Mobile giants O2 and Vodafone may launch legal action over a plan to auction radio frequencies in order to roll-out mobile broadband, according to Computer Weekly.
The government had planned the sale, but both companies said the plan was unfair.
But according to the computer magazine, neither Vodafone or O2 could specify exactly how the proposals were unfair.
An O2 spokesman said: "We are reviewing all options but we believe a fair allocation of spectrum is vital for future competition in the market and therefore in the interests of consumers."
Vodafone had originally agreed to the original proposals put forward by spectrum broker Kip Meek.
A spokesman for the company said the merger between T-Mobile and Orange has now upset the proposals.
Under the plans, licence holders would have to trade radio frequencies to create spectrum blocks. In doing so, the aim is to provide mobile customers with a better quality of broadband service.
