Ofcom has launched a consultation into the possibility of breaking up BT, and has invited stakeholders to register their views.
The consultation is the first phase of an Ofcom digital communications review in which the regulator is looking at the UK broadband, landline and mobile markets in terms of competition, innovation and investment.
"This review is about ensuring people get the best possible communications services, wherever they live and work," said Sharon White, Ofcom chief executive.
"Our priorities are clear. We want to promote competition, investment and innovation, so that everyone benefits from even better coverage, choice, price and quality of service in the years to come."
Ofcom is looking for input and comment on areas such as investment and innovation, competition, prices and the balance of regulation and deregulation in the market.
The watchdog said that 4G mobile broadband is available to 42 percent of UK premises, while superfast broadband serves 83 percent. Ofcom would like to see the superfast broadband picture widened, pointing out that 15 percent of UK households are denied connections of at least 10Mbit/s.
The competition question has a lot to do with BT's Openreach wholesale broadband business. Ofcom highlighted a possible incentive for BT to discriminate against rivals with prices and services, and that Openreach could be separated from the main body of BT. Rivals such as Sky back this suggestion.
BT acknowledged the review, explaining that it expected Ofcom will find that there is a healthy telecoms market in the UK.
"We welcome this review and are confident it will find the UK broadband market to be vibrant and healthy. There has been huge progress this past 10 years with an explosion in competition and broadband use," the company said.
"Consumers are getting more for less, and the UK has outpaced its European peers in terms of superfast broadband.
"Much of that progress is down to BT investing billions of pounds in fibre at the height of the recession. That investment wouldn't have occurred had BT been split in two a decade ago, and our ambitious plans for ultrafast broadband also depend on BT remaining intact."
BT said it hopes that the regulator will keep things as they are and continue to support the needs of the many in the face of the demands of a minority.
"Ofcom have overseen a regime that has balanced investment with competition and we hope they will once again put the needs of the UK and its consumers ahead of those who have tried to keep the UK in the digital dark ages," the firm said.
Mark Skilton, professor of practice at Warwick Business School, said that Ofcom's suggestions make sense.
"Ofcom's reported review of BT Openreach, a network service that also supports third-party ISPs, is not surprising given the regulator's push to further deregulate the UK telecoms and broadband market," he said.
"Deregulation started over 10 years ago with telecoms companies being required to open up their line infrastructure to third parties.
"Performance of this is critical in the sense of achieving 'net neutrality', such that the services are consistent and reliable, and for extending the range of customer broadband choice."
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