Deutsche Telekom owns to much T-Mobile USA?

The FCC is looking into whether Deutsche Telekom, the German telecom giant that owns T-Mobile USA, has too much of a controlling stake in the carrier and whether that violates U.S. regulations on foreign ownership. The FCC on Oct. 17 sent a letter to T-Mobile, which is owned by Deutsche Telekom AG, advising the company that regulators should have evaluated its 2001 acquisition by the German telephone giant under a 20% voting stock threshold. The merger was evaluated under a more lax standard.

The letter, obtained said, “T-Mobile USA’s level of foreign ownership through the existing ownership structure appears to be in violation” of the 20% limit.

The letter gives T-Mobile 30 days to reply about how it can be in compliance with the regulation. T-Mobile has not responded to the letter yet, but said that a simple restructuring could resolve the issue.T-Mobile officials said the FCC’s new thinking on foreign ownership could be complicated by a 1996 World Trade Organization telecommunications agreement that allows 100% indirect ownership of U.S. spectrum licensees by foreign entities. Deutsche Telekom has 100% indirect controlling interest in T-Mobile, according to the FCC.

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