With a little fanfare, the House communications subcommittee, which was moving rapidly toward passage of controversial amendments to the Communications Act, stopped the other day to consider and argue about one particular issue.

That issue was a proposal to provide money to consumer and business groups who need resources in order to participate in proceedings before the Federal Communications Commission and a transitional board to monitor telephone access charges.

The amendment was passed by an 8-5 vote, but only after the most scorching debate in the entire mark-up session, a meeting that resulted in the 13-to-1 passage of the legislation.

Although literally billions of dollars and the fate of the burgeoning telecommunications industry are at stake in the bill, H.R. 6121, only $1.25 million is at stake in public participation funding.

But as a result of some controversy that has surrounded a public participation program at the Federal Trade Commission and as a result of the increasing successes of the business community in defeating consumer group initiatives, the question of intervenor funding has quietly become a hot issue on Capitol Hill and at federal regulatory agencies.

The proposal passed by the House subcommittee on Tuesday provides a one-year authorization of $750,000 for parties hoping to appear before the FCC and another $500,000 for those who can demonstrate they need money to appear before the new transitional board.

The vote was viewed as a victory for representatives of Congress Watch, the Ralph Nader lobbying group, and Consumers Union, who have fought for public participation funding in a number of bills.

"This proposal is particularly important because of the dramatic changes that will come about in telephone companies as a result of the bill," said Howard Symons of Congress Watch.

Symons also said that the House subcommittee vote "has got to help" funding measures before other congressional committees because it demonstrates that it is a "viable regulatory tool."

But the success of the measure in the House subcommittee also could provide an encouraging signal for the consumer group forces seeking to maintain the funding provision in regulatory reform legislation, which is nearing action before two Senate committees and is expected to be considered soon in the House.

A regulatory reform bill currently before the Senate Governmental Affairs committee includes a provision for $20 million for people wanting to participate before the 37 federal agencies that are members of the Regulatory Council.

Sen. John Culver (D-Iowa), the principal sponsor of another regulatory reform bill before the Senate Judiciary Committee, has lifted the public participation section from his legislation and introduced a separate funding bill.

Culver acted after considerable political opposition to the funding measure from business groups and because of a trade-off among members of the coalition supporting the bill. Culver agreed to drop the provision if other subcommittee members dropped their insistence on an equally controversial legislative-veto measure.

In addition, Sen. Jacob Javits (R-N.Y.) is planning to offer an amendment to the bill before the Government Affairs panel authorizing $60 million over a three-year period to fund citizen intervenors.

Further, the question of whether the government ought to fund these groups and individuals is also a part of legislation before the full Senate that offers sweeping changes in the FTC's mandate.

But in the context of the broad regulatory reform legislation, advocates of the concept see public participation fundinging as vital. First of all, the bills could lose consumer group support without the funding provisions.

Secondly, and even more important, some Senate sources believe, is that under the new legislation -- which sets up eleborate cost-benefit tests of new regulations -- it will be even harder to challenge agency actions in light of the new sophisticated examination of new rules that he bill set up.