By Peter Kaplan

WASHINGTON (Reuters) - Regulators reviewing Sirius Satellite Radio Inc.'s proposed purchase of XM Satellite Radio Holdings Inc. are asking the companies to turn over more information about the deal, as some analysts expressed growing optimism that it will be approved soon.

The Federal Communications Commission has sent letters to the companies' lawyers requesting documents on any marketing agreements they have with major retailers, equipment and vehicle manufacturers and content providers.

The FCC request, from the agency's Media Bureau chief, also asked the companies to provide information to back up claims that the merger will cut costs and benefit consumers. It set a November 16 deadline for the companies to respond.

"It does mean FCC is getting closer to a decision," Stifel Nicolaus analyst Blair Levin said on Wednesday.

The move could be an indication that the FCC is putting together a rationale to the endorse the deal, Levin said. But more likely, he said, it's "just the process playing out."

Sirius plans to buy XM in an all-stock deal worth about $4 billion. The merger would combine the only two providers of satellite radio service in the United States and has sparked concern among some U.S. lawmakers and consumer groups.

The FCC is reviewing the deal's impact on the public interest while the Justice Department is examining whether it would raise antitrust problems.

The FCC's latest request comes at a time when some analysts are expressing optimism that the deal will get the endorsement of the two agencies.

"It's looking more and more likely that the deal will get done," said Jessica Zufolo, an analyst with Medley Advisors.

As evidence, analysts cite comments filed with the FCC, which include expressions of support from some large electronics retailers and auto manufacturers.

"That's clearly a positive sign for the merger," Levin said. "What that tells the DOJ is that key distributors think that there are some efficiencies that outweigh any competitive risk."

Analysts believe Sirius Chief Executive Mel Karmazin made great strides in winning over the FCC during the summer when he announced a combined company would offer to sell subscribers different packages of channels on an a la carte basis.

The offer could be appealing to FCC Chairman Kevin Martin, who has been pressing cable TV companies to offer their channels a la carte, analysts said.

"I think that moved the needle," Zufolo said.

Levin said a decision by Justice Department is likely by early December, and he said the department is "more likely than not" to approve it.

While it is possible that staff lawyers at the department may oppose the deal, they could be overruled by senior antitrust officials, Levin said.

If the deal is cleared by antitrust regulators, the FCC would probably give its approval soon afterward, he said.

"If the DOJ says yes, we expect the FCC will focus attention on spelling out conditions for the deal, and, while the vote will likely be close, will also approve the transaction," Stifel Nicolaus said in a research note on Wednesday.
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