Ofcom's plans to drive competition in the business broadband market have been dealt a blow from the High Court's Competition Appeals Tribunal (CAT).
The watchdog wanted BT to introduce a "dark fibre" product, which would allow the likes of TalkTalk, Vodafone and Three access to unlit fibre lines used for ultrafast business broadband connections.
However, the CAT has quashed Ofcom's proposals, as it believes the body made mistakes in its definitions of the business broadband market in a recent review of the sector.
As a result, the watchdog could be forced to draw up a brand new set of proposals, although it does have the option of appealing against the CAT's ruling.
Commenting on the decision, an Ofcom spokesperson said: "We are disappointed.
"Once we have the Tribunal’s reasoning, we will know how best to proceed in order to protect competition and consumers.
"We continue to believe that dark fibre can bring significant benefits for businesses and consumers."
An Openreach spokesperson stated that the UK has a "vibrant business connectivity market with a large, diverse and growing choice of providers".
"This decision means that future regulation, where necessary, can be placed on a sound footing," the representative said.
Mark Collins, Director of Strategy and Public Affairs at CityFibre, added that it welcomes the Tribunal’s decision, as it is a "very positive outcome for all companies investing in full fibre infrastructure".
"We have consistently argued that Ofcom’s regulatory framework must, at its core, support competitive investment across the UK’s digital infrastructure," he commented.
"Our decision to appeal the BCMR (Business Connectivity Market Review) was based on our strong belief that Ofcom’s BCMR regulation did not support this objective."
Mr Collins said CityFibre is looking forward to engaging in a productive dialogue with Ofcom on the matter, shaping a regulatory environment that "encourages investment, supports competition and delivers better outcomes for enterprises and businesses".