Original article ISPreview UK:Read More
The CEO CityFibre, Simon Holden, has today defended the company against criticism from a number of alternative UK broadband networks, which last week objected to the Competition and Markets Authority‘s (CMA) provisional position to block the proposed £2bn takeover of Netomnia (Substantial Group) by the parents of nexfibre and Virgin Media (O2).
Just to recap the basics. The CMA’s interim report concluded that the deal would “result in a substantial lessening of competition (SLC) in the wholesale supply of fixed broadband services“. However, much of the regulator’s argument seemed to be based around a counterfactual, which posited that CityFibre would have purchased Netomnia had nexfibre not done so and that, they suggest, would have been better for competition.
In the end the CMA left nexfibre with little room to propose any viable remedies and so they didn’t. Instead, the network operator responded by calling on the CMA to effectively review the counterfactual, which they felt would show that CityFibre’s financial situation – as well as that of the wider market (currently very weak) – had changed and the operator may thus struggle to mount a serious bid for Netomnia.