The temporal evolution of the current-driven electrostatic ion-cyclotron (CDEIC) instability is investigated in the presence of a transverse dc electric field in a collisional magnetized plasma. It was found that the inclusion of a transverse dc electric field in addition to the magnetic field changes the dispersion characteristics of the ion cyclotron waves. The growth rate of the instability increases with the mode frequency and has the largest value at the mode frequencies 43 kHz (for omega much greater than k(z)v(te)) and 7.53 kHz (for k(z)v(ti)much less than omega much less than k(z)v(te)) when the electron drift velocity is less than the critical value for the CDEIC instability. The growth rate also increases with the guide magnetic field and has the largest value at the magnetic fields 1.0 kG (k(y)rho(i)similar to 0.35) for omega much greater than k(z)v(te) and 0.1 kG (k(y)rho(i)similar to 0.2) for k(z)v(ti)much less than omega much less than k(z)v(te). The growth rate is a sensitive function of electron collision frequency. The results of the theory are applied to explain some of the experimental observations of Koepke [IEEE Trans. Plasma Sci. 20, 631 (1992)]. (C) 2000 American Institute of Physics. [S1070-664X(00)01602-5].