The D.C. Public Service Commission voted to approve the use of Caller ID but only if residents are offered the right to stop their numbers from showing up on devices that display the origin of incoming calls.

Caller ID has been perhaps the most controversial phone service to be introduced in recent years -- raising questions about whether devices that display the phone numbers of callers violate privacy and wire-tapping laws.

The PSC, in its vote Tuesday, attempted to reach a compromise on the issue but concluded that the service does not violate federal or District laws.

"The commission's decision strikes a balance between two diametrically opposed views," said Howard Davenport, general counsel of the PSC.

In the view of Bell Atlantic Corp., however, the PSC may have gone too far in attempting to appease both sides. Because part of the purpose of Caller ID is to help people identify obscene or harassing callers, giving people who make such calls the option of having them blocked dilutes the effect, said Bell Atlantic spokesman Ken Pitt.

The commission gave Chesapeake & Potomac Telephone Co., a subsidiary of Bell Atlantic, 10 days to file data regarding the cost of per-call blocking. Once that information is received, the commission will decide what charge, if any, will be associated with providing the per-call blocking option. Blocking is done by punching in a four-digit number on the telephone.

Evan Hendricks, editor and publisher of Privacy Times, a biweekly newsletter, said the "commission reached a reasonable compromise on privacy and service."

He added, however, that there are still serious concerns about whether Caller ID violates wiretap laws and advised Bell Atlantic to "heed the message that is coming, instead of ramming" the service on consumers.

So far, Caller ID has been banned only in Pennsylvania, after a state court ruled that the service violates wiretap laws. In California, a law was passed that provides for blocking when the Caller ID service is offered. New Jersey, where the service was first introduced in 1987, Vermont, Virginia and Maryland allow the service without blocking requirements.

There is also a bill pending in both houses of Congress that would authorize the use of Caller ID with blocking.

Hearings on the issue are expected to start at the end of July or early August.

Davenport said that it is still too early to say whether the commission's decision will be appealed. He added, however, that they will know in the next 60 days.

Michel Daley, a spokesman for C&P, said that for its part, C&P will not appeal the PSC decision.

The D.C. Office of the People's Counsel may appeal, arguing as it had earlier that the service violates the Electronic Communications Privacy Act.

Daley said that the firm has received some 6,000 inquiries about the service. He said that C&P cannot yet say when the service could be available in the District, pending the PSC decision on who will carry the cost of the blocking requirement.

In Tuesday's decision, the PSC also approved C&P's request to offer return call service, which allows subscribers to return their last incoming call without knowing the caller's number.