Dish uses national security ads to fight SoftBank deal

Dish Network Corp has rolled out an advertising campaign suggesting a deal by a Japanese company to acquire Sprint Nextel Corp could threaten U.S. national security, hoping to sway lawmakers and win support for its rival offer.

The campaign, which so far appears on the Internet and in Washington-area newspapers, is Dish's most public lobbying effort yet against Japan-based SoftBank Corp.

Dish has been pushing the national security angle hard in Washington. Since April, it has filed several documents raising alleged national security risks tied to SoftBank, while also promoting its own $25.5 billion bid for Sprint.

A full-page color ad ran on A5 of the Washington Post on Wednesday comparing SoftBank's proposed acquisition of Sprint to the 2006 Dubai Ports World controversy. In that case, legislators helped block a deal to buy several U.S. ports by stressing the national security concerns.

"In an ever advancing world, 'ports' may change," the newspaper ad says, "but keeping them in American hands never should. Don't outsource our national security."

The ad has a photo of shipping ports sitting above a photo of networking equipment. Dish's accompanying website, Nationalsecuritymatters.com, claims SoftBank spends "significant amounts with Chinese equipment manufacturers for its wireless network in Japan."

Dish also said on the website that China is the leading source of cybersecurity breaches. Dish's online ads link to that webpage, which was set up earlier this week.

In response, SoftBank says on its own website about the deal that it is "committed to using only network equipment that is acceptable to the U.S. government." SoftBank also made a pledge at the end of March that it would not use equipment from China's Huawei in Sprint's network.

WIDE FOCUS

Jeff Blum, Dish's Washington-based deputy general counsel, said the newspaper ads also appeared in Washington trade publications such as Politico, The Hill, Roll Call and the National Journal. Digital ads appear online in the National Journal and Politico, as well as news sites such as Reuters.com.

James Burger, an attorney who focuses on lobbying and policy at Thompson & Coburn in Washington, is skeptical the ads will be effective, especially because Japan is a U.S. ally and not viewed as a threat.

"I'm not convinced that the ads will convince the decision makers," he said.

Burger, who lobbied for Apple in the 1990s, but does not do work for SoftBank, Sprint or Dish, added that the ads will fall on deaf ears if SoftBank follows its pledge to use no Chinese equipment in its U.S. network.

"It seems to me that Dish is harping on the China bashing," he said. "But if SoftBank swears not use Chinese equipment, I wonder how well this will work."

Yet Dish has said its lobbying effort in Washington appears to be working. At a congressional cybersecurity hearing on Tuesday, the SoftBank deal made its way into the debate.

When asked by Virginia Representative Morgan Griffith if he had concerns about the deal, Mike McConnell, former director of national intelligence, said he would not be in favor of a U.S. communications company controlled by a foreign entity.

The ad campaign comes one day after SoftBank said it would grant a waiver to Sprint to allow it to consider Dish's bid.

On Tuesday, Sprint said its recommendation in favor of the SoftBank agreement had not changed. But some major Sprint shareholders, including Paulson & Co and Omega Advisors, have said the Dish offer looks better than SoftBank's deal.

(Reporting By Liana B. Baker. Additional reporting by Alina Selyukh in Washington. Editing by Andre Grenon)