Chesapeake and Potomac Telephone Co. has told the D.C. Public Service Commission that it did not notify the PSC of a marketing problem that could mean an increase in residential phone rates because it already had sought to resolve it.

C&P had sought PSC approval last spring to lower rates for its Centrex business service, which provides large commercial and government users with private telecommunications services. The company argued that it needed the lower rates to remain competitive and that failure to remain competitive would cause an increase in residential rates.

What it did not say was that another problem also might result in a rate increase for basic telephone service of as much as $3 a month.

The PSC last week asked C&P why it had not informed the agency of the problem, which involves marketing Centrex business service to the federal government.

To resolve the problem, the Federal Communications Commission would have to allow C&P to market Centrex business service and equipment to the General Services Administration so C&P can retain about $23 million in annual revenue from Centrex.

The federal government is seeking a new telecommunications system, but has specified it wants a single-source provider of services and equipment. The FCC prohibits regional telephone companies from doing so. Bell Atlantic Corp., C&P's parent, has asked the FCC to allow C&P to act as a contractor.