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U.S. eyes NTT-Verio deal
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July 6, 2000: 1:24 p.m. ET
Potential takeover of ISP by Japan firm raises national security concerns
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NEW YORK (CNNfn) - Nippon Telegraph & Telephone's planned acquisition of Internet service provider Verio has come under scrutiny by the U.S. government, which is worried the deal could compromise national security.
The Treasury Department is now heading a joint inquiry that includes the FBI, National Security Council (NSC), and the Departments of State, Defense and Commerce, an NSC source confirmed Thursday.
The concern is that foreign ownership of Verio will inhibit the government's ability to maintain surveillance over the company's telecommunications network, according to a report in the Wall Street Journal. The FBI requires access to obtain wiretaps for the serving of subpoenas in their investigations.
 NTT announced last Friday that the Committee on Foreign Investment in the U.S., a body within the Treasury Department, is conducting a 45-day review of the planned merger of Japan's leading telecommunications company and the corporate Internet and Web hosting firm.
The company said in a statement it believes the transaction does raise national security concerns.
NTT announced May 8 that it would acquire Verio (VRIO: Research, Estimates) for $5.5 billion, or $60 per share, for the 90 percent of the company it did not already own.
The FBI has also raised concerns in past multinational telecom deals, including the merger of the wireless assets of Bell Atlantic and Britain's Vodafone Airtouch, the report said.
Verio shares fell 1-3/16 to 54-11/16 in Thursday afternoon trading. 
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