Report: FBI Approves NTT-Verio Deal

SAN FRANCISCO (08/11/2000) - The U.S. Federal Bureau of Investigation has resolved national security concerns over a Japanese telecom giant's US$5.5 billion deal to buy the Web-hosting company Verio Inc., the Wall Street Journal Interactive reported Friday.

The Journal quoted U.S. officials as saying an agreement, aspects of which still need to be finalized, had been crafted after weeks of intense talks between NTT and officials from the FBI and the Justice Department. But on Friday evening in Tokyo, NTT Communications declined to comment on the progress of the negotiations.

Those talks highlighted growing law-enforcement fears that the entry of majority-government-owned foreign firms into the expanding U.S. telephone and Internet markets could undermine the FBI's ability to investigate criminals by tapping their digital communications. The resolution of the FBI's wiretapping issue will set an important precedent for the way U.S. law enforcement handles the rapidly growing, lightly regulated world of the Internet.

NTT Communications, a long-distance and international phone unit of NTT, reached a deal in May to pay $60 a share to buy the 90 percent of Verio it does not already own. But it has had to extend its tender offer four times, in response to inquiries from U.S. law enforcement agencies about their ability to obtain wiretaps needed for investigations.