Ministers are reportedly considering offering the rights to build full-fibre broadband networks as regional franchises throughout the country.
The Telegraph understands that this approach is being seriously considered as a way to speed up the rollout of the technology, which is considerably faster than traditional copper-based broadband.
According to the newspaper, franchising is seen as a viable option because it could help to ensure rural areas are not excluded from broadband infrastructure investment plans.
However, the Telegraph believes BT is against the idea and would instead prefer the government to look at whether infrastructure subsidiary Openreach could charge more for broadband in rural areas, as this could help it justify investing in areas that offer lower returns.
A spokesman for the Department for Digital, Culture, Media & Sport commented: "We want full-fibre, gigabit connectivity to be widely available to UK homes and businesses.
"The Future Telecoms Review underpins our plan to build a Britain fit for the future, and we are looking at all options to drive commercial investment and boost competition."
This comes shortly after Ofcom unveiled a package of measures to boost investment in full-fibre broadband networks across the UK, which includes a requirement for BT make its telegraph poles and underground tunnels open to competitors, so it is quicker and easier for rival firms to build their own full-fibre networks.