It is understood that the two are discussing issues including joint billing of TV and telecom services as part of an effort to take on cable TV rivals, NTL and Telewest, which are able to offer bundled TV and telephone packages.
The talks could also see BT acting as an installer for Sky and taking on the installation of satellite dishes and set-top boxes, which it would be able to install alongside its own telephone services.
The talks have been between Pierre Danon, head of BT Retail, and Tony Ball, CEO of BSkyB.
Speaking to the Observer newspaper, Danon said, "We are looking at a number of issues. Tony and I tend to view the world from the same perspective."
He went on to say that the aim of BT's retail division was to look at ways of expanding the number of services on offer to customers.
"We see our job as all about connecting people -- to each other and to the world at large, via the internet or television," he said.
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