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For consumers, a merger of Sirius Satellite Radio and XM Satellite Radio Holdings sounds like a great idea, and why wouldn’t it? Listeners would be able to find all of their favorite satellite radio entertainment on one provider for one price.

Since the $13 billion deal was announced on Feb. 19, 2007, it has been met with skepticism from potential competitors that a merger of the two companies would create a monopoly in the satellite radio sector, with no check on the combined entity’s ability to raise prices.

The deal has traveled a long road before landing on the Federal Communications Commission’s doorstep, following Dept. of Justice antitrust approval on March 24. But slowly the merger, which sends 4.6 shares of Sirius to XM shareholders for each common share, won over its critics.

Credit Suisse puts an intrinsic value on Sirius stock, which reached a high of $69.44 in 2000, of $3 per share. The broker said the stock will stay rangebound in the mid-$2 to $3 area in 2008 because synergies will not be immediately realized (and would be offset by integration costs), average revenue per user (ARPU) compression would be likely given unactivated cars as Ford ramps up production, and weak sales for the auto industry will limit gross subscriber additions.

Credit Suisse does, however, see some benefits from a merger of the two satellite radio providers. “The merger of Sirius and XM creates an opportunity for the company to increase ARPU (without actual price increases) through the offering of new programming packages, and to achieve cost synergies in most areas with the most notable exceptions being music royalties and investment in the actual satellite platforms,” the broker said. “The result of these two factors should lead to a sustainable and profitable business model over time, assuming more perfect substitutes for satellite radio in the car do not arise.”

By 2009 and 2010, Credit Suisse expects operating savings and ARPU growth from an increasingly favorable programming tier mix that will be a catalyst for the stock. But for now, the $3 billion in synergies that Credit Suisse estimates will have to wait, as investors continue to sell off Sirius shares (changing hands at $2.77, down nearly 8% year-to-date) and that long, winding road for both broadcasters shows no end, only more pavement.

The Sirius-XM merger is looking more likely with the Department of Justice declaring Monday there are no antitrust grounds to block the deal, and the fate of the union now lies in the hands of the Federal Communications Commission.

The FCC’s yay or nay could come within weeks, analysts said.

A merger wouldn’t harm consumers because it isn’t a union that would lessen competition, the DOJ said in a prepared statement Monday. Even now, Sirius and XM don’t really compete because customers have to use specialized equipment - whether installed in their vehicles or in the form of aftermarket products - and that essentially locks out the other provider. Moreover, subscribers rarely switch, according to the DOJ.

Separately or as a single unit, the DOJ said, Sirius and XM also still have to contend with available and potential “alternative sources for audio entertainment” - in the future, for example, wireless networks that offer streaming Internet radio to mobile devices will probably muscle their way into the satellite radio space.

There’s also little chance a Sirius-XM hybrid would raise prices, the department argued.

Consumer advocate Consumers Union begs to differ. In a report on its Web site, the organization said it opposes the creation of “a nationwide monopoly in the satellite radio market.”

“Service and equipment prices would almost certainly jump following a merger since there would no longer be any competition,” the group said. It noted that neither Sirius nor XM has reported a profit since each network began operating more than a decade ago.

Analyst reaction to the DOJ approval was mixed.

Goldman Sachs rated Sirius sell, citing liquidity and possible FCC hurdles in a merger scenario, and said the stock has probably reached a near-term high.

Cowen and Co. maintained an outperform rating on both Sirius and XM, anticipating the FCC would demand only “modest concessions,” such as price controls and a la carte programming choices, that wouldn’t surprise investors. The merger will almost certainly go ahead at a brisk pace, and integration would bring immediate savings, Cowen analysts said.

Stifel Nicolaus said stocks underreacted to news of the DOJ approval, suggesting investor skepticism, but rated Sirius at buy.

Stanford Group rated both companies hold, citing synergies benefits from a merger, and saw XM stock rising if the merger goes ahead but facing “a steeper downside” if the deal fails.

The union seems likely to pass muster: several analysts pointed out that the FCC doesn’t have a history of rejecting mergers approved at the DOJ.