Foreign-held telecomm companies excluded from NSA surveillance sweep

Two phone companies, T-Mobile USA and Verizon Wireless, are shielded from the National Security Agency's data collection program surveillance sweep.

According to people familiar with the NSA program, these two companies are excluded from surveillance partly because of their ties to foreign countries: 74 percent of T-Mobile belongs to German firm Deutsche Telekom AG and 45 percent of Verizon is owned by the U.K.'s Vodafone Group PLC.

The Wall Street Journal hypothesizes that the T-Mobile and Verizon could be exempt from the program because of legal, practical and political problems, but U.S. officials say it's more likely due to their overseas ties. Court orders authorized by the Foreign Intelligence Surveillance Act are required for governmental requests for access to data - these orders, however, are classified ‘noforn' (short for ‘no foreign'). This would limit the ability of all company owners of T-Mobile and Verizon to be made aware of the NSA's program. Exclusion of the two companies highlights the partnership between the U.S. intelligence world and the U.S. telecom industry.

Even so, U.S. officials say that the inability to pull data directly from T-Mobile and Verizon doesn't leave a gaping hole in their intelligence. They estimate that they can gather information on 99 percent of phone traffic nationwide because almost all calls made in the States travel over U.S.-owned networks at some point during the call.

U.S.-owned companies AT&T Inc. and Sprint Nextel Corp. both carry out classified work for the government, so when a call is placed on a T-Mobile or Verizon phone and it travels through either of the former networks (as is often the case), information can be recorded and shared with the NSA.

Despite that, exclusion of companies with foreign ties could cause problems in the future, as overseas investors continue to play an important role in telecom infrastructure in the U.S. SoftBank Corp, a Japanese telecom company, is working on an acquisition of Sprint by this July. It will likely create a separate U.S. branch in order to participate in ongoing U.S. classified activities.

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