Local rural broadband schemes have complained about being starved of government subsidies, as their councils instead rely on services from BT.
As part of the process to get broadband to hard-to-reach rural parts of the UK, local broadband groups have been encouraged to bid for funds from the Rural Broadband Community fund.
But the BBC reported that a number of local schemes are complaining they are being carved out of the market by BT.
In July, culture secretary Maria Miller praised local broadband schemes in Dorset and Oxfordshire that were outside the national government-funded rural broadband scheme, which has seen BT awarded all contracts through local authorities so far.
The Cotswolds Broadband scheme was aiming to provide ultra-fast fibre-to-the-home services to 5,000 premises in West Oxfordshire, and was hoping to get government cash through Oxfordshire County Council to help fund it.
After initial public support for this scheme, Oxfordshire County Council has now decided against direct financial support for it after signing a multi-million pound deal with BT that covers a much larger area.
Hugo Pickering, head of Cotswolds Broadband, told the BBC: "We have already put in a whole lot of money and so the council is going to be liable for a compensation claim."
In a similar decision in Dorset, BT's subsidised dominance in the rural broadband market has also been blamed.
Steve Adamson, who runs a proposed scheme in Dorset, which aims to run fibre networks along disused rail tracks, told the BBC: "Our scheme offered fibre to the home, which is not what BT is offering. It was going to be better and it was going to be cheaper."
He said: "The decision was delayed until the county council signed its contract with BT. It became clear that BT intended to include the area we were going to cover leaving our scheme dead in the water."
The BBC says a third rural broadband scheme, B4RN, which is already running in Lancashire, is waiting to hear whether it will qualify for Rural Broadband Community funding.
BT told the BBC that one reason local rural broadband schemes may not be getting government funding, via their local authorities, is that they may be offering services that can not be sold by all operators on a wholesale basis.
The networks BT is building, with the help of over £500 million of government cash, can be used to offer services from BT's retail arm Openreach and any other broadband operator.