XM and Sirius announced today that they are extending their deal to merge yet again, as the regulatory wheels continute to roll exceedingly slow at the FCC.
The current deal between the satellite radio companies had a trigger to unwind as of May 1 absent regulatory approval. While the Justice Department has said it has no antitrust concerns about the merger sufficient to warrant blocking it or putting conditions on it, the FCC has not made its call and looks like it won’t for a while.
The commission has to take into account public interest considerations that extend beyond competition issues, and it may well have to dicker among itselves over what conditions to put on the merger it if decides to let it through. But teh commission has had over ten months to review the deal, and FCC Chairman Kevin Martin had been shooting for a decision by the end of March. That shot missed the mark and he recently told reporters he had no new updates on a timetable.
An FCC source who ought to know said Wednesday that the commissioners have yet even to receive a draft of FCC Chairman Kevin Martin’s proposal, after which there will likely be negotiation, meaning a decision was not coming before the May 1 trigger and likely not for at least days, or perhaps weeks (or months, or…).
Currently, the FCC has been considering the deal for 326 days. It has an informal shot clock of 180 days, but has frequently missed that mark by quite a bit (400 days for the Clear Channel deal, 404 days for the breakup of Adelphia).
Meanwhile, XM and Sirius have had to extend their agreement yet again. Initially, they had a March 1 trigger to unwind the deal if regulators had not made a call by then, but when neither the FCC nor Justice could get it together after months of review, they pushed the date to May 1, and will be pushing it again. This time it is for only two weeks, but, pragmatists that they are, they decided to agree on an automatic two-week rolling renewal. At last something is rolling.
The FCC is turning its 180 day shot clock into a joke, having gone to the trouble of establishing a goal of reviewing mergers withing 180 says (a mistake if was going to miss by so much) and even creating an online timeline so folks like me can note stuff like this.
It is hard for these companies to draw up business plans and keep investors on the reservation when there is so much regulatory uncertainty.