Opening a public hearing on telecom deregulation, competition commissioner Mario Monti said progress remained "extremely disappointing" despite years of efforts to increase competition, especially among providers of high-speed broadband service.
He said his office may soon "expand its field of action" to investigate new complaints of discrimination and "ensure a level playing field between all actors on the market."
Monti was urged on by Germany's Arcor and QSC, France's Cegetel, Italy's Wind and Cable & Wireless of Britain.
"Unless urgent action is taken, incumbents will shamelessly continue to pre-empt the market to the detriment of new entrants," the chief executives of the five companies said in a joint letter.
EU regulators opened a formal investigation last May into Germany's former monopolist Deutsche Telekom AG, accusing it of trying to force new companies off the market with "unfair pricing practices" for access to the local fixed lines.
France Telecom's Wanadoo unit came under investigation in December for allegedly undercutting its competitors.
Monti's spokeswoman, Amelia Torres, said the latest, informal complaints were "not so much about prices, but more about the conditions at which new entrants are allowed to install equipment in the premises of current dominant players."
She said they were concerned about inferior services, delays and unjustifiable conditions placed on newcomers in several EU countries.
"I believe that there is no smoke without fire and that the numerous complaints by access seekers at national and European levels do reflect actual competition problems," Monti said in his speech.
EU officials see deregulation of the last mile of wire connecting homes and businesses as crucial to bringing down Europe's relatively high telephone charges and promoting broadband access to the Internet.
But more than two years after EU leaders identified an "urgent need for Europe to quickly exploit the opportunities of the new economy and particularly the Internet," Monti said "the overall picture is still bleak."
In many countries, incumbent telephone operators had made such poor progress that Monti dismissed their efforts "merely experimental."
While acknowledging that many telecommunications companies are suffering financially since the bursting of the Internet bubble, Monti said that only made keeping markets competitive "more crucial."
Apart from the corporate complaints, the Commission already has cases against Germany, Greece and Portugal for failing to allow adequate access to newcomers.
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