Two of the most dominant players in their respective industries, telco BT and software giant Microsoft, yesterday announced a 'strategic' broadband alliance which many will view as a bid to control the market.

This moves Microsoft's relationship with BT on to the same footing as its other alliances in the global telecom sector, such as those with Verizon in the US and Korea Telecom in Asia.

But ISP's AOL and Telewest have both attacked the partnership.

"A partnership between two already dominant companies is always worrying from a consumer point of view," said a spokesman at AOL. "More competition pushes prices down, market dominance does not."

BT's powerful position has already been attacked by Freeserve, which accused the company of using its previous monopolistic standing to market its broadband services.

No specific details of the partnership have yet been released, but it is expected that Microsoft will be pushing its Xbox gaming community and .Net technology. The company is to become the software and digital content provider for BT Home Computing.

"Make no mistake, this alliance is not window dressing. Our relationship with Microsoft in Europe is moving on to an unprecedented and exciting level that will bring real benefits for the customers of both companies," said Ben Verwaayen, chief executive of BT Group.

"BT has accelerated on all fronts during the past year to make broadband available to more customers across the UK. Now we want to do all we can to make broadband as attractive as possible to potential customers, residential and business, by giving then the compelling applications that will deliver a superb online experience that meets their needs and aspirations," he added.