Regulator finds "reasonable grounds" to examine BT's dominance of superfast broadband after a complaint from rival TalkTalk.
Telecoms giant BT is to be investigated by communications regulator Ofcom after one of its rivals complained about the provider's dominant market position.
Ofcom has confirmed it will launch a competition inquiry, having found "reasonable grounds" to support TalkTalk's claims that BT is "rebuilding its monopoly" with a nationwide roll-out of fibre optic broadband, backed by government investment.
A BT spokesperson said the company was "disappointed" that Ofcom was opening the case despite a "lack of evidence" to support TalkTalk's claims.
"We are confident there is no case to answer. It would be better if the industry's focus was on investing in the future of the country rather than on spurious actions designed to hold up fibre in the UK."
Last month, TalkTalk chief executive Dido Harding argued Ofcom should "oversee and assess" the wholesale price BT can charge other providers for access to its fibre network.
"This will deliver real transparency and ensure all the retail providers are competing on a level playing field," she said.
In March, Japanese electronics firm Fujitsu announced it had withdrawn from the bidding process for rural fibre optic broadband contracts. The company's sudden exit left BT as the only remaining bidder eligible for £530million of government funding.
Harding said: "Competition is something we must not take for granted. We should not - and cannot -lose sight of its importance because we are overly focused on chasing speed for speed's sake."
A BT spokesperson told broadbandchoices.co.uk: "TalkTalk, like all providers, can access BT's fibre network on equal terms. This is something that is unique in the world, so it is misleading for them to suggest otherwise.
"TalkTalk clearly see fibre as a threat to their business model. We understand why some companies may wish to protect their existing copper assets, but the UK can't afford to let such luddites drive the agenda. Too much is at stake."
Ofcom will now spend the next few months investigating the claims before deciding whether action should be taken against BT.