UPDATE 1-Ashcroft to lobby against Sirius-XM deal

(Adds XM comment, Ashcroft quote, details)

NEW YORK, March 5 (Reuters) - Former Attorney General John Ashcroft is lobbying for the National Association of Broadcasters to prevent Sirius Satellite Radio (SIRI.O) from acquiring XM Satellite Radio XMSR.O, after offering his services to both sides.

Ashcroft's consulting firm said on Monday it had offered his experience in antitrust issues to both XM and the broadcasters. XM said it turned down the offer.

Firing his first shot in what is likely to be months of bickering over the deal between satellite and terrestrial radio companies, Ashcroft faxed a letter to current Attorney General Alberto Gonzales, saying the proposed merger "raises serious competitive concerns."

"To create now a (satellite radio) monopoly ... is to create a unitary dominant player who would have both the incentive and ability to use monopoly rents to undermine competition in media and broadcasting," Ashcroft said in the letter dated Feb. 27. XM, which argues that a combination with Sirius would offer more program choices and pricing options to subscribers, said that in bringing on Ashcroft, the broadcasters' group was using its checkbook to try and crush the deal.

"The NAB will spend millions of dollar lobbying Washington in a transparent attempt to insulate its radio station members from market place competition from sat radio," XM spokesman Nathaniel Brown said on Monday.

Ashcroft Group representative Juleanna Glover Weiss called XM's assertion "sour grapes."

Sirius' plan to buy XM Satellite for roughly $4.6 billion in stock must win approval from both the U.S. Federal Communications Commission and the Justice Department's antitrust division.

The deal value is calculated based on the agreement that Sirius would swap 4.6 of its shares for each XM share, on XM's recorded total outstanding shares of 293.8 million, and Sirius' current share price of $3.39.

The deal would bring entertainers such as TV personality Oprah Winfrey and shock-jock Howard Stern under one roof.

To get approval, the companies will have to convince the FCC to waive a key regulation and persuade the Justice Department that any price increases would be constrained by competition from free over-the-air radio and consumer gadgets like Apple Inc.'s (AAPL.O) iPod.

Consumer advocates are concerned the deal could lead to higher prices, less diversity in programming, and could leave customers stuck with incompatible equipment.

((Reporting by Franklin Paul, editing by Tim Dobbyn; Reuters Messaging: Franklin.Paul.reuters.com@reuters.net; email Franklin.Paul.reuters.com; Tel: +1 646 223 6180)) Keywords: ASHCROFT XM

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