Operators must give just 56 days' notice before they launch services on new routes, change timetables, or axe routes.
As a result, popular routes become congested with buses run by rival firms, while councils fork out expensive subsidies on less-used services - or risk losing them altogether.
Legislation already exists to allow town halls and passenger transport executives, such as Merseytravel, to impose a "quality contract" by picking a single operator. But no authority has been able to meet the stringent tests in the existing law that insists the change must be the "only practicable solution".
Now that strict test will be removed, allowing authorities to hold a competition to pick an operator - and to bar all others from competing.
But the announcement is likely to be greeted with protests from the big bus firms which have made lucrative profits from deregulation.
To calm that anger, Mr Alexander will demand authorities prove they are putting in extra bus lanes and other bus-friendly measures in return for new powers.
Today's consultation will also pledge to boost the powers of regional traffic commissioners to penalise poorly-performing bus firms and local councils.
And it will outline ways to make it easier for community groups, particularly in rural areas, to set up their own bus services where the big firms have opted out.
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