CAPITOL ROUND-UP

P> The Federal Communications Commission has begun a major review of its universal services rules as part of an effort to build a new universal service regime for the information age. Among the proposals are an extension of existing charges levied on telephone companies to the entire telecom industry. If enacted, the charges would be levied on on-line and Internet access providers.

Industry has begun lobbying hard against a White House proposal that would end a tax break for company employees based overseas. Scrapping the tax break would generate up to $9.6 billion during the next seven years, according to White House estimates. But the industry's Section 801 Coalition is trying to prevent the change. A study it commissioned found that it would cost the economy 6,800 jobs and $8.7 billion per year. The coalition includes companies such as United Technologies Corp., Hartford, Conn., and many overseas U.S. chambers of commerce.

The Business Software Alliance is expanding its lobbying efforts with the creation of its new Policy Council. The council is backed by the nation's largest commercial software developers such as Microsoft Corp. and Apple Computer Inc. This diverse group is united by several interests, including the suppression of software-piracy and the rollback of government controls on encryption technology.

John Deutch, the nation's intelligence chief, is making progress in gaining greater controls over the nation's intelligence budget, estimated at $29 billion per year. Deutch's efforts were bolstered by congressional support, especially after legislators discovered that the Pentagon's National Reconnaissance Office had quietly put away a few billion dollars of already appropriated cash for a rainy day. Without the changes, Deutch has little power to coordinate spending by the nation's spy agencies.

The Commerce Department has published its new high-tech export rules, implementing last year's White House decision to relax the regulations. The four-tiered regime eliminates paperwork required for roughly $10 billion in annual computer sales and allows easy export of powerful computers to Russia, Vietnam and other once-pariah states.