Nexfibre has hit out at the U.K.'s merger watchdog after it said the group's proposed 2 billion-pound ($2.66 billion) acquisition of Netomnia parent Substantial Group could substantially reduce competition.

The company, a joint venture between Virgin O2 Media's co-owners Liberty Global and Telefonica, and InfraVia Capital Partners, said on Tuesday that the Competition and Markets Authority's assessment of the deal so far is fundamentally flawed.

The statement comes as a deadline for the companies to submit commitments to ease the regulator's concerns passed on Friday. Companies can offer so-called remedies to the U.K. watchdog to ease competition concerns, such as divesting parts of a business or making investment commitments, in order to get their deals cleared.

The U.K. fiber-to-the-home broadband network group said it engaged "in good faith" with the regulator on potential investment and wholesale access commitments. But it added "there is no remedies package that can address the CMA's current counterfactuals, and on that basis we have not submitted one."

The CMA also on Tuesday started inviting comments from third parties on potential commitments it could accept, saying in a published document that prohibiting the transaction is an option, though no decision has been taken yet.

It set an Oct. 27 deadline to receive feedback on potential remedies.

"We've published an invitation to comment on potential ways our provisional competition concerns over this deal could be resolved," a CMA spokesperson said.

Nexfibre agreed on a deal to buy Netomnia in February.

The CMA launched its probe into the merger in June and warned the companies at the start of October it could substantially reduce competition in the wholesale supply of fixed broadband and that a deal with Netomnia and CityFibre, an alternate telecommunications provider, would have been better for competition in the market.

Nexfibre said in a statement that the CMA's conclusions "rely on counterfactuals that do not reflect the commercial and financial reality of the UK fibre market.

"The assumption that CityFibre will acquire Netomnia is not a credible basis on which to judge this transaction," the company said. "Nor is the assumption that the billions of pounds of investment enabled by this deal would simply happen anyway."