Ofcom has announced it will investigate BT's broadband services after TalkTalk claimed the company is abusing its dominant market position.
The complaint focuses on the fees the firm charges to allow other internet service providers (ISPs) to use its fibre optic network.
According to Ofcom, TalkTalk has claimed that BT has "failed to maintain a sufficient margin between its upstream costs and downstream prices, thereby operating an abusive margin squeeze".
A TalkTalk spokesperson stated: "We have long maintained that there needs to be tighter regulation in super-fast broadband to ensure a level playing field and therefore deliver real benefits for consumers and businesses.
"We are pleased that Ofcom is taking this matter seriously and have decided there is reasonable suspicion to investigate BT’s fibre pricing.”
BT claimed it is disappointed that Ofcom has opened the case despite a "lack of evidence".
A spokesperson commented: "We are confident there is no case to answer. It would be better if the industry’s and Ofcom’s focus was on investing in the future of the country rather than on spurious actions designed to hold up fibre in the UK.”
Ofcom will investigate the complaint over the coming months before deciding if BT has a case to answer.
This is the latest development in an ongoing feud between the two ISPs. Earlier this year, BT boss Ian Livingston described TalkTalk chairman Sir Charles Dunstone as a "copper luddite" after he claimed BT is getting an unfair amount of state support.
Dido Harding, TalkTalk chief executive, responded by claiming BT is monopolising the UK's super-fast broadband industry and said "only a luddite" would believe this can spearhead national growth.
The Advertising Standards Agency has also taken action against a number of ISPs in 2013. The organisation has banned two Virgin Media broadband adverts, which it judged to be misleading and has recently ordered PlusNet to withdraw one of its commercials.
Large ISPs such as BT and TalkTalk may not roll out super-fast broadband in rural areas that are not deemed to be 'commercially viable'.
Posted by Mark Wynn