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OrderPresidential OrderG.W. Bush · R Quiet signal

Presidential Order

Regarding the Proposed Merger of Alcatel and Lucnet Technologies, Inc.

President George W. Bush conditionally approved the proposed merger of French Alcatel and U.S. Lucent Technologies by requiring execution of a National Security Agreement and Special Security Agreement with multiple federal departments, prohibiting the merger if these conditions are not met. The order cites national security concerns under Section 721 of the Defense Production Act of 1950 and authorizes the Attorney General to enforce compliance.

Federal Register Open PDF 71 FR 67429

Impact dates

  1. National Security Agreement execution by closing date of transaction

  2. Secure Subsidiary execution of NSA and SSA (date determined by Secretary of Defense)

  3. Special Security Agreement execution (date determined by Secretary of Defense)

Key directives

  • Condition merger approval on execution of National Security Agreement with DOD, DOJ, Commerce, and DHS by closing date
  • Condition merger approval on execution of Special Security Agreement with DOD by date determined by Secretary of Defense
  • Require Secure Subsidiary to execute both NSA and SSA by date determined by Secretary of Defense
  • Authorize Attorney General to enforce order
  • Reserve presidential authority to issue further orders until conditions satisfied or merger prohibited

Who is ordered

Timeline

Immediate

  • Merger prohibited unless conditions met
  • Attorney General authorized to enforce

Near term (90d)

  • Execution of National Security Agreement by closing date
  • Execution of Special Security Agreement by date set by Secretary of Defense

Long term

  • Ongoing national security oversight through reserved presidential authority
  • Structural operation of Secure Subsidiary under SSA

Risks & tensions

  • Foreign control of U.S. telecom infrastructure with classified government contracts
  • Ambiguous timeline: 'closing date' and Secretary of Defense-determined dates create enforcement uncertainty
  • Draft agreements as of November 6, 2006 serve as binding template, limiting negotiation flexibility
  • Reserved presidential authority creates lingering regulatory overhang
Presidential Order: Regarding the Proposed Merger of Alcatel and Lucnet Technologies, Inc. · Executive Orders