The US justice department yesterday approved Sirius Satellite Radio Inc.'s proposed $4.59-billion buyout of rival XM Satellite Radio.

This decision was based on the fact that the new company would not monopolise the market as iPods, MP3 players and other such gadgets are providing options to people to listen to music.

Thomas O Barnett, in announcing the decision, clarified that in several important segments of their business, with or without the merger, the parties do not compete today and that the merger would thus not be obviating any competition between them.

Analysts now predict that this long awaited decision will make it easier for other media companies to merge, as the definition of who a competitor is, will change. This is especially applicable to any medium that is subject to digitisation.

Consumers stand to be more entertained, as this merger brings together programmes by Oprah Winfrey, Willie Nelson and Snoop Dogg, who have lucrative and exclusive contracts with XM, as also with those on Sirius, including Howard Stern, Martha Stewart and National Public Radio.

Sports fans will also now be treated to a single source of commentary, as XM offers play-by-play from Major League Baseball games and Sirius broadcasts live play-by-play games of the N.F.L. and N.B.A. as well as live Nascar races.

However, not all sections of society are elated with this decision. Senator Herb Kohl, chairman, senate judiciary committee's subcommittee on antitrust, said in a statement that the merger would create a monopoly in the satellite radio industry and urged the Federal Communication Commission (FCC) to block it.

"We are particularly disturbed by this decision, given the Justice Department's record in recent years of failing to oppose numerous mergers which reduced competition in key industries, resulting in the Justice Department not bringing a single contested merger case in nearly four years," Kohl said.

However, the companies have vowed that the combined firm will offer listeners more pricing options and greater choice and flexibility in the channel programmes they receive. If the deal is approved, the companies plan to offer pricing plans ranging from $6.99 per month, for 50 channels offered by one service, up to $16.99 a month, where subscribers would keep their existing service in addition to choosing channels offered by the other service.

An a-la-carte package will also be announced where consumers can pay only for the channels required by them.

Both companies continue to lose money, but have shown significant improvements in the past year in both, revenue and subscribers.

XM added 1.4 million subscribers in 2007 along with an increase of 22 percent in revenue coupled with a net loss of $682 million for the year. In the same period, Sirius added 2.3 million subscribers and reported a 45 percent increase in revenue with a net loss of $565 million for the year.

Shares of both companies have risen sharply even though the FCC still needs to approve the combination of the only two providers. Shares of XM rose to $13.79 and Sirius' share price went up to $3.15.