The long-anticipated marriage of satellite radio companies Sirius and XM happened quietly on a Friday night in late July, with the five-member Federal Communications Commission voting 3-2 in favor.

The FCC green light was the final hurdle in a long approval process -- the two companies announced their intention to merge in February 2007. A lot has happened in that 17 months. Rising gas prices and the economic downturn have reduced new car sales, which are the major source of new satellite radio subscribers.

Kit Spring, an analyst with the Stifel Nicolaus brokerage, doesn't believe the satellite industry's reliance on new car sales will have a long-term negative impact. "Auto sales have a good chance of improving over the next two years as Detroit improves its mix of fuel efficient cars.

"Satellite radio is more likely to become a standard [feature] in new cars due to a better product for consumers, more choice and less confusion among customers over the long term."

The merger had -- and still has -- its critics. FCC commissioner Jonathan Adelstein was one of the two dissenting votes in the merger approval: "They kept each other on their toes. I hope they keep their edge and don't become a fat and happy monopoly," he said.

The National Association of Broadcasters, the trade association representing broadcast radio stations, vigorously opposed the merger and says the new company may not operate in the consumer's best interests.

"The consumer will suffer because two competitors are better than one," says NAB executive vice president Dennis Wharton. "When you have a monopoly, it generally leads to higher prices and less innovation in terms of technology. You don't have to be as scrappy when you don't have a competitor."

Industry observers agree that it's highly unlikely that a second player would enter the satellite radio field. Instead, the competition is coming from a wide array of media. Satellite radio, like terrestrial radio, faces increased competition from new media platforms that don't require a costly satellite network -- Internet radio, podcasting and increased sales of iPods and other portable music players.

The NAB also views the merger as a bad deal from a business point of view. "The jury is still out on whether even one satellite radio company can survive. These companies have been racking up some pretty substantial losses, year in and year out," Wharton says, citing high salaries paid to stars like Howard Stern. "One of the arguments we made in opposing the merger was why would the government want to bail out two companies that made really bad business decisions?

"A lot of analysts and experts think that given the explosion of podcasting and the talk about wireless Internet in the car, there's a real question whether even a monopoly satellite radio provider is going to be able to survive."

But, Spring says, Sirius-XM is "far better off as a combined company" and that its enhanced programming choices will be attractive to consumers.

The subscriber base for both has held steady, despite the months of uncertainty preceding the merger. The churn rate, or the number of subscribers who cancel their contracts, Spring says, was "solid this quarter despite a retreating consumer and a higher percentage of iPod jacks in new cars, giving us confidence that consumers still like the product.

"It is likely that churn will tend to be lower for the combined company as the a la carte offerings make the product more customizable and the increased offerings make the product more attractive."

The new company's headquarters will remain at Sirius in New York, with XM operating as a wholly owned subsidiary that will continue to be based in Washington, D.C.

Maury Mechanick, a lawyer in the D.C. office of White & Case and a veteran of the satellite and telecommunications industry who represents clients in those fields, doesn't see large numbers of people giving up their satellite radio subscriptions to save money in a tough economy. "It's not a big-ticket item. It isn't going to be that high on the list."

Spring sees significant cost savings in terms of transmission and programming, as the companies combine aspects of their businesses, along with "the renegotiation of high-cost contracts on sports and with major personalities such as Oprah and Martha Stewart."

No mention of Howard Stern in that group, who won a five-year, $500 million contract with Sirius when the two companies were bidding for the shock jock's services.

"Based on Arbitron ratings, we believe XM and Sirius overpaid for all their content, with the possible exception of Howard Stern. ... We believe the Howard Stern contract has been profitable but that his contract may be renewed at lower rate when it expires in 2010," Spring says.

Mechanick also believes that, although the merger deal required careful review, a year and a half was too long to keep both the companies and their subscribers hanging.

"The two companies involved have been in a state of suspended animation. ... They didn't know if the merger was going to go through or not. It puts a lot of plans on hold."