It's been 70 days since Sirius-XM filed with federal regulators, and yet the merger hasn't even passed the preliminary review process. The FCC has yet to start its 180-day merger-review clock, and that smells like trouble for many.

"This constitutes the longest application-to-clock delay in FCC history," David Trout of M&A Researcher says in a report Wednesday. "There is simply no way to view the delay in a positive light."

And the delay seems to indicate that a decision won't arrive until sometime in 2008. That's cutting it close to election time, when political attention is far more focused elsewhere.

"It seems relatively safe to assume that the intervention -- in the form of face-to-face meetings -- of several politicians and organizations represented by former politicians is slowing the preliminary review process," Trout continued.

This chart illustrates how long this merger review process is taking, when compared to other major mergers:

"Each passing day without the FCC's pleading cycle and review clock being initiated threatens [hopes for] an FCC decision before the end of 2007," Trout writes.

[via TheStreet]

The League of Rural Voters today announced their support for the Sirius-XM merger, joining with several other organizations who have recently publicly supported the merger.

It's an interesting addition to the roster of supporters, because while the prior organizations addressed the FCC's concerns on ethnic diversity in the media - this directly addresses concerns of adequate competition in rural areas.

The League of Rural Voters said the combined entity would offer listeners in rural communities more content options at lower prices than what is currently available from Sirius and XM separately.

"In many rural areas throughout America, commercial radio reception can be extremely limited. Satellite radio has offered listeners in rural areas a robust alternative with hundreds of specialized channels that meet the programing needs of rural America," said Niel Ritchie, the League’s Executive Director. The organization also pointed to rural listeners who depend on satellite radio’s emergency and public safety stations, while terrestrial radio's corporate consolidation has created so-called "local news and weather" service which are actually delivered from offices hundreds of miles away.

One of the key reasons why the DirecTV-EchoStar merger wasn't approved by the FCC was because it was felt that rural communities (areas where an over-the-air TV signal isn't available) would lose out in competitive choices.

It seems that the League of Rural Voters is seeing that the merger would be more of a "standardization" of the satellite radio medium - opening up the exclusive content from both providers under a single subscription.

The largest and oldest Latino organization in the U.S., the League of United Latin American Citizens (LULAC), has publicly affirmed their support for the merger of Sirius and XM.

"This is obviously important to LULAC, and this is likely to provide both Hispanic programmers and consumers with opportunities and choices," said Rosa Rosales, LULAC National President. "More programming means that the ever diverse American consuming public can look to Satellite radio for news and entertainment."

Several channels are cited as being important to the Hispanic American population, including ESPN Deportes, CNN Espanol, and several Latin music channels.

"More programming means more jobs -- from the on-talent to production crews. And more programming means that the ever creative and entrepreneurial American spirit has yet one more potential outlet and distribution channel," said Brent Wilkes, LULAC Executive Director.

Interestingly, in most cases, LULAC said they would support the maintenance of competition in a relevant market - but this merger is different. In this case there are "considerable benefits from the proposed merger" that they say outweighs any countervailing concerns.

There's an obvious media blitz of minority groups coming out in support of the merger.

While the NAB continues to beat their repetitious drum, it seems that the team on Sirius-XM's side is addressing the FCC's concerns of diversity in media. With minorities now representing nearly 1/3 of the U.S. population, it's a legitimate purpose, and one that can be directly attributed to serving the "public interest."

The NAB yesterday sent a letter to the FCC in response to XM and Sirius' request to deny the NAB's FOIA (Freedom of Information Act) request for information related to FM modulators and terrestrial repeater compliance.

In the letter, the NAB says they would like the records made public so that they may evaluate Sirius and XM's "character qualifications."

The NAB also wants to determine "whether the companies can be relied upon in the future to comply with FCC rules or with any conditions imposed or offered as part of the merger."

How noble.

[Read the full letter (PDF) via FMQB]

Congressman Mike Doyle (R-Pa.), who is also a member of the House Energy & Commerce Committee, has recently written the FCC and the Justice Department, opposing the Sirius-XM merger.

Doyle said he was worried the merger would reduce the "diversity of artists" on the services. An odd assumption especially considering that both The Latino Coalition and the National Black Chamber of Commerce have come out in favor of the merger.

Mike Doyle also said that the resulting company would be a monopoly in the satellite radio market, and he complained that the two companies had not produced an interoperable receiver. Statements that seemingly echo the NAB's stance on the merger.

How coincidental, because it turns out that the NAB's Political Action Committee is one of Congressman Doyle's top campaign contributors.

But the connection between Mike Doyle and the NAB doesn't end there.

As it turns out, just over a year ago, the NAB hired Mike Mullen - and Mullen served as a senior legislative assistant for Congressman Doyle since March 2004. Mullen was responsible for all telecommunications, technology, consumer protection and health care issues before the House Committee on Energy and Commerce.

Mullen incidentally is the NAB's Director of Government Relations now.

[Broadcasting & Cable] 

It seems that everytime a lawmaker comes out in opposition of the Sirius-XM merger, they have some level of financial motivation. First there was Arizona's Mike Hubbard, who ended up owning his own radio station, and now it turns out that Senator Herb Kohl has his own financial stake in a terrestrial radio endeavor.

