FCC decision on XM-Sirius merger coming soon

After 16 months of evaluating the merger between XM Satellite Radio and Sirius Satellite Radio, FCC chairman says a decision will be announced soon.

Federal Communications Commission Chairman Kevin Martin said Thursday he expects the agency to make a decision soon about the Sirius Satellite Radio merger with rival XM Satellite Radio.

Martin said during an interview on CNBC's Squawk on the Street Thursday that he expected the commission to "do something soon." But he defended the long review process by saying that the deal was "extraordinary" and raised difficult issues. Specifically, he said the FCC already had a rule in place that prohibited the merger of the two satellite radio companies.

Originally, the agency barred satellite radio companies from combining. But the rule could be changed, especially as satellite radio faces more competition from Internet music services, music playing phones, and online music stores like Apple's iTunes that allow people to play music on iPods.

Martin acknowledged that the two companies had made pricing concessions in order to get the deal approved by regulators. In March, the Justice Department concluded that the deal would not "substantially lessen competition ."

The FCC is the final regulatory hurdle the companies need to move the merger forward. The deal, which was valued at $13 billion in February 2007 when it was announced, was approved by XM and Sirius shareholders last December .

Martin had indicated at the end of March that the agency was inching closer to a decision on whether the deal passes muster. But two months later, the FCC still hasn't announced a decision.

Meanwhile, XM and Sirius have been burning cash as competition from online video and music sites has grown over the past year and a half. Critics wonder what's taking the agency so long to decide. When asked during the CNBC interview if the commission was under an obligation to make its decision sooner rather than later, Martin had this to say:

"I think we are under an obligation, but this is an unusual circumstance...This was unlike any other merger that's come in front of us. We have a rule that would prohibit it from going forward. I think they're asking for something extraordinary, and the commission is taking a look at it. We'll get back to them soon."

 

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