Heritage Foundation senior analyst James Gattuso.

Gattuso recently expressed his frustration with the Department of Justice and its laggard pace in coming to a decision for the Sirius-XM merger, stating:

"...rumors of imminent action at DoJ have frequently made the rounds: the DoJ is going to approve the deal, the DoJ is going to reject the deal, the DoJ is going to attach conditions on the deal.

"I'm half-expecting to read that the DoJ's dog ate the files on the deal."

Well said James.

[TechNewsWorld, Photo courtesy of Drama Queen]

Thanks Gary!

A quick glimpse at the Merge-O-Meter shows that it has been 367 days since the Sirius-XM merger was announced.

And the Wall Street Journal Deal Journal Blogs has assembled together an interesting set of metrics that put the whole transaction into perspective.

What Deal Journal did was take a look at all the merger/acquisition activity (courtesy of FactSet MergerMetrics) since the Sirius-XM merger was announced, and they came up with a series of numbers. And since I'm a LOST fanboy, I figured I'd make those numbers look like the countdown clock... just because.

So here goes...

349: The number of announced definitive full acquisitions of US publicly traded companies, since the Sirius-XM announcement.

230: The number of those deals that were completed.

97: The number of those deals still pending.

22: The number of those deals that were withdrawn.

The American Antitrust Institute the other day asked the Department of Justice to file suit against the proposed merger of XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc.

AAI, which filed against the Sirius-XM merger back in June, holds strong to its assertion that the merger would "lessen competition, or to tend to create a monopoly," in violation of Section 7 of the Clayton Act.

As far as I can tell, the American Antitrust Institute holds absolutely no relationship to the NAB, or has any ulterior motives here. They are simply a nonprofit organization that advocates an aggressive stance toward antitrust enforcement.

Under AAI's definition, satellite radio stands alone in its relevant market:

"Although the merger parties posit many alternatives, including everything audio from AM/FM radio, to Internet radio, to MP3 players and iPods, none of these offer the unique nationwide coverage of satellite radio, content, features, and ability to aggregate demand. There is no evidence, as required under the Merger Guidelines, that any of the audio alternatives proposed for inclusion in the market definition by the merger parties constrain the ability of the merged firm to increase prices."

Oddly, I don't see any mention of mobile audio (streaming audio to cellphones) in their letter. Mobile audio, in my opinion, is the most direct form of competition if you want to define it as a "nationwide multichannel mobile audio entertainment subscription service" as the NAB calls it. And with companies like mSpot, who already have over 1 million subscribers (not to mention the backing of several terrestrial radio companies like ABC Radio, Clear Channel and others), it's hard to say that mobile audio is "burgeoning."

Still, of all the arguments against the merger, AAI has consistently given the best ones to support their views. I know I'm from the "pro-merger camp" and all, but I have to give AAI credit for stating their case better than most. It all boils down to how the relevant market is defined, and that ultimately, is up to regulators to decide.

[FMQB, Wired]

Here's an interesting video from CNBC featuring Rebecca Arbogast of Stifel Nicolaus & Co., Mark Cooper of the Consumer Federation of America, and Vince Farrell of Scotsman Capital Management.

Well worth the watch if you have an unhealthy obsession with following the merger.

Sadly, CNBC doesn't allow embedding of videos (because that would just lead to more people watching their ad-supported content, and we wouldn't want that) so go ahead and click the link below to watch the video.

[CNBC]

Aside from having some of the most entertaining photos in mainstream media, the New York Post also has a source "familiar with the situation" that has provided the publication with a status update at the DOJ.

According to this source, junior staffers were given a final chance to make their case against merger approval - known as "last rights" - to Antitrust Division Chief Thomas Barnett, before he signs off on the deal.

The results of these "last rights" are unknown - but this is fairly consistent with what the analyst community sources have been hearing for some time now.

In early November, Cowen & Company issued a report stating that the Antitrust Chief would approve the merger, "despite a staff recommendation against the deal."

A few weeks later, Bear Stearns wrote that junior staffers at the DOJ are recommending blocking the merger, but that higher officer deputy officials likely disagree and that Barnett will rule along with the higher officials in approval of the deal.

That was several months ago, and if the Post's sources are correct, then the DOJ's tune hasn't changed. Only time will tell for sure though.

[New York Post via Orbitcast Forums]
Thanks Squeaky!

Federal Communications Commission chairman Kevin Martin confirmed recently that the agency was coordinating efforts with the Department of Justice, but had yet to reach a final decision on the merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc.

