Senator urges FCC to block XM-Sirius deal

WASHINGTON (Reuters) - A senior Democratic senator urged U.S. communications regulators on Friday to block Sirius Satellite Radio's (SIRI.O) purchase of rival XM Satellite Radio XMSR.O, saying the deal would lead to higher prices to customers.

Sen. Byron Dorgan, a high-ranking member of the Senate Commerce Committee, wrote to the chairman of the Federal Communications Commission saying the agency should not follow the "illogical" decision of the Justice Department, which last month granted the deal antitrust approval.

"This merger is contrary to the public interest. I hope that the FCC will stand up for competition in the public interest and deny this merger," Dorgan, of North Dakota, said in the letter to FCC Chairman Kevin Martin.

The merger would bring entertainers such as Oprah Winfrey and shock-jock Howard Stern under the same banner. It has been criticized as anti-competitive by the traditional radio industry, and by some U.S. lawmakers including Dorgan.

However, antitrust authorities at the Justice Department approved the combination after concluding it would not harm consumers. The department said satellite radio companies face stiff competition from traditional AM/FM radio, high-definition radio, MP3 players and audio delivered by mobile phones.

With the Justice Department's approval in hand, analysts have said XM and Sirius are unlikely to face outright opposition from the FCC, although the agency could impose conditions on the deal designed to protect consumers and preserve competition.

Under U.S. law, the FCC is tasked with looking beyond competition issues and determining whether a communications deal is in the overall public interest.

Sirius Chief Executive Mel Karmazin has promised that the combined company would let customers buy channels individually as well as let them block adult channels and get a refund for those channels. Sirius has also said all existing XM and Sirius satellite radios will continue to work after the merger.

(Reporting by Peter Kaplan; editing by Tim Dobbyn)