Carolyn Kimber, CMA chairwoman, said, "Our members need more broadband facilities to support remote workers and enterprises need universal availability of broadband to support customers. To get this we need more competition in the market."
Kimber said a key factor to turning around the situation could lie in BT's "21st century network", which Kimber described as the biggest development since BT introduced digital telephony.
She said, "This network is supposed to deliver any service to any device at broadband speeds by 2008, but this is not far away, so BT will have to move fast."
Kip Meek, Ofcom senior partner for content and competition, said there had been progress. "Broadband can be acquired for as little as £15 to £19 a month in the UK and BT has agreed to reduce its broadband local loop unbundling charges to rivals by up to 70%," he said.
"The reduction will mean that the UK will move from 14th to fifth for the cheapest local loop unbundling charges in the EU."
David Harrington, CMA head of regulatory affairs, said contention rates for broadband in the UK were too high. Broadband users often compete with up to 50 other users in an exchange and this can lead to degradation from advertised speeds at busy times.
Harrington said BT's 21st century network could be used to restructure these contention rates.