Ofcom plans to deregulate more than 60 per cent of the UK broadband market but intends to maintain regulation in areas where BT and KCOM dominate, it has been reported.
Under the proposals, areas where strong competition already exists between broadband providers would be exempt from legislation compelling BT and KCOM to open up their networks to other ISPs.
However, in areas, where levels of competition are not as advanced, the regulations would apply - these are defined by Ofcom as areas where there are only two or three providers, which it estimates constitute 15.7 per cent of UK households as well as the 20 per cent who only have one.
Ofcom cited the example of Hull, where KCOM is the sole provider, as a case study that underlined the need for deregulation.
A statement from the telecommunications watchdog said: "Ofcom has found that KCOM's position in the Hull market gives it a dominant market position."