The European Commission courted controversy Tuesday afternoon, after unveiling plans to create a European “super regulator” for the region’s telecoms market.

Although it had been highly anticipated, the proposal masterminded by the European Commissioner for Information Society and Media, Viviane Reding, looks certain to cause disruption among the operator and regulator communities.

The planned European Telecom Market Authority would be designed to support the Commission and national telecoms regulators in ensuring that market rules and consumer regulation are applied consistently, independently and without protectionism in all 27 EU Member States.

It looks for all intents and purposes that the super regulator would have the power to overrule the 27 national regulators. At the very least, the body would replace the European Network Information Security Agency (ENISA) and the European Regulators Group (ERG), which the EC branded a “failure”.

But the national regulators themselves would also be given new powers in a bid to free them from pressures imposed by local governments. The watchdogs would be encouraged to impose functional separation on incumbent operators in dominant positions, splitting their network and retail units in a similar way to the break up of BT in the UK.

But Alex Brown, telecoms partner and Jenny Block, EU Competition and Regulatory partner at law firm Simmons & Simmons warn that one of the main concerns about the creation of a pan European industry body is that it will merely create a further layer of bureaucracy and regulation. “The proportionality of this solution, against the alternative of merely strengthening the role of the European Regulators’ Group, will be scrutinised carefully. Its remit appears to be very broad, and to allow for considerable intervention in the work of the NRAs,” the lawyers said.

Reding warned that dominant telecoms operators, “often still protected by government authorities, remain in control of critical market segments, especially of the broadband market.

“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.”

Reding sees the European regulator as a power which could swiftly bring about changes reminiscent of her own victory over mobile roaming charges.

“Creating an appropriate mechanism for licensing of pan-European services is long overdue, but the devil will be in the detail and successful implementation may be rather a long time coming. In principle, this should address market fragmentation, lack of consistency and relieve an administrative burden on cross-border service providers,” said law firm Simmons & Simmons.

A “Telecoms Reform Package”, presented by the Commission to the European Parliament in Strasbourg today, will change the EU Telecoms Rules of 2002 and is expected to become law by the end of 2009.

New consumer rights proposed in the package:

“Telecoms is a field where our single market can bring about very concrete results for every citizen in terms of more choice and lower prices, whether for mobile phones or for broadband internet connections. At the same time, a single market with 500 million consumers opens new opportunities for telecoms operators – if Europe helps to ensure effective competition and consistent rules of the game,” said Jose Manuel Barroso, president of the European Commission.