European communications commission Viviane Reding yesterday unveiled proposals to reduce the market power of dominant telecoms companies such as Eircom and enhance the protection and rights of consumers across Europe.

The commission is proposing the establishment of a new European authority to ensure that market rules and consumer regulations are applied consistently and without "protectionism" in all 27 member states.

It is also proposing strengthened consumer rights, and wants the extension of broadband services, particularly to rural communities.

The new watchdog, the European Telecom Market Authority, would have the power to override a national regulator's decision regarding a competition issue, if it believes it is inadequate.

The commission argues that technological developments mean there is a need to review regulation, especially as technology is moving away from more traditional fixed-line services that rely on copper-wire infrastructure. Part of this shift would see firms having to separate their network and service businesses.

"Dominant telecoms operators, often still protected by government authorities, remain in control of critical market segments, especially of the broadband market," Ms Reding told the EU Parliament yesterday.

"This restricts consumers' freedom of choice. Ten per cent of EU citizens still have no broadband access at all.

"This is why new consumer rights, a new dose of competition, an effective system of independent telecoms regulators, new investment into competitive infrastructures and more space for new wireless services are needed to put Europe's digital economy on track."

ComReg yesterday welcomed the strengthening of consumer rights, but questioned the interference in national regulation. "These proposals will directly impact on ComReg's ability to intervene in the market," a ComReg spokesman said.

The new regulations must be ratified by parliament before they become law.