Senior citizens and consumer advocates yesterday sharply criticized a Chesapeake & Potomac Telephone Co. proposal to put the brunt of a $31 million D.C. rate increase on residential customers. They also called the company's plan for a telephone lifeline program too restrictive.

The Public Service Commission awarded C&P a rate increase of $31 million last summer and now is examining proposals from C&P, the Office of the People's Counsel, which represents consumers in the District, and the PSC staff for distributing the higher costs to customers.

"The rates proposed by C&P are so one-sided that the burden falls on those that can least afford it -- the elderly and handicapped," said John Mebane, president of the D.C. Citizens Clearinghouse, at a community hearing yesterday. "The Public Service Commission needs to seriously consider the rate design proposed by the Office of the People's Counsel.

"Do not increase residential rates; increase business rates," he said.

E. Veronica Pace, executive director for the D.C. Office on Aging, said the lifeline plan proposed by C&P should not limit the amount of calls senior citizens can make and penalizes senior citizens who live on fixed incomes not quite low enough to be certified for the program.

"The telephone is a lifeline, a means by which seniors can secure transportation, arrange medical appointments, order groceries, communicate with family and friends, and secure emergency services," she said. "This is not something that should be limited."

C&P spokesman Web Chamberlin said the PSC is allowing the phone company to "move toward cost-based pricing" after business rates subsidized residential rates for many years. "We think the rates are fair and equitable and will move us towards the authorized rate of return," he said. "The business customer is paying on a cost basis, and the residential customer is not."

The Office of the People's Counsel has proposed to keep rates for residential customers essentially where they are today, with just slight increases, and to put the brunt of the increase on business lines, which it says should cost $18 a month instead of the $10.91 a month that C&P has proposed.

"The Office of the People's Counsel continues to believe residential customers are being made to pay for business costs and that the lifeline rate is too restrictive because it is limited to low-income elderly," said Suzanne Crowell, an OPC spokeswoman.

Under C&P's proposal, residential rates would increase by between 16.6 and 125 percent, depending on the class of service, while business rates would increase by between 15.3 and 22.4 percent. The only class of business service that would rise considerably would be charges for semipublic coin phones, which would go up by 155.8 percent, or from $8.60 to $22 a month.

Metropolitan flat-rate service would rise 16.7 percent, from $12.49 to $14.56 a month. District flat-rate service, which charges extra for calls placed outside the District, would rise 97 percent, or from $6.38 to $12.57 a month; measured areawide service would increase 56.7 percent, or from $6.38 to $10 a month. Calls after the first 60 still would cost 6.9 cents each. Economy service would increase by 125 percent, or from $3.11 a month plus 6.9 cents per outgoing call to $7 a month plus 6.9 cents per call.

Coin phone rates would stay the same: 15 cents. Directory-assistance calls would rise 25 percent, or from 20 to 25 cents, and residential installation charges would rise 50 percent, or from $25 to $37.50.

C&P has proposed an "economy 2" service, better known as "lifeline" service, that would cost $4 a month. It would include 30 calls, plus an additional 6.9 cents per call after the initial 30 calls. Senior citizens would have to be 65 years of age or older and be certified by the D.C. Energy Office to be eligible for the service. For a family of one, maximum annual income to qualify would be $9,330; for a family of six, maximum income to qualify would be $18,570.

Under the C&P proposal, rates for business lines would increase 15.3 percent, or from $16.05 a month, including 110 calls, to $10.91 a month with no free calls. Calls above the 110-call limit now cost 6.9 cents. Under the proposal, all calls would cost that amount. Additional line charges would increase 21.6 percent, or from $8.97 a month plus 6.9 cents per call to $10.91 a month plus 6.9 cents.