The average household with broadband pays �24.99 a month, but that could fall to �17.99 later this year.

Newtel Solutions said Jersey Telecoms is abusing its market position and that the decision will hit its own profits.

The Jersey Competition Regulatory Authority will be checking it is within the terms of its licence.

Jersey Telecom controls the broadband network in Jersey and Newtel has to buy its customers access from Jersey Telecom.

Peter Funk, a director of Newtel, said it wants to set up its own network, but cannot because there are too many restrictions.