D.C. government witnesses told the Public Service Commission yesterday that District telephone users -- not the city government -- should pay for an updated emergency "911" telephone service.

Last November, Mayor Marion Barry asked the City Council to pass emergency legislation to upgrade 911 service and shift the costs of the system from the D.C. government to telephone users.

The updated service would make possible automatic address identification of a caller so that a small child or injured adult dialing the number could be located even if they could not give the address.

In the District, the current 911 service costs taxpayers $61,200 a year, inspector William R. Arostos, director of the communications division for the Metropolitan Police Department, told the PSC.

J. Lyman Anderson, former C&P assistant vice president for the cost and economics department, said that under the new system phone users would be required to pay $941,000 for new equipment investments the phone company would have to make, and $5.3 million between 1986 and 1991 for operation and maintenance of the new system.

C&P supports telephone users paying for the service through a mandatory monthly surcharge on phone bills but said the PSC should make the final decision on how customers should pay for or receive the service.

The D.C. government proposal, which does not call for competitive bidding for providing the improved service, has not been approved by the City Council. The proposal came under attack by City Council member Betty Ann Kane (D-At Large) yesterday as "part of the same pattern" of the D.C. government awarding telephone contracts to C&P even when other companies might be able to provide such a service for less.

"C&P has politically convinced some people in order to save C&P they must continue to do business with them," Kane said. She said she believes that 911 is a police service, and thus should be paid for by the government, and that the city might get a better price by putting the service up for bids.

People's Counsel Frederick Dorsey, who represents ratepayers before the commission, also said the cost of the service should be borne by taxpayers through the city government, not by phone users.

Dorsey also noted that C&P recently won a commission ruling allowing the company to freeze rates on Centrex business services for five years. He said that since these rates could remain stable, an even larger portion of the 911 burden could fall on residential phone users.

Witnesses testifying on behalf of the D.C. government said all telephone users should foot the bill. "You cannot assign the cost of the new 911 service to criminals," said Tom Weiss, a D.C. government consultant. "The most equitable way of handling this is through the ratepayer."

Weiss also said it is important for a company to be the sole provider of service so it is efficient to maintain and fix the system.

Arostos said the new service would improve efficiency by allowing the police to handle more calls, but might not improve response time to emergency calls because this depends largely on factors like the proximity of emergency vehicles.