Previous version incorrectly said that the public interest group Free Press supports conditions on the merger. Free Press has opposed the merger, even with conditions.
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Justice Dept. Approves XM-Sirius Radio Merger
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"The FCC has never, to our knowledge, rejected a merger approved by the DOJ. We don't believe this one is likely to be the first," Blair Levin, an analyst with Stifel Nicolaus, wrote in a note to investors.
Attorneys for Sirius echoed that idea.
"The FCC standard [of review] is in many ways similar," said Kevin Arquit, Sirius's lead outside counsel. "The agency looks at whether a transaction is in the 'public interest,' and that has largely been an analysis of competition."
Public interest groups, including Public Knowledge and Free Press, have urged the FCC to impose restrictions on the merger, such as capping the prices companies can charge customers.
Consumers Union legal counsel Christopher Murray said the merger would be a monopoly, which could raise prices and force subscribers to listen to more advertisements.
"People love these services because they're mostly free of advertising," Murray said. "But when you take away competitive pressure, it seems like the result for consumers may be a significant increase in the amount of advertising customers will have to hear."
James Goss, media and entertainment analyst at Barrington Research, said he expects the company's marketing efforts to become more focused so that consumers may hear fewer ads.
If consummated, the merger will unite the firms' roughly 14 million subscribers, most of whom currently pay $12.95 a month for the service. Much of XM and Sirius's growth is from in-car radio systems.
Combined, the companies could save money and pass along some of those savings to consumers, XM and Sirius executives have said. The merger could also broaden offerings, allowing users of each service to get new channels from the other. The companies also argue that consumers have so many options, there would not be an incentive to raise prices.
This summer they announced an "a la carte" pricing system that would cut rates to as low as $6.99 a month for 50 channels and allow consumers to pay on a per-channel basis for any additions. Under that kind of tiered pricing system, XM customers could, in theory, receive some Sirius offerings, such as Howard Stern, while Sirius customers could partake in XM's coverage of Major League Baseball.
FCC Chairman Kevin J. Martin has signaled that he thinks an a la carte plan would benefit consumers.
Wall Street welcomed the approval: Shares of XM closed up 15.5 percent at $13.79. Sirius shares rose 8.6 percent, closing at $3.15.
Staff writer Cecilia Kang contributed to this report.
