The ACCC has heard concerns about internet company TPG’s proposed takeover of iiNet.

The competition regulator wants more information on the 1.56 billion deal, so that it can determine what effect it may have on competition and on customer service levels as well.

The ACCC says it has received submissions from consumers who fear service at iiNet will decline.

iiNet is well known for its high-level customer service and willingness to defend its customers against claims of copyright violation.

The companies have been brokering the deal since TPG launched a takeover bid in March.

If it goes through, the merged company would be Australia’s second-largest provider of fixed-line broadband services.

“The key argument in terms of quality is that, firstly, will TPG keep the iiNet brand and customer experience in the marketplace and, secondly, if they don't, will somebody else just fill that gap, we need to weigh all of that,” ACCC chairman Rod Sims told ABC reporters.

“The five players going to four means that there will be less competitive tension in the market, I accept however, that if TPG keeps both brands there and runs them much the same it might address some of the consumers' concerns about iiNet customer service levels.”

The ACCC's own statement of issues found the acquisition was “unlikely” to create competition issues in other markets, such as the supply of wholesale transmission, mobile broadband or voice services.

The ACCC says it wants further submissions on the matter ahead of a final decision to be made in August.