FCC Chairman Kevin Martin appeared on CNBC’s “Squawk Box” this morning to explain the holdup in his agency on the proposed merger of Sirius Satellite Radio (SIRI) and XM Satellite Radio (XMSR).
What, exactly, has taken 16 months for the commission to analyse? A rule that was supposed to prevent the two desperate companies from ever merging in the first place.
Mark Haines: WHERE DO WE STAND ON XM?
Kevin Martin: IT’S A DIFFICULT ISSUE FOR THE COMMISSION. WE HAD A RULE IN PLACE THAT WOULD SAY THE TWO COMPANIES COULDN’T MERGE WHEN WE AUCTIONED OFF THAT SPECTRUM. THEY HAVE COME IN AND ASKED FOR US TO CHANGE THAT RULE AND PUT FORTH DIFFERENT SEVERAL PUBLIC INTEREST COMMITMENTS THEY WOULD BE WILLING TO MAKE AND CONSUMERS CAN PICK AND CHOOSE CHANNELS THEY WOULD WANT TO HELP LOWER THEIR PRICES. WE’RE LOOKING AT THAT. I THINK THE COMMISSION WILL DO SOMETHING ON IT SOON.
David Faber: AREN’T YOU UNDER SOME OBLIGATION HERE TO FINALLY GIVE — IT’S BEEN A YEAR AND A HALF. HOW IS IT POSSIBLE IT CAN BE SO LONG TO REVIEW A POTENTIAL DEAL AND AREN’T YOU UNDER AN OBLIGATION TO ANSWER THESE GUYS IF NOT TODAY, TOMORROW, OR VERY SOON?
Martin: I THINK WE ARE UNDER AN OBLIGATION BUT THIS IS AN UNUSUAL CIRCUMSTANCE. WE HAVE A RULE THAT PROHIBITS THIS MERGER. 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 THAT THEY’RE ASKING FOR SOMETHING EXTRAORDINARY AND THE COMMISSION IS TAKING A LOOK AT IT. WE’LL GET BACK TO THEM SOON.
Valid, but it shouldn’t take this long. It’s obvious the satellite radio industry is not a stellar one, with growth slowing and external competition heating up. Meanwhile, both companies continue to burn cash. The FCC’s glacial pace is nothing short of reprehensible.