The U.S. Justice Department approved the merger between satellite radio companies Sirius and XM Monday, more than a year after the two companies first announced their deal.

But for fans of Howard Stern, Opie & Anthony and other Sirius and XM on-air personalities, there are still many questions about how much a combined Sirius-XM service will cost and what programs they’ll be able to hear. Plus, Sirius and XM face one more regulatory hurdle before the deal can officially be completed.

In its decision, the Department of Justice determined that an XM-Sirius merger was not anti-competitive. The Justice Department argued that other media companies such as Clear Channel (CCU, Fortune 500), CBS (CBS, Fortune 500), or even Apple (AAPL, Fortune 500) with its iTunes software and iPod music player served as alternate options for music and media customers.

The Department of Justice did not place any conditions on the merger.

“Since we determined that there was no competition between the companies, we did not need to set any conditions as such,” said Assistant Attorney General Thomas Barnett during a conference call with reporters Monday afternoon.

But the Federal Communications Commission must also approve the deal. The FCC has yet to make a decision on the merger and it could decide to place conditions on the deal. A spokesperson for the FCC was not immediately available for comment.

Since Sirius and XM are still awaiting approval from the FCC, it is unclear exactly what a merger would mean for consumers. Both companies charge their customers a $12.95 per month subscription fee for their most basic packages. Some have feared that if Sirius and XM are allowed to merge, the two companies would raise the monthly price.

However, the companies said last year that they would be willing to offer a so-called “a la carte” price plan where consumers could pick certain packages for less money.

The merger would combine the nation’s only two satellite radio companies and create a company with about 14 million subscribers. It would bring together Sirius’ most well-known content, including shock jock Stern and National Football League games with XM’s Major League Baseball as well as programming from Oprah Winfrey.

Currently, subscribers for either Sirius or XM can only receive broadcasts from one of the two services with their satellite radios. But in a statement Monday, XM reiterated that radios owned by its current subscribers would not need to be replaced in order to continue receiving programming.

Shares of XM (XMSR) and Sirius (SIRI) both rose after the announcement.

Losses are narrower-than-expected loss on Thursday as it added more than 1 million subscribers during the quarter that included the holiday season.

But the results failed to excite investors who have been waiting more than a year for regulators to approve XM’s plan to be acquired by rival Sirius Satellite Radio Inc (SIRI.O: Quote, Profile, Research). The proposed deal was first announced in February 2007.

XM reported a fourth-quarter loss of $238.8 million, or 78 cents a share, compared with a loss of $263.2 million, or 90 cents a share, a year earlier.

The loss includes 25 cents a share in merger and settlement related charges, XM said. Excluding those charges, its loss was 53 cents a share, better than the average analyst expectation of 63 cents a share, according to Reuters Estimates.

U.S. regulators have yet to decide whether to approve the XM-Sirius deal. They include the Federal Communications Commission as well as the Department of Justice, which will decide if combining the two U.S. satellite radio companies would be anti-competitive, as some critics have charged.

Analysts’ opinions about the potential success of the deal have been mixed. Several have recently said they are now more optimistic, while other remain skeptical.

“Since the one-year anniversary of the deal has passed with no word from the DOJ, risk continues to exist that the deal will not happen,” Barrington Research analyst James Goss said in a client note earlier this week.

On a conference call with analysts, XM Chief Executive Nate Davis said the company does “continue to look forward to a positive resolution to this matter soon.”

The return of the controversial Star to the air Tuesday on WNYZ (87.7 FM, Pulse-87) proves again that radio will eventually welcome back almost any exile it thinks can still draw listeners and make money.

But radio also hasn’t been afraid to get rid of people who can do that - Star, Imus, Bob Grant, Opie & Anthony - if they say something perceived as offensive.

In the long term, says one critic, this cycle could last until “corporations that own media live up to their own standards.”

John Liu, a city councilman from Queens, lit into Clear Channel after the company fired Star in May 2006 for rude remarks on Clear Channel’s WWPR.

Earlier, in January 2005, Liu had blasted Emmis over WQHT’s infamous “Tsunami Song.”

While Liu criticized the hosts in each case, he said yesterday the core issue remains “corporate responsibility.

