While detailed terms of 3Com’s plans to go private have yet to be released, it has not stopped widespread speculation about what the deal, under which the new owners will be the Boston-based financial institution Bain Capital and the Chinese telecommunications manufacturing company Huawei Technologies, means for the industry. Some of that speculation has been inaccurate.

First, a little background. 3Com, a telecommunications network equipment manufacturing company, was a high-flying Silicon Valley company in the 1980s and 1990s, but in the past decade has suffered the fate of the mythical Icarus. While it has valuable contracts with both the federal government and private customers around the world, its business deals have failed to flourish.

Consider H3C, the joint venture 3Com established with Huawei a few years ago to market products in Asia and other parts of the world. Less than a year ago, 3Com purchased Huawei’s roughly 50% share of H3C for more than $800 million, thus valuing H3C at more than $1.6 billion. H3C has struggled this year, and while 3Com has many other assets, Bain and Huawei will now pay just a little more than $2.2 billion for the entire 3Com company.

The 3Com merger has attracted attention, some of it misleading. For example, the deal does not reflect a major victory for Huawei or a new beachhead for China in the world of manufacturing. 3Com, like many other companies in the industry, already does most of its manufacturing in China. The vast majority of the company’s employees are in China; so too are many, if not most, of its manufacturing customers. Those circumstances will not change as a result of the transaction.

The merger actually represents more of a victory for Bain than for Huawei. Huawei’s minority investment will likely mean that it will take greater interest in assuring the success of 3Com and H3C, much as it had before it sold its interest in H3C. That is a good result for Huawei — but it is an even better result for Bain, which will reportedly own 80% of 3Com.

Another misinterpretation holds that 3Com will be more nimble in the manufacturing domain merely because it will be a privately held company. 3Com will likely be well managed for a variety of reasons peculiar to itself and to Bain and Huawei. Like other successful large private equity groups, Bain manages it assets well. Huawei is also privately held.

But many publicly traded companies, such as Cisco, also appear to do quite well. It does not stand to reason that all publicly traded companies, or even those in the telecommunications equipment manufacturing industry, would perform better if privately held. A further misinterpretation of the 3Com deal is that the announced closing date, in the first quarter of 2008, will be the actual closing date. Companies usually announce success-oriented schedules. This one may slip not because of financial difficulties but because of federal governmental review under the new Foreign Investment and National Security Act of 2007, which recently replaced the Committee on Foreign Investment in the United States. The new law sets out a formal review process for certain types of foreign investments in America, investments that will almost certainly include this transaction.

Foreign influence on 3Com decision-making will not change much if the deal is approved. 3Com, like others in its industry, operates plants around the world, but particularly in China. The purchasers of their products are companies located around the world, and heavily in China.

3Com does sell much of its equipment and services to the federal government, and some to the military. The federal government, in its role as purchaser, will likely review the 3Com deal to the greatest extent, more so than as the protector of broader market interests. That federal review, in the shadow of a new law with no specific precedents for procedures, will pose the greatest threat of a delay to the transaction, and will most likely cause the deal to close after the first quarter.

A former FCC commissioner, Mr. Furchtgott-Roth is president of Furchtgott-Roth Economic Enterprises. He is organizing a seminar series at the Hudson Institute. He can be reached at hfr@furchtgott-roth.com.