Wisconsin's attorney general asked the federal government Tuesday to block the combination of the nation's only two satellite radio companies.
In a letter to the U.S. Department of Justice, Republican Attorney General J.B. Van Hollen said the deal between Sirius Satellite Radio and XM Satellite Radio Holdings would create a monopoly that would be bad for consumers.
"The proposed merger would eliminate competition in the satellite radio industry and the combined XM-Sirius companies would be free to raise prices, stifle innovation, and reduce program diversity," Van Hollen wrote.
Sirius Satellite Radio announced in February that it would acquire XM Satellite Radio Holdings for $4.7 billion. The combination requires approval from the Justice Department's antitrust regulators and the Federal Communications Commission.
Sirius said in a regulatory filing this month that it expects the deal to be approved by the end of this year. The two companies' shares jumped last week after an analyst said the deal was likely to win approval.
The companies claim they would not be a monopoly since they compete with traditional broadcast radio and other forms of audio entertainment, such as iPods.
Van Hollen rejected that argument, saying XM and Sirius offer a unique range of live sports, weather and news. Consumers may be forced to pay more for what they already get under the companies' proposed post-merger pricing plan, he said.
The companies said in July that they would let customers choose which channels they want to receive if the deal goes through. Prices would range from $6.99 per month to $16.99 per month depending on the service, compared with the $12.95 per month both companies charge now.
Shares of Sirius gained 4 cents to $3.50 Tuesday. XM shares climbed 11 cents to $14.82.