Small ISPs could lose out as part of a new regulatory settlement between Ofcom and BT to be announced tomorrow.

Few people in the industry expect Ofcom to take the nuclear option and launch a full-scale Enterprise Act investigation that could lead to the eventual break-up of BT following tomorrow's update on the Strategic Review of Telecommunications tomorrow

Instead, the consensus is that Ofcom and BT will have thrashed out some agreement that meets the regulator's demands for a "substantive behavioural and organisational changes" that would provide rivals with "transparent and equal access" to its local network.

However, while BT, the UK's larger telecoms players and Ofcom are understood to have agreed a settlement, industry sources have told The Register that this will be at the expense of smaller operators.

One source told us: "It's all been sewn up by the big boys in a deal that favours large operators."

Such are the concerns ot there are now real fears that smaller, niche operators will be priced out of the market with sources warning of a bleak future. ®

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