United Press International, the news wire service whose financial strains in recent years have caused it to be commonly referred to in other media as "struggling UPI," recently beat out telecommunications giantMCI to land a $2.5 million contract to distributedata overseas for the United States Information Agency.

"Struggling UPI to Transmit USIA Views Overseas," cried the headline in The Washington Post {Oct. 12}. "Questions of ethics and credibility arise."

A small selection of journalists, professors and other observers of the press is then quoted as voicing various degrees of distress or disapproval over this link between a wire service and the government.

What exactly is all the fuss about?

Simply this: it seems that in the world of Star Wars, fiber optics and supercolliders, the USIA still relies on photocopiers and bicycle messengers to distribute official government news releases, White House and State Department pronouncements, texts of speeches and other information to newspapers, national press agencies and broadcasters overseas. If such a primitive form of transmission were used in this country, it would be the occasion for laughter.

Here at home, not only government but private hucksters have access to that most valuable tool in the publicist's arsenal: the teleprinter. For a fee, such private leased-wire networks as the P.R. Newswire and the Business Wire will distribute a news release to hundreds, even thousands, of news outlets -- newspaper, radio and television stations, networks, etc. The service is instantaneous, inexpensive and efficient. It saves time and trouble for everyone, including the reporters and editors who receive the material and use it as at least the starting point of many of the stories that find their way into print.

And how do these agencies do it? How does P.R. Newswire reach all those newsrooms across the country? The answer is that they do it through the facilities of that paragon of journalistic virtue and rectitude, UPI's competitor, the Associated Press, the huge not-for-profit wire service owned by America's newspapers.

AP maintains one of the largest private communications networks in the world and milks it for every penny it can get from private communications clients. Besides having a corner on the press release market, AP distributes a sports scores service, a commodity quotations wire, a farm-news wire and many more. It provides the North American communications net-work for Reuters, the hugely profitable British financial-services company that runs a news service on the side.

In fact, although AP doesn't talk much about it, it won a multimillion-dollar contract several years ago to set up a communications operation for none other than Tass, the Soviet news agency.

The fact is that both of us, UPI and AP, distribute millions of words a day for the news and feature syndicates of the world, including -- in UPI's case -- The Los Angeles Times-Washington Post News Service, the Washington Post Writers Group, the New York Times Syndicate, the Copley Syndicate, the McClatchey Group and McGraw-Hill Publications. Then there are the smaller international accounts -- Tanjug (the Yugoslav agency), the South Korean Press Association and DPA, the German Press Association. UPI links their bureaus and distributes their copy.

Frankly, none of this is hugely profitable, but it's our business after all -- communications and, more specifically, journalism.

All of which brings us back to "Struggling UPI" and the USIA's desire to modernize its overseas communications so foreign journalists can get the U.S. side of the story before it's old news.

The USIA calls the new service The Wireless File. It's the result of a lengthy study conducted by retired AP executive Jack Kohler and others. Working as a consultant to USIA, Kohler visited more than 100 newspaper editors and broadcasters in other countries to refine the concept.

"All of them said there was a big need for getting the full text of speeches and pronouncements from Washington directly into their newsrooms and, in many cases, right into their computers," Kohler said. "The foreign press needs this service badly. It's information that's essential for them to do their jobs."

After terrorists shot up the Rome airport in December 1985, Kohler recalled, the U.S. State Department published a White Book on terrorism. "The European papers wanted that State Department report badly, but it took three days for the full text to get to them with the antiquated system they have now. The Wireless File would have gotten it to them the same day," Kohler said.

So what's this fuss really all about? It's about a fairly pedestrian project that involves pretty ordinary technology to solve a simple problem.

As I said before, it's not the sort of thing that's particularly profitable for a wire service, and if anyone says it will affect our coverage of the news, he's talking through his hat. -- James R. Hood The writer is a vice president of United Press International.