PUC Reduces Restrictions on Caller ID : Telecommunications: But the state’s phone firms say the changes might not be enough to make offering the service worthwhile economically.

The California Public Utilities Commission on Monday eased some restrictions on a controversial proposed telephone service that allows subscribers to identify callers before they pick up the phone.

But the state’s phone companies said the changes might not be enough to make offering the service worthwhile economically, given the restrictions that remain or could be imposed later.

“I’m encouraged by the words I see,” said Michael J. Miller, Pacific Bell’s vice president for regulatory affairs, “but we can’t really say until we look at the order . . . and do some more economic analysis.”

That process could take a couple of weeks, he said.

The PUC voted 3 to 1 to allow Pacific Bell, GTE California and Contel to offer Caller ID with two free blocking options for customers: per-call blocking and per-line blocking. Customers could choose to block their numbers each time they placed a call, by punching in a special code. Or they could block their numbers on all calls from their phone.

The commissioners also said they would hold a “limited rehearing” on the technical feasibility of a third option that would allow customers to block the entire line but selectively unblock it by pressing a special code.

In June, the PUC had voted to require all three options. But it agreed to reconsider the third alternative after the phone companies complained bitterly that it would make compliance impossible.

Pacific Bell said in a July filing that developing the technical capability to offer that option would take three years.

The Caller ID service displays a caller’s phone number on a small box attached to the phone of the person being called. Customers would pay for the extra equipment and be charged monthly for the service.

Pacific Bell and other phone companies say Caller ID could help solve the problems of anonymous threats and harassing calls. But consumer activists say the service, first offered in New Jersey in 1987, invades callers’ privacy.

Toward Utility Rate Normalization, a San Francisco consumer group, said it was mostly pleased with the PUC’s decision Monday to order a rehearing on the third option. If the PUC decides after hearing additional evidence that the third option or something comparable is feasible, it could then reimpose that requirement.

“They could have done a lot worse things to this decision,” said Melia Franklin, a TURN spokeswoman. “There was a lot of pressure (on the commissioners) to undo per-line blocking.”

The group also praised the PUC’s decision to stick with a requirement that parties with unlisted numbers be given per-line blocking by default.

Telephone companies had argued that per-call blocking, already mandated by California law, offered the most balanced solution to privacy concerns on the part of those placing and receiving calls. The other options, they contended, would defeat the purpose of caller identification.

GTE California and Contel said they would have to review the order before deciding what to do.

“Everything depends on what happens at the rehearing,” said Larry Cox, a GTE California spokesman.

In its Monday order, the PUC removed a smaller potential stumbling block by easing requirements that phone companies educate consumers statewide about the new services. The commission agreed to allow the companies to conduct education programs only in the geographical areas where Caller ID would be offered.

Pacific Bell initially said it planned to first offer the service only in the Los Angeles and San Francisco areas.