See, Senator Kohl owns the Milwaukee Bucks - here's the public disclosure (PDF). Now normally that's all fine and dandy.

But it turns out that the Milwaukee Bucks have worked out a deal with WTMJ-AM (620) to sell advertising for when their games air.

Previously the Bucks and WTMJ shared that revenue, but with the 2007-2008 season, the Milwaukee Bucks will assume full responsibility for all their broadcast advertising sales.

In short, Senator Kohl directly earns revenue from Bucks broadcasts on WTMJ.

Connect the dots.

Sirius is the exclusive satellite radio broadcaster of the NBA. If XM and Sirius merge, then XM's 8 million subscribers can have access to these NBA games. And a this could put the amount of revenue that Senator Kohl and his company can generate, at risk.

Conflict of interest? You tell me.

[via Yahoo! Finance Sirius message board]
Thanks Brandon!

George Nethercutt, a former Republican congressman from Washington, is among those registered to lobby on behalf of the NAB. Bluewater Strategies actually originates from the firm Lundquist, Nethercutt & Griles - with Andrew Lundquist, Eric Washburn and Tim Kurth running the show.

Decade-long buddies, both Lundquist and Washburn formed Bluewater Strategies after one of the firm's former founders, J. Steven Griles, was notified by the DOJ that he would be charged with giving false testimony. Griles eventually pleaded guilty to obstruction of justice charges. So in turn, Bluewater was formed (the name is attributed to Washburn's love for sailing).

Under a 1995 federal law, lobbyists are required to disclose activities that could influence members of the executive and legislative branches. They must register with Congress within 45 days of being hired or engaging in lobbying.

[Forbes] 

At this morning's shareholder meeting, Sirius CEO Mel Karmazin said that their merger is XM is an merger is an "uphill battle," though he continues to believe that it will be approved by regulators.

Karmazin also acknowledged that Wall Street estimates there is an "80 percent likelihood that the merger is not going to happen." In a generalized response to Senator Kohl's comments denouncing the merger, Karmazin said, "There are some people out there that think that any combination [merger] is bad."

He also noted that "the NAB is a very powerful lobbying organization and we are a relatively small company. We are fighting a very well-oiled lobbying organization in the NAB."

"Why are they hiring John Ashcroft and hiring all these advisors? It’s simple... because we do compete with them. They believe that if we combined, our company would be better, it would be stronger," Karmazin added.

When asked about the prospects of the company should the merger not be approved, Mel said, "Our business model is very much on track. I believe not only are we going to not be out of business, we’ll be a very successful profitable company down the road."

It's good to see Mel taking a somewhat "realistic" (for lack of a better term) approach to the merger prospects. To ignore the cynicism over the deal doesn't instill anymore confidence than if he acknowledges it. People expect management to remain positive over regulatory approval, but also don't want everything to be sugar coated. Mel does this well.

[TWICE] 

Senator Herb Kohl (D-Wis.) recently sent a letter to the Justice Department and the FCC calling on regulators to oppose the Sirius-XM deal.

Kohl's opposition of the merger is not necessarily new, but being the chairman of the Senate's Subcommittee on Antitrust, Competition Policy and Consumer Rights, it does hold some weight. He is in fact the first chairman of the four Congressional panels that held hearings on the merger (Sen. Kohl's subcommittee held the hearing back in late March) to come out against it publicly.

Senator Kohl takes the position that satellite radio is in fact it's own confined market, and not part of an overall audio entertainment marketplace.

He also didn't buy the argument that future technologies threaten the stance of the satellite radio market, writing that "no other technology available today is a substitute for the satellite radio."

"Our concern is the marketplace today. Consumers should not suffer the price increases likely to result from a merger to monopoly because of a vague hope that new technologies may deliver new competitive alternative sometime in the future," he continued.

The problem with Senator Kohl's conclusion is that, if in fact satellite radio is defined as it's own finite market, then this definition opens up either Sirius or XM for takeover by a terrestrial radio corporation (such as CBS Radio) without fear of anti-trust issues.

And that is scary.

[Reuters & Wall Street Journal] 

The Latino Coalition (TLC) has publically come out in support of the Sirius-XM merger and has urged the FCC to approve the satellite radio marriage.

"For far too long, the Latino market has been ignored by traditional radio companies," said TLC President Robert G. de Posada. "Hispanics must turn to alternative sources like satellite radio for Spanish-language news, sports, music and diverse cultural programming."

The satellite radio industry has long been a launching pad for Hispanic programmers and is an increasingly popular service for a vast numbers of Latino consumers as well as other listeners. The TLC feels that for programmers, the elimination of duplicate programming and the resulting expanded channel capacity will provide new opportunities for Hispanics.

"As a strong advocate for the diverse needs of the Latino community, we are always supportive of measures that will bring variety and expanded options to our community. In our judgment, the XM/Sirius merger will accomplish just that by bringing more programming opportunities for Hispanic Americans and millions of other listeners," added de Posada.

The Latino Coalition is a non-profit, non-partisan organization based in Washington, D.C.

Only two days ago, the National Black Chamber of Commerce came out in support of the Sirius-XM merger. This level of support from minority organizations could weigh heavily in the eyes of the FCC, especially when the issue of diversity in media is being criticized lately.