Tokyo-based Nippon Telegraph
and Telephone Corp.’s potential takeover of Web hosting firm 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
planned purchase of Verio 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.