C&P Telephone Co. of Maryland asked the Maryland Public Service Commission yesterday to approve rate increases of 14.8 percent for most services and products.

The telephone company -- which also has rate increases pending in the District of Columbia and Virginia -- would gain about $71.4 million in annual revenue from the proposed rate increase' which would raise most residential rates by at least $1.12 a month. The company also asked for an increase in its allowable rate of return.

C&P blamed the need for increased rates on rising costs and noted that this is the first increase requested since 1977.

The proposed change in the tariff would add between $1.47 and $1.56 to the monthly bills of residential customers in Montgomery and Prince George's counties who use the company's flat-rate service. Customers who use measured service would pay an additional $1.12 each month.

Basic monthly rates for economy service would increase by 67 to 76 cents with the charge for each local call rising to 8 cents.

Business customers would pay between $1.03 and $1.11 more on basic monthly service and a penny more for each call.

The requested rate change also would mean an increase in the cost of installation for residential and business customers.

If the rate increase is approved, it will yield a rate of return between 11.56 percent and 12.11 percent compared with the rate of return between 9.7 percent and 10.1 percent now allowed the company.