UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) July 1, 1997
ELCOTEL, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-15205 59-2518405
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(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
6428 Parkland Drive, Sarasota,Florida 34243
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(Address of principal executive offices) (Zip Code)
(941) 758-0389
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(Registrant's telephone number, including area code)
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Item 5
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On July 1, 1997, the United States Court of Appeals for
the District of Columbia Circuit issued its decision on appeals of
certain portions of an order (the "Order") issued in September, 1996
by the Federal Communications Commission ("FCC") changing the
regulatory regime for the payphone industry pursuant to the
Telecommunications Act of 1996. This decision may have a
significant effect upon the business and operations of the
Company's customers. The Telecommunications Act of 1996 requires
that the FCC establish a per call compensation plan to ensure that
all payphone service providers are fairly compensated for each and
every completed intrastate and interstate call using their
payphone.
In the Order, the FCC had decided that the compensation
rate for access code calls and subscriber 800 and other toll free
calls should be equal to the deregulated local coin call rate. The
FCC had also established an interim compensation plan whereby
compensation for access code and subscriber 800 calls would be paid
to payphone service providers. Under the first phase of the FCC's
interim compensation plan, payphone service providers would be
compensated at a flat rate of $45.85 per payphone per month (based
on $.35 per call multiplied by 131, the average number of 800 and
access code calls per payphone per month). During the second phase
of the interim compensation plan, payphone service providers would
receive $.35 per 800 or access code call.
However, the Court ruled that the FCC was unjustified
in setting the per call compensation rate at an amount equal to the
deregulated local coin rate. The Court remanded to the FCC for
further consideration the issues of compensation for 800 and access
code calls both on a permanent and an interim basis. The Court
also ordered that interim compensation for 0+ calls be included in
the interim compensation plan.
The Court upheld the FCC's authority to regulate the
rates charged for local coin calls(thereby eliminating state
limitations on such rates) and the FCC's decision to require the
carrier rather than the calling party to pay the compensation to
payphone service providers for 800 and access code calls.
Pending action by the FCC in accordance with the terms of
the Court's remand, it is uncertain whether payphone service
providers will continue to be paid any interim compensation or at
what levels such interim compensation may be paid. Significant
reductions in the amount or delay in the payment of interim
compensation may reduce demand for the Company's payphones and the
ability of the Company to collect its receivables from such
customers. The Company has been advised that at least a portion of
such interim compensation of $45.85 per month may continue to be
paid pending further FCC action on this matter.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ELCOTEL, INC.
Dated: July 10, 1997 By: /s/ Ronald M. Tobin
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Ronald M. Tobin
Chief Financial Officer
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