XM-Sirius Deal Still Crawling Along

Karmazin has been adamant in his belief that the situation is not as complicated as it seems, and that the deal can close immediately after getting the green light from the FCC.

"At the very least, the FCC has to approve the transfer of licenses," says Adam Candeub, an associate assistant professor of law at Michigan State University College of Law. Candeub previously held the position of attorney-advisor for the FCC in its media bureau. "Satellite broadcast is not the favorite child of the FCC. Satellite is somewhat disruptive to a lot of vested interests in Washington, D.C."

Candeub says a formal decision from the FCC will have to wait until the commission gathers for a vote. The agency met met Wednesday, although the agenda didn't list a discussion on the XM-Sirius merger. Despite Sirius's assertion a decision will be reached by the end of the month, there is a possibility that an FCC approval could slip until the following meeting on April 10 unless a special meeting is called.

"The FCC could hold a special meeting at any time," says Janco Partners analyst April Horace. "Most merger-related issues are held at special meetings. Sirius remains very confident they'll get a decision by the end of the month. FCC Chairman [Kevin] Martin has said he wanted a decision made by the end of the first quarter, and we're quickly approaching that deadline."

Candeub agrees that the FCC may be ready to relent. "It seems that the FCC is shifting its gears," he says. "They finally might be in the generic wave-it-on-through mode."

Sirius firmly believes it has put forth a compelling argument for the merger, but Janco's Horace says that the key term "a la carte" may be what ultimately sways the FCC to approve the deal. That is, a combined Sirius-XM entity would offer a variety of service combinations to its customers as opposed to one single programming option.

"[FCC Chairman] Martin is very much an advocate of a la carte, specifically as it relates to cable and content operators, for quite some time," she says. "Sirius and XM have really capitalized on that notion. They're willing to do whatever it takes to get the merger done."

RBC's Bank agrees that the willingness of the two satellite radio operators to offer a la carte is a crucial factor.

"It gives Chairman Martin something he could use as a bargaining chip, especially on the cable side," says Bank. "It's a pet issue for him. If you're a believer that the FCC ultimately gets over the hurdle, that's a key reason why that's likely."