The telecoms regulator Ofcom has told the Competition and Markets Authority (CMA) that it does not have any major objections to the proposed merger between BT and EE, stating that existing regulation measures are sufficient to address any resulting concerns.
The announcement effectively paves the way for the £12.5 billion deal to be completed, which has been met with opposition from BT's rivals such as Vodafone, Sky Broadband and TalkTalk.
Critics of the deal claim the resulting combined group would have too much power to undercut services from rivals, due to the ability to combine the strengths of the extensive national fixed line network with EE's mobile platform.
However, BT has suggested the move would actually help to "enhance" competition within the UK market.
BT's case for the merger has been given a further boost by Ofcom's 69-page report to the CMA, which appears to find few major reasons to oppose the deal.
According to ISPreview, the firm is hoping to complete the deal by March 2016, although the CMA is set to offer its final report on the issue in November 2016.
The report stated: "We recognise that, as a vertically integrated firm, BT may have the incentive to discriminate in favour of its downstream divisions, and we impose regulation to address such concerns.
"We believe the current and future proposed regulation that we apply to BT will limit BT’s ability to discriminate over price, quality and innovation in the provision of leased lines."