications Bureau Wireless Telecommunications Bureau
Federal Communications Commission Federal Communications Commission
445 Twelfth Street, S.W., Room 4A234 445 Twelfth Street, S.W., Room 4A734
Washington, D.C. 20554 Washington, D.C. 20554

Claudia Fox* Carl Huie*
Policy and Facilities Branch Experimental Licensing Branch
Telecommunications Division Electromagnetic Compatibility Division
International Bureau Office of Engineering and Technology
Federal Communications Commission Federal Communications Commission
445 Twelfth Street, S.W., Room 6A848 445 Twelfth Street, S.W., Room 7A361
Washington, D.C. 20554 Washington, D.C. 20554

Cheryl A. Tritt William T. Lake
Louis Gruman John H. Harwood II
Doane Kiechel William R. Richardson, Jr.
Nina A. Mrose Matthew A. Brill
Christa M. Parker Julie A. Veach
Morrison & Foerster Wilmer, Cutler & Pickering
2000 Pennsylvania Avenue, N.W. 2445 M Street, N.W.
Washington, D.C. 20037 Washington, D.C. 20037

John T. Nakahta Hans-Willi Hefeskauser
Karen L. Gulick Wolfgang Kopf
Samuel L. Feder Andreas Tegge
Harris, Wiltshire & Grannis LLP Deutsche Telekom, Inc.
1200 Eighteenth Street, N.W. 1020 Nineteenth Street, N.W., Suite 850
Washington, D.C. 20036 Washington, D.C. 20036

David A. Miller Edward A. Yorkgitis, Jr.
Brian T. O'Connor Paul G. Madison
Robert A. Calaff Kelley Drye & Warren L.L.P.
VoiceStream Wireless Corp 1200 Nineteenth Street, N. W. , Suite 500
1300 Pennsylvania Avenue, N.W., Suite 700 Washington; D.C. 20036
Washington, D.C. 20004

Jill Dorsey The Honorable Ernest F. Hollings
Powertel, Inc. United States Senate
1239 O.G. Skinner Drive Committee on Commerce, Science &
West Point, GA 31833 Transportation
125 Russell Senate Office Building
Washington, D.C. 20510

Susan Grant Howard Frisch
Vice President for Public Policy Director, North American Operations
National Consumers League UT Starcom
1701 K Street, N.W., Suite 1200 33 Wood Avenue South, 8th Floor
Washington, D.C. 20006 Iselin, NJ 08830

Jason Mahler Pace Duckenfield
Vice President and General Counsel Counsel
Computer & Communications Industry The Alliance for Public Technology
Association Suite 900
666 Eleventh Street, N.W., Sixth Floor 919 Eighteenth Street, N.W.
Washington, D.C. 20001 Washington, D.C. 20006

Thomas J. Donohue Steve Judge
United States Chamber of Commerce Securities Industry Association
1615 H Street, N.W. 1401 Eye Street, N.W.
Washington, D.C. 20062 Washington, D.C. 20005

Christine E. Enemark Todd Malan
Counsel for Cook Inlet Region, Inc. Organization for International Investment
Covington & Burling 1901 Pennsyvania Avenue, N. W .
1201 Pennsylvania Avenue, N.W. Suite 807
Washington, D.C. 20004-2401 Washington, D.C. 20006

Troy F. Tanner Debbie Goldman
Andrew D. Lipman 501 Third Street, N.W.
Swidler Berlin Shereff Friedman, LLP Washington, D.C. 20001
3000 K Street, N.W., Suite 300
Washington, D.C. 20007


[Signature]
Myla Saldivar-Trotter


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