BT may have to pay a fine if it is found to have broken competition rules
BT has been given the opportunity to make its case to Ofcom
Telecoms regulator Ofcom is set to rule that BT infringed competition law by charging its rivals high prices for wholesale broadband services.
The case follows a 2002 complaint by Wanadoo that BT's high prices to rivals forced them to raise prices.
BT says it has already been cleared of the charge, but Ofcom says it breached Section 18 of the Competition Act 1998 and Article 82 of the EC Treaty.
If BT is found to have breached these two guidelines, then it could face a financial penalty, Ofcom said in its statement.
Ofcom has previously said that the opening of BT's networks to its rivals is key to the future of broadband.
In June, BT announced it was to cut monthly charges on its high-speed broadband internet services by up to 25% while in May it cut the price of broadband access for its rival providers by 70%.
The investigation into BT's residential broadband pricing was initiated by Ofcom's predecessor, Oftel, following a complaint by Wanadoo plc, formerly known as Freeserve.
"Ofcom has... sent to BT a statement of objections stating the facts of the case, the matters to which it has taken objection, the action it proposes and the reasons for this," the regulator said in a statement.
"BT now has the opportunity to make written and oral representations in response to Ofcom's proposed decision. These will be taken fully into account before any final decision is made."
BT insists it has already been cleared and said that it would respond to the proposed Ofcom ruling.
"The case involves complex legal issues which will take time to resolve and we will continue to work with Ofcom over the coming months to bring this matter to an equitable conclusion," it said.
The firm said it was confident it would be cleared of any infringement.
"This is a long-running case that has already been going on for over two years and in which BT has already been cleared twice. We remain confident of our position," a spokesman for BT said.