By Nick Higham BBC media correspondent

Not the place to be for GWR

The Competition Commission told GWR, one of the big four radio companies, to sell part of its newly-acquired half share in the Bristol station Vibe 101 (formerly known as Galaxy 101).

If the commission can throw a spanner into the works of that particular deal, the industry asked itself, what does that mean for the future consolidation of commercial radio and indeed the proposed merger between Carlton and Granada?

The Vibe deal was thrown out because following the takeover GWR accounted for three-quarters of all national advertising revenue, and virtually all the local revenue, on commercial radio in Bristol and Bath - and even more in Taunton. In addition GWR's sales house, Opus, was selling Vibe's airtime.

While national advertisers have agencies to look after them in a situation like this - and can always take their business to another part of the country - the commission felt local advertisers who wanted to use radio would be at the mercy of this near-monopoly supplier.

The commission was not impressed by one of the arguments often trotted out by the radio industry to justify mergers, namely that one company owning several stations in the same area has an incentive to make them as different as possible to attract as wide an audience as possible, and so benefit listeners.

That would happen anyway, the commission felt, and wasn't enough to offset the bad effects on local advertisers.

GWR's flagship station is in Bristol

GWR wasn't prepared to accept the commission's conditions for allowing the merger to go ahead (reducing its holding to less than 25 per cent and giving the contract to sell Vibe's airtime to someone other than Opus) and has sold its stake to its partner, Scottish Radio Holdings, which now says it plans to expand further in England.

The situation is very different from the proposed Carlton-Granada merger. There the issue is not the effect on local advertisers, but the impact on national advertisers and the very big airtime buyers who act on their behalf.

The advertisers' opposition to a merger did not stop them making common cause with the ITV giants last week, however, when the commission suggested getting rid of the "share deals" under which advertisers get discounts for committing a greater share of their expenditure to ITV.

Any other system for buying and selling airtime would be unworkable, both sides concurred.