In a joint statement from Israel's police and the Israel securities authority, police said they also found sufficient evidence to charge Mr Netanyahu's family friend, Shaul Elovitch, with bribery.
The Bezeq case, known as Case 4000, is the most serious of all those of which Mr Netanyahu has been accused.
It's believed that Netanyahu fired Communications Ministry Director-General Avi Berger and hired his loyalist and ex-campaign manager Shlomo Filber in order to provide Elovitch and his companies special treatment.
Sunday's decision followed a lengthy investigation into a case involving Netanyahu's relationship with Shaul Elovitch, the controlling shareholder of Israel's telecom giant Bezeq.
Denying the charges today, Netanyahu said: "There was nothing because there is nothing".
Both Netanyahu and Elovitch have denied any wrongdoing.
Shortly after the police recommendations were made public, Netanyahu issued a statement saying that the allegations had no legal basis and that ultimately nothing would come of the investigation.
"These recommendations were decided upon and leaked even before the investigation began".
The police recommendations are non-binding.
"There was nothing because there is nothing", he concluded.
They accuse the prime minister and Bezeq boss Shaul Elovitch, who they also recommend be charged, as having shared a "bribe-based relationship" which saw Mr Netanyahu and his associates intervene in news coverage on an nearly daily basis.
Most of Netanyahu's coalition partners have said they will wait for a decision by the attorney-general before making any decisions about how to react to the allegations.
He is also suspected of negotiating favorable press coverage with the Yedioth Ahronoth publisher Arnon Mozes in Case 2000.
Investigators have questioned Netanyahu several times in connection with this case, partly based on the testimony of Nir Hefetz, a former adviser to the prime minister who turned witness. Mr Netanyahu is in his second stint as prime minister. "Elections now!" she said.
Other opposition parties quickly joined in the call for Mr Netanyahu to resign.
"Netanyahu must go home before he destroys the law enforcement in order to save his own skin". "A person with such a sickly obsession with what the media says about him must not lead the State of Israel".
"A prime minister with so many criminal cases around him can not continue in his job and must resign", said Avi Gabbay, the head of the Labor party.