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With France's Iliad, T-Mobile US takeover skips regulatory hurdles

WASHINGTON, July 31 (Reuters) - French telecommunications company Iliad's surprise bid for U.S. wireless carrier T-Mobile US Inc would face a far easier U.S. review process than the offer long expected from Sprint Corp, experts said.

Iliad's bid, revealed on Thursday, comes as Sprint's Japanese parent SoftBank Corp and T-Mobile owner Deutsche Telekom AG had already agreed to broad parameters of a deal, which was unlikely to be announced until September, sources have told Reuters.

But the potential tie-up of Sprint and T-Mobile, No. 3 and No. 4 U.S. carriers, had been expected to hit tough regulatory headwinds that the Iliad bid would not face.

"I suspect this (Iliad) deal would get through Washington much easier than the Sprint deal. I don't see any real red flags that would complicate it," said Paul Gallant, an analyst at Guggenheim Securities in Washington.

"There don't appear to be any competition issues the way there would be with a Sprint deal. That's the biggest different and that's significant," Gallant said.

U.S. regulators have been unusually public about their skepticism of a merger of Sprint and T-Mobile US.

Bill Baer, the assistant attorney general for antitrust, told the New York Times in January that it would be hard to convince him that going from four to three top carriers would benefit consumers. In 2011 the Justice Department stopped a bid by AT&T Inc, No. 2 in the market, to buy T-Mobile.

Federal Communications Commission Chairman Tom Wheeler also expressed skepticism about a Sprint/T-Mobile deal to SoftBank CEO Masayoshi Son, an FCC source told Reuters in February.

If Iliad wins a bidding war with SoftBank, the deal would be reviewed by the FCC, which decides if telecom deals are in the public interest; and the Justice Department, which is the antitrust enforcer. It would also need approval from the inter-agency Committee on Foreign Investment in the United States, or CFIUS, which examines deals with foreign companies for potential national security threats.

"The FCC and the Department of Justice have been extremely eager to not review a Sprint/T-Mobile merger, and they would be so happy if they could look at a proposed Iliad deal instead," former Democratic FCC Chairman Reed Hundt said.

"There's no question to me that the FCC would say 'bienvenue' (welcome)."

Iliad, with no U.S. holdings, would likely face a much lower hurdle with antitrust authorities.

"Something like that (the Iliad deal) would be better because it wouldn't result in a loss of competition," said John Bergmeyer of the consumer group Public Knowledge.

The deal could have a rougher time at CFIUS, however, given the telecom industry's critical role in U.S. security. A CFIUS expert, who asked not to be named, said that France is known to have active intelligence gathering in the United States, which would complicate the review.

"It's not a slam dunk," said the expert. "It doesn't mean the deal gets killed or anything like that but it means it gets a close look."

A second CFIUS expert, Jim Lewis of the Center for Strategic and International Studies think tank agreed: "There will be a lot of steps to go through and a lot of different hurdles that the company would have to face even if they actually manage to win the bid. Not easy but not impossible."

(Reporting by Alina Selyukh, Diane Bartz and Marina Lopes, editing by Ros Krasny and Richard Chang)