NTL/CWC plc merger: CC sends issues letter

The Competition Commission (CC) sent an issues letter on the 7th January 2000 to the main parties in its inquiry into the merger between NTL/Cable & Wireless Communications plc (CWC) involving both companies cable operations. The letter identified matters for further consideration and was to be made public during the following week to allow interested parties to raise any further points. The CC is expected to submit its report to the Secretary of State for Trade and Industry, Stephen Byers, on 25th February 2000.

The Commission is considering several issues with a view to determining whether or not the merger will have an adverse effect on prices or the choice of channel or programme providers or pay-TV platforms available to customers, or on the development of new services using the cable network. These issues include:

(a) what is the appropriate definition of the markets affected by the merger (i.e. whether national or local markets for pay-TV, for telephony, or for other uses of cable systems should be regarded as relevant),

(b) whether the merger directly reduces competition, potential competition or comparative competition between NTL and CWC as cable operators in supply of pay-TV, telephony or other services,

(c) whether, even if there is no direct effect on competition between the two companies, the merger may create or enhance the market power of the merged entity in relation to: (i) that of pay-TV channel or programme providers; (ii) that of other pay-TV platforms; (iii) the terms for transmission of free-to-air, public service programmes; and (iv) customers.

Comment: other press reports indicate that another of the issues being considered by the CC is whether to insist NTL and CWC open up their networks to competitors in return for allowing the merger to go ahead.

Source: Competition Commission Press Release 7/01/2000