“No one pickets Howard Stern, because he says up front he’s going to insult and offend people. But Clear Channel promotes itself as a fair-minded company that aims to serve families and the community.”

Ironically, Liu and Star are on the same page here. In a pending lawsuit against Clear Channel, Star contends he was told to do the things for which he was fired.

“Star has some personal responsibility,” said Liu. “But he was acting at the behest of the company. This is not about censorship. It’s about companies being held accountable for doing what they say.”

And have recent firings and sanctions, which many folks in media think have cast a deep shadow of uncertainty over on-air content, cleaned things up?

“We’re not in the clear,” said Liu. “But hopefully we’re addressing the issue.”

Controversial morning host Star returned to radio Tuesday a lot more quietly than he left it in May 2006.

In his first day on WNYZ (87.7 FM, Pulse 87), Star talked less about his noisy firing from WWPR (105.1 FM) than about a recent liver transplant and other major surgery that left him 62 pounds lighter and restricted to a diet heavy on baby food.

“I don’t feel a need to discuss events of the past,” said Star (Troi Torain), who was fired after he made crude remarks about the young daughter of DJ Envy, a member of the morning team on rival station WQHT (97.1 FM).

Star was later arrested and did three days of community service. He has said his comments were taken out of context and were just a random shot in a manufactured “radio war” his bosses at Power’s parent Clear Channel encouraged him to escalate.

He said Tuesday, “There’s no bitterness, there are no scores to settle.” But he has a suit pending against Clear Channel, charging he was fired for doing what he was told, and he promised listeners yesterday that “I will tell you all about [the suit] someday.”

Otherwise, he only did a little mild and familiar sniping at former employers Tuesday, referring to Clear Channel as “Fear Channel,” WWPR as “Power One-Oh-Jive” and WQHT as “Shot 97.”

He focused more on current cultural events, saying he loves A&E’s “The First 48,” then deflecting most political discussion after saying he supports John McCain for President.

He spent considerable time promoting Pulse 87, which switched to its uptempo contemporary rhythm format Feb. 11 and has drawn raves from dance fans.

Star played several songs himself, all in the dance format. “It’s nice,” he joked, “not to have to wake up to Jay-Z and P. Diddy.”

He said he will feature a daily mix segment from DJ Yonny, formerly of WWPR and now Star’s new producer. The rest of the team is White Trash Helene, Buc Wild and DX21.

Star said he had “several offers” for other radio jobs before he joined Pulse 87, including a proposal last March from XM.

“XM was great,” he says. “We still might work with them. But playing rap records and cursing a lot wasn’t what I wanted to do.”

Part of the appeal of Pulse 87, he said, is that its signal comes from a low-power TV station, over which Star plans to produce a video version of the show. He also expects radio syndication.

One of his harshest critics, Queens councilman John Liu yesterday said he has no problem with Star back on the radio “if he’s learned his lesson.

“He has pledged to behave responsibly over the airwaves and now we will see if he lives up to that newfound conscientiousness. We’ll be watching.”

New York got another “contemporary hit” radio station Monday, and it’s got a hot dance rhythm.

WNYZ (87.7 FM), which calls itself Pulse 87, will spend the first week establishing music and “imaging,” says program director Joel Salkowitz.

Next Monday, it will bring Star and Buc Wild back as its morning show - “followed closely,” says Salkowitz, “by the new Pulse 87 air personalities, who will be live and local. What a concept!”

Salkowitz, who programmed both the old WQHT and WTJM as uptempo rhythm stations, says the Pulse 87 music will be “rhythm top 40 leaning away from rock and rap and toward club and dance sounds. The sound of New York.”

One radio fan who immediately gave Pulse a thumbs-up was Tony Santiago, who has been lobbying for years for some station to play more current dance music.

“WKTU and Z100 just don’t play current dance, or at least dance with an edge,” he said yesterday. “That’s what I’m hearing on Pulse. I know they’re still a top-40, but so far I’m ecstatic.”

If Pulse picks up listeners and WHTZ or WKTU adds a few dance tracks to compete, says Santiago, “So much the better.”

Pulse 87, which is owned by Mega Media, plans an extensive promotion campaign, says Salkowitz.

“We’re hitting the streets of New York and we’ll give the audience a reason to get excited about radio for a change.”
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