But the idea is already garnering criticism from rivals and some of the Baby Bells, which claim the companies that want to run the oversight agency are in fact some of the worst "slamming" offenders.
So-called slamming is the practice of illegally switching a consumer's telephone service provider without explicit permission. It has been the subject of growing concern in Congress and in regulatory bodies over the last year. In response to increasing complaints, the Federal Communications Commission adopted a new set of rules helping consumers win compensation in late 1998.
Under federal rules adopted late last year, carriers must resolve disputes over customers' service changes between themselves, and refund consumers the difference between any illegal and legal charges on phone bills.
"That leaves the companies themselves to work out complaints," said Peter Lucht, an MCI WorldCom spokesman. "You can imagine how that would lead to delays and even litigation."
A third-party private sector agency set up specifically to handle complaints would move more quickly, Lucht and the other companies say.
Under the proposal, the new anti-slamming arbitration body would have 30 days to determine whether a customer had in fact been slammed.
If the service switch was illegal and the caller had paid the new carrier, the offending carrier would have to send the entire payment to the consumer's original company. The original carrier would then give half the payment back to the consumer in the form of a credit.
For the plan to work, most of the biggest telephone companies would have to be a part of the new organization. The proposal calls for funding from the industry, and representation of long distance companies and the big local companies on its board of directors.
But most of the Bell companies said they have not been consulted, despite the proposal's effect on their business. Some were immediately critical, charging that the long distance companies are themselves the worst slamming offenders.
"It's like elephants deciding how to divvy up pieces of peanuts," said David Beigie, a spokesman for US West. "The best thing the long distance companies can do is to stop the practice."
The FCC must approve the proposal before it can go into effect. Approval will likely require broad industry support, however.