Sirius-XM: One year later and still waiting

It's been a wild ride for shares of Sirius and XM since the two companies announced plans to merge a year ago.

NEW YORK (CNNMoney.com) -- Happy Presidents' Day! Since the U.S. markets are closed, businesses don't usually make big announcements on this holiday.

But last year, a doozy of a merger was announced while most traders were sleeping in - Sirius Satellite Radio (SIRI) and XM Satellite Radio (XMSR) unveiled plans to combine.

At the time, the two companies said they expected to complete the $13 billion merger of equals by the end of 2007, pending regulatory approval.

Flash forward to today. Although shareholders of both companies have approved the merger, the Department of Justice and Federal Communications Commission have yet to give their blessing.

The proposed merger has raised some antirust concerns since it would combine the only two satellite radio companies in the country.

And as the chart to the right shows, the stocks have been whipsawed by the uncertainty.

Though both stocks have rallied lately on renewed hopes that the transaction will soon get the green light, XM's stock is down 12% since the day after the deal was announced while shares Sirius have fallen 18%.

As readers of my old Media Biz blog will probably recall, I've followed the twists and turns in the satellite soap opera extensively.

Several analysts have been claiming since late November that approval of the deal is "imminent." But traders should probably give up trying to predict the outcome. I've checked with sources at the DOJ and FCC repeatedly in the past few months and have been told that both groups are taking their time looking at this deal since it is a little more complicated than your average antitrust review.

As I've written before, I think this deal should and will eventually be allowed by the government. Yes, it's hard to deny that a Sirius-XM combined entity isn't technically a monopoly in the truest sense of the word.

There are only two companies that offer satellite radio service in the U.S. If Sirius and XM merge, there will be only one.

Still, I agree with the two companies' argument that they don't simply compete with each other. A person driving in their car can choose to listen to free radio stations owned by the likes of CBS (CBS, Fortune 500) and Clear Channel Communications (CCU, Fortune 500) in addition to satellite channels.

People who own portable devices that pick up satellite radio signals could also choose to listen to music or news podcasts on gadgets such as Apple's (AAPL, Fortune 500) iPod or iPhone as well as Microsoft's (MSFT, Fortune 500) Zune.

If the DOJ and FCC choose to define the market as being much broader than just satellite radio, it's difficult to imagine why the deal should be shot down.

In addition, Sirius and XM have already satisfied one of FCC chairman Kevin Martin's key concerns by agreeing to offer consumers a so-called a la carte offering if the merger goes through - the ability to pick and choose programs instead of being forced to pay for a more expensive package that includes all channels.

Finally, it's worth pointing out that the free market could do a better job than the government of deciding whether the deal is harmful to consumers.

If Sirius and XM get approval and then quickly raise prices, many subscribers are likely to balk. Satellite radio is a luxury item, hardly a necessity. There is a big difference between this merger, and say, a merger of two phone companies, cable companies or electric utilities.

Ultimately, the success of failure of Sirius-XM should be left up to the American people to determine. So it's your move, DOJ and FCC. Still. Here's hoping you make a decision soon.

What do you think? Would a Sirius-XM combination be good news for consumers?