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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 29, 2000
ITC/\DELTACOM, INC.
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(Exact Name of Registrant as Specified in Charter)
<TABLE>
<S> <C> <C>
Delaware 0-23253 58-2301135
(State or Other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
</TABLE>
<TABLE>
<S> <C>
1791 O.G. Skinner Drive
West Point, Georgia 31833
(Address of Principal Executive Offices) (ZIP Code)
</TABLE>
Registrant's telephone number, including area code: (706) 385-8000
Not applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
ITC/\DeltaCom, Inc. has reached a settlement with BellSouth of
ITC/\DeltaCom's long-standing dispute over BellSouth's payment of reciprocal
compensation for local calls placed by customers of BellSouth and terminated to
customers of ITC/\DeltaCom, including calls terminated to ITC/\DeltaCom's
Internet service provider customers. The agreement provides for the settlement
of all amounts claimed by ITC/\DeltaCom to be due for past reciprocal
compensation at rates consistent with or in excess of amounts previously
recognized by ITC/\DeltaCom as revenue, as well as establishes rates for all
reciprocal compensation traffic on ITC/\DeltaCom's network for the balance of
2000, for 2001 and for 2002. The terms of the settlement agreement are not
subject to modification by changes in law or subsequent FCC, court, or state
commission decisions.
The agreement also resolves compensation issues related to Multiple
Tandem Access and compensation for local interconnection trunks and facilities,
which will assist ITC/\DeltaCom in expediting the closure of current
interconnection agreement arbitrations related to those issues.
The settlement agreement provides for a cash payment of approximately
$53 million to be made by BellSouth on or before October 9, 2000. This payment
will represent payment for reciprocal compensation amounts previously billed to
BellSouth and for estimated reciprocal compensation billings for 2001. The
portion of the payment related to 2001 is subject to reconciliation procedures
beginning in July 2001 to determine whether the expected reciprocal compensation
traffic amounts upon which the prepayment is computed have been realized.
The settlement agreement also provides for the prepayment by BellSouth
of an additional amount to ITC/\DeltaCom in December 2001 related to expected
reciprocal compensation traffic levels in 2002. This additional amount also will
be subject to reconciliation procedures based upon the actual amount of
reciprocal compensation traffic during 2002.
In addition, ITC/\DeltaCom has agreed to cap its reciprocal
compensation received from BellSouth at $27.5 million in 2001 and $29.5 million
in 2002. BellSouth and ITC/\DeltaCom have agreed to bill each other $.00175 per
minute of use during 2001 and $.0015 per minute of use during 2002.
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ITC/\DeltaCom anticipates that this settlement agreement will result
in the recognition by ITC/\DeltaCom of a net benefit of approximately $12
million in the third quarter of 2000 of previously unrecorded
amounts related to 1999 and other prior periods. The settlement will also
eliminate any outstanding receivables related to 2000 amounts which have been
recognized by ITC/\DeltaCom at $.002 per minute of use. No adjustments will be
required for amounts previously recorded in 2000.
Attached as Exhibit 99 to this Current Report on Form 8-K is the text
of ITC/\DeltaCom's October 2, 2000 press release relating to this matter, which
is incorporated by reference in this Item 5.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
99. Press Release, dated October 2, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ITC/\DELTACOM, INC.
Date: October 2, 2000 /s/ J. Thomas Mullis
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J. Thomas Mullis
Senior Vice President - General Counsel,
Secretary
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