XM/Sirius Satellite Radio: FCC Continues to Delay Process

Yet another week has passed in the XM Satellite Radio (XMSR) - Sirius Satellite Radio (SIRI) merger without the FCC starting its informal review 'clock' or establishing the first pleading cycle for its review of this transaction. This continues to be an indication of a very long and volatile review process with the FCC, given that a delay from application filing to review start rarely takes this long.

Ex parte filings continues to come into the FCC at a rapid pace. The companies have issued their first defense of the license transfer request in responding to the WCS Coalition opposition to the merger. This promises to be the first of many responses the companies will need to generate in defense of the transaction.

Of interest within the most recent filings is a Bloomberg report, filed by the NAB, which points out XM's violation of antenna rules set by the FCC. Similarly, Massachusetts Congressman Ed Markey has stated that the violations should be considered by the FCC in the review as well, which is the first time in the FCC review that a public figure has stressed this sort of issue in relationship to the merger. These are only significant developments in that opponents are certain to continually point to the companies' past violations in order to show the regulator that it will not act in good faith if the deal is approved under certain conditions.

In short, the FCC process is becoming very complex, as expected, even before the actual review has started. To say the companies have an uphill battle would be an understatement at this point and the opposition promises only to intensify over the next few months. Presumably, the FCC formal review process will begin at some point this month, creating a target decision date in a September/October time frame. Naturally, this could easily be pushed back several months if and when the review 'clock' is stopped.

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