Ofcom's new Online Copyright Infringement Initial Obligations Code has been criticised by leading broadband provider BT.
The firm believes the proposal to exclude fixed internet service providers (ISPs) with fewer than 400,000 subscribers from the duty to tackle web piracy risks distorting the market.
Mobile broadband vendors will also be exempt from the duty to combat content sharing among their consumers.
Ofcom's code comes after the Digital Economy Act – which is set to enforce a crackdown on illegal filesharing – became law.
A spokesperson for BT told the Telegraph of its "concern" over the proposal to limit application of the code to just seven ISPs.
"The UK currently boasts a highly competitive broadband market and we believe that such a move has serious potential to distort the market," they added.
"We will be submitting our full response to Ofcom by the required deadline of July 30th 2010."