Research commissioned by BT and undertaken by Plum Consulting has concluded that rival operators continue to benefit from what BT calls a 'price distortion' in the wholesale broadband market.
Bt has now called on Ofcom to level the playing field saying that its share of the broadband market now stands at around 31%, compared with 41-52% for other ex-incumbents in Europe.
Plum Consulting reckons that rival operators have benefited from a 'pricing distortion' by £623m over the past nine years.
BT now states that Ofcom has achieved its policy goal of driving competition deeper into the network and that it no longer needs to set prices that favour some operators over others.
This is because such companies are allowed to pay below cost for their main regulated service whereas others, who rely on a different regulated service, are forced to pay above cost.
BT is urging Ofcom to close the current pricing gap now, thereby fulfilling the policy it set in 2009 - rather than over the next six years as is being proposed. Plum estimate such a delay would add a further £369 million of distortion, taking the total impact to around one billion pounds.
John Petter, BT Consumer CEO, said: "TalkTalk and Sky have enjoyed subsidies for the best part of a decade but it is time for that to end.
"Both are successful companies and both are more than capable of standing on their own two feet. It is particularly unfair that BT has to give Sky a commercial leg up when they consistently refuse to provide us with fair access to their own services.
"Ofcom should be given credit for driving competition deeper into the network but that success needs to be reflected in current regulation.
"We know that Ofcom want to tackle this distortion but we want them to act now given this is a highly dynamic and competitive market. All we are asking for is a level playing field where prices reflect costs and consumers benefit as a result."
The current situation has its roots in 2005 when Ofcom decided to promote local loop unbundling (LLU), a process whereby other companies can install their own equipment in BT exchanges in order to offer broadband and phone services.
They have done so over the years by setting the price of the fully unbundled service[3] below cost whilst inflating prices for the alternative option[4] where companies take a direct wholesale service from BT.
The number of fully unbundled lines now stands at 7.6 million compared with less than 50,000 in 2005.
BT says that main beneficiaries have been Sky and TalkTalk who now have more than nine million broadband customers between them, around half of all the broadband connections carried over BT's network.
The new report from Plum Consulting forms part of BT's response to Ofcom's Fixed Access Market Review (FAMR), specifically its proposals around the next price cap for Openreach's regulated copper products.