It comes as customers have reportedly received quotes of £10,000s to connect to the internet.

The investigation centres on whether BT has complied with broadband obligations set out by legislation in March 2018.

As part of the ‘universal service obligation’, homes and businesses have had the right to request a decent broadband connection at an affordable monthly cost.

This means customers who can’t receive affordable broadband services with speeds of at least 10 Mbit/s and upload speeds of at least 1 Mbit can make a request to BT (the USO excludes Hull, KCOM is the USO for Hull).

It is then required to assess the costs of providing that connection and where it costs less than £3,400, BT must provide the connections. Where the assessed costs exceed that amount, BT must also provide the connection if customers are willing to pay the excess.

While Ofcom said the costs of some connections will be high due to the remoteness of many premises, it is concerned that BT may not be complying with the regulatory conditions correctly where it assesses excess costs for a given connection.

Costs can be shared among customers using the same infrastructure, however.

“This could result in some customers’ quote for a connection being higher than necessary”, Ofcom said.

It comes after The Guardian reported that one customer in Cheshire was quoted £100,000 to upgrade while another in Suffolk was quoted £70,000 to connect to 10Mbps broadband. A third in Devon was also quoted £70,000 but was not given a breakdown of the costs.

Ofcom said it will now gather evidence and it expect to determine its next steps before the end of the year.

‘We strongly disagree’

A BT spokesperson said: “We strongly disagree with Ofcom’s assessment of our delivery of the USO. We are disappointed they have opened an investigation when we’re fully committed to working with both Ofcom and the government to find better ways to connect the hardest to reach.

“We are obliged to send USO quotes to customers when they request them and appreciate that for the most remote properties some of these can be unaffordable. We’re working hard to enable communities to be able to share the costs of an USO connection to help drive down costs for individuals. We will launch this as soon as possible.

“For some communities, even if they share the costs, the price will remain out of reach. We can connect 400,000 properties without decent connectivity using 4G and for properties where this isn’t suitable we’re already building connections to 4,000 premises through the USO scheme. However, it does not overcome the challenges of connecting the most difficult places which represent 0.5% of the country.”

BT added that along with the existing USO programme, a new plan is needed for the hardest to reach which should be a shared endeavour.

“We’d like to see a task force set up, with cross-party support and use our experience and expertise to find a new solution. Options could include alternative technologies, such as satellite (including exploration of the potential role of OneWeb) as well as clarity on the government’s £5bn funding for rural full fibre,” BT said.