Speaking informally at the NBA Tech Summit, Martin also said that while the Commission has received all the necessary information from the two satellite radio companies, they have yet to set a timeline in reaching a final decision.

According to paidContent:

"Traditionally the commission doesn't act on those after the Department of Justice --99 out of 100 times the Department of Justice goes first and the Department of Justice hasn't acted yet on that merger. We have some more information we requested at the beginning of the year from the companies so that we're trying to finalize our conclusions but we're coordinating with Department of Justice. I don't have a timeline."

Today marks the exact one-year anniversary since Sirius-XM merger was announced.

[paidContent]

The National Association of Broadcasters (NAB) fear that satellite radio may have "different needs and incentives for the use of terrestrial repeaters" as a result of the merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc.

One of the NAB's concerns is the "heightened desire to offer locally oriented programming, including local advertising" through the repeater network. So the NAB is asking the FCC to adopt final repeater rules that block Sirius-XM from offering local content on their repeater networks.

This isn't anything new.

Over a year ago, an NAB-backed bill (H.R. 983) was introduced to Congress, meant to "preserve local radio" and in effect would stop the airing of Amber Alerts and other emergency services on Sirius and XM. Somehow I don't see this as being in the public's interest.

In the its recent FCC filing, the NAB continues, "In adopting final rules for [satellite radio] repeaters, it is also necessary that the commission be mindful of the SDARS licensees' record of misbehavior in this area."

They go on to highlight violations regarding Sirius and XM repeater towers. Of course, this ignores terrestrial radio's own history of FCC violations.

Oh I get it: Do as I say, not as I do.

How about this instead. If regulators do feel that terrestrial radio is a substitute for satellite radio, and that they compete in the same relevant market, then satellite radio should be permitted to provide more - not less - localized programming. There is absolutely no need for an 80-year old government-granted monopoly over local programming to continue to exist in this day and age.

But that's exactly what the NAB wants. In their on-going attempt to save itself - rather than actually trying to innovate and provide a compelling product - they want to prohibit other local programming, and secure they're stranglehold on "localism." Now that's anticompetitive.

[via Radio Ink]

Goldman Sachs is joining the rising chorus of analysts who claim that the Department of Justice is nearing approval over the Sirius and XM merger.

On Tuesday, Stanford Group said the DOJ is "near a ruling" on the satellite radio merger. Then on the following day, Stifel Nicolaus issued a note stating "increasing chatter" surrounding the pending DOJ ruling.

Today, Goldman Sachs chimes in stating that channel checks indicate that it now appears "less likely that the DOJ will block the merger."

"Longer term, merged or unmerged, our outlook for satellite radio is cautious given our view of unrealistic cash flow expectations, and hence valuation risk," he said in a client note.

[AP, 24/7 Wall St via Orbitcast Forums]

Georgetown Partners continues to push hard in its efforts to have the FCC require that Sirius-XM hand over 20% of spectrum to the company, should the two satcasters merge.

Below is what Georgetown has been doing at the FCC, in only the past two-weeks:

• January 31st - Chester Davenport (pictured), Managing Director of Georgetown Partners, and other members representing the company met with several members of the FCC. [Link (PDF)]
• February 6th - Chester Davenport met with Commissioner Jonathan Adelstein and Rudy Brioché. [Link (PDF)]
• February 7th - Chester Davenport and the Rev. Jesse Jackson, met with Chairman Kevin Martin and Daniel Gonzalez.
• February 7th - On that same day, Chester Davenport and the Rev. Jesse Jackson, met with Commissioner Copps, Commissioner Adelstein, and Scott Deutchman. Then in a separate meeting, Davenport and Jackson met with Commissioner Deborah Taylor Tate and Amy Blankenship. [Link (PDF)]
• February 11th - David Rivkin, a Partner at Georgetown Partners, met with Commissioner Robert McDowell. [Link (PDF)]

Meanwhile, Georgetown also received some additional support from the National Caucus and Center on Black Aged, who filed with the FCC (PDF) to express their "concerns" over the merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc.

The NCBA on Black Aged subsequently provided their support to Georgetown Partners' plan, stating that it "squarely resolves the problems at the heart of this issue."

It can be argued that handing over a portion of Sirius-XM's broadcast infrastructure is in the "public interest" - but Georgetown Partners has absolutely no prior experience with satellite radio.

Then again, Georgetown Partners had no prior experience in telecommunications. But that didn't stop Davenport when he made a deal with GTE to buy half of Ameritech's wireless business back in 1999. [New York Times]