That means rates will rise by $5 to $29.50 for home ISDN users. For business users, rates will go up by $7.50 to $33.55, a Pac Bell spokesman said.
Pac Bell had originally sought an $8 monthly increase. The new rates could go into effect in as soon as 20 days.
The case has been percolating for nearly a year. Consumer organizations and computer companies led by Intel fought Pac Bell, which said it needed to raise rates to make the service profitable.
The fight has been monitored by companies and consumers in other regions anxious to see what precedent, if any, would be set. California accounts for more than 33 percent of the nation's Net access.
"We're not to happy with the increase. We still contest their cost study as being flawed and pretty much useless," said Barry Fraser, staff counsel for the Utility Consumers' Action Network. "Pac Bell's lack of quality service is reason enough not to grant the rate increase."
The PUC said it would impose penalties if Pac Bell doesn't meet minimum service guidelines. For example, each time the phone carrier misses an ISDN installation appointment, the company must credit the customer $25.
The company must reduce its installation charge by ten percent for each day after ten business days it fails to install the service and must waive the charge entirely if it is not installed within 15 business days.
Pac Bell also must credit customers $5 for each day that repairs are not made, starting 24 hours after the customer reports a problem. The repair rebates will not take effect until May.
Customers will get 200 free off-peak usage hours between 5 p.m. and 8 a.m. and on weekends. The cost is 1 to 3 cents per minute outside those hours.
"We thank the commission for its works and accept its decision in appreciation," said Tom Bayless, director of switch digital services for Pac Bell. "However, we disagree with the principle of the service incentives in the tariff."