A bitter, prolonged dispute over competition to dispute that has sharply divided the Federal Communications Commission from the Justice Department and its Anti-trust Division - is before the Supreme Court for the second time this year.

The dispute centers on Execunet, the MCI Telecommunications Corp. Service that lets a subscriber connect, via microwave transmission, to any phone in a distant city where MCI operates.

Joined by the American Telephone & Telegraph Co. and the United States Independent Telephone Association, the commission wants the court to review a decision that clears the way for continued competition by Execunet and similars ervices with AT&T.

Along with MCI, however, Solicitor General Wade H. McCree Jr., speaking "for the United States," urges the court to preserve the so-called "Execunet II" decision, which was handed down in April by the U.S. Court of Appeals for the District of Columbia.

FCC General Counsel Robert R. Bruce, in an unusual reply to McCree, said in a footnote: "Because the Solicitor General obviously does not represent the commission here and because the Department of Justice did not participate in the D.C. Circuit proceedings which led to the Execunet II decision, we question exactly what interests of the United States the Solicitor General legitimately represents in this case."

Washington-based MCI, because it provides only the long-distance part of its service, needs interconnections provided by local phone companies, most of which are in the Bell System.

In 1971, the FCC, under a policy of permitting "private line" communications services to enter the market, authorized MCI to operate a transcontinental point-to-point microwave system.

But in September 1973, just before MCI was to start service between New York and Dallas, AT&T refused to provide interconnections for two particular services. MCI appealed to the commission, which sided with it and, in turn, was upheld by the 3d U.S. Circuit Court of Appeals.

A year later, in a tariff filed with the commission, MCI proposed to offer Execunet AT&T protested that the proposal wasn't the approved private-line service, but direct competition to its own long-distance message phone service. This time, the FCC agreed with AT&T, on the ground that its 1971 decision hadn't authorized Execunet. The agency directed MCI to stop providing the service.

MCI brought the issue to the appeals court here. Ruling for MCI in July 1977, in the "Execunet I" decision, it held that unless the FCC imposes restrictions on service that are found in a formal hearing to serve the public interest, convenience and necessity, a carrier may provide any service over lines for which the agency has provided certificates.

Moreover, the court noted, MCI's certificates don't specify restrictions. But, the court said, the commission is free to start a proceeding to determine whether the public interest would warrant prohibiting Execunet.

Claiming that the decision conflicted with the 3d Circuit's 1973 ruling, the FCC, AT&T and the association each petitioned for review by the Supreme Court. It denied the petitions last Jan. 16.

Within hours, however, AT&T was asking the commission for a declaratory order that it isn't required to provide interconnections for Execunet and similar services. Five weeks later the FCC issued the requested order.

MCI then returned to the appeals court to seek an order for compliance with Execunet I on April 14, the court held 3 to 0, in Execunet II, that MCI had been wronged.

"Having successfully litigated the question of its right to provide Execunet service, MCI certainly has good cause to feel that this subsequent turn of events engineered by the commission and AT&T is strikingly unfair," Chief Judge J. Skelly Wright wrote.

". . . the fact of the matter is that our Execunet [1] decision did clearly contemplate - by virtue of AT&T's representations and actions - that AT&T was required to provide interconnections," he said.

Pointing out that AT&T had provided the interconnections until the Supreme Court denied review in January, and had done so "without any form of protest or objection," Wright said, "Never in the proceedings before this court did AT&T even suggest that it was not required to provide these connections. . ."

In view of this background, Wright continued, "AT&T's current refusal, with the approval of the commission, to provide interconnections to MCI does not simply raise questions for fairness vis-a-vis MCI, it also raises questions as to the propriety of allowing [AT&T, the FCC and the association] to renounce a position and obligation which they assumed throughout the course of the Execunet proceedings."

Although the FCC claimed that it hadn't done so, Wright said, the agency itself, in a 1975 proceeding, had ordered AT&T to provide Execunet interconnections. Quoting the commission, he cited its "broad interconnection order [requiring] Bell . . . to provide interconnection for all of the authorized services of the specialized carriers. . ."

Execunet service having been authorized, Wright said, the commission's declaratory order that AT&T didn't have to interconnect was inconsistent with the Execunet I decision.

There was no inconsistency, the FCC and its allies said in petitions for Supreme Court review. Even Solicitor General McCree, in opposing review, acknowledged that their contentions "are not without some force," and that the commission is "entitled to considerable deference" in the "reading of its own statutes and its assessment of the administrative impact of the decisions below. . ."

Nonetheless, McCree urged the High Court to let the decisions stand, saying that "we do not see how [they] can significantly impair the commission's performance of its statutory responsibility," he added.

"Neither Execunet I nor Execunet II precludes the commission from considering and determining whether the public interest will be served or disserved by MCI's continued provision of the Execunet service."

FCC General Counsel Bruce found McCree's brief "especially troubling" because when the petitions for High Court review of Execunet I were pending, "the solicitor did present the commission with respect to the same commission orders that are now under review, and, at that time, pressed on our behalf an interpretation of those orders that is consistent with our present petition and inconsistent with the Solicitor General's present opposition."