U. S. SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549


FORM 10-QSB
(Mark One)

[X]	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE ACT OF 1934

For the quarterly period ended         September 30, 1996                    	


[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE ACT OF 1934

For the transition period from ________________________ to___________________

Commission file number	0-18654

AMERICONNECT, INC.

(Exact name of small business issuer as specified in its charter)

Delaware									48-1056927

(State or other jurisdiction of incorporation or organization)		(I.R.S. 
Employer Identification No.)


6750 West 93rd Street, Suite 110, Overland Park, KS 				66212

(Address of principal executive offices)							(Zip Code)

(913) 341-8888 
(Issuers's telephone number, including area code


		(Former name, former address and former fiscal year, if changed since last 
report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such 
shorter period that the registrant was required to file such reports), and (2) 
has been subject to such filing requirements for the past 90 days.  
Yes    X   	No ____

State the number of shares outstanding of each of the issuer's classes of 
common equity, as of the latest 
practicable date:

As of October 7, 1996, the Issuer had outstanding 6,342,361 shares of Common 
Stock and 592,033 shares of Class A Common Stock.

Transitional Small Business Disclosure Format (check one):
Yes     		No  X 


	PART 1 - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AMERICONNECT, INC.
Consolidated
Balance Sheets



	ASSETS               

<TABLE>
<S>                      <C>                            <C>
                             September 30, 1996              December 31, 1995
                                Unaudited

CURRENT ASSETS



  Cash 
                              $  287,412                       $  293,492

Accounts receivable, 
net of allowance of 
$380,060 at 1996 and         
$361,260 at 1995 
(Note 2)                       2,144,140                         1,961,815

Accounts receivable
-trade, with affiliates            8,062                             6,065

Accounts receivable-
agents, including 
accrued interest                  32,140                             1,492

Notes receivable-
director/shareholder                  --                            14,500

Prepaid commissions               54,567                           126,042

Other current assets              87,105                            94,251

Total current assets           2,613,426                         2,497,657

NON-CURRENT ASSETS

Equipment and software, 
net of accumulated 
depreciation and
amortization of $292,881
at 1996 and $230,868 
at 1995                          100,234                           143,202

Deposits                          18,027                            19,528

TOTAL ASSETS                  $2,731,687                        $2,660,387

See accompanying notes to financial statements



AMERICONNECT, INC.
Consolidated
Balance Sheets




                             September 30, 1996              December 31, 1995
                                Unaudited

LIABILITIES AND 
STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES

Accounts payable (Note 2)         $3,034,462                   $2,782,432

Sales taxes payable                  101,534                       97,460

Accrued office closing 
costs                                     --                        8,539

Other accrued liabilities                513                          733

Total current liabilities          3,136,509                    2,889,164

NON-CURRENT LIABILITIES

Customer deposits                      3,000                        8,264

Total liabilities                  3,139,509                    2,897,428

COMMITMENTS AND 
CONTINGENCIES 
(Notes 2 and 4)                          --                            --

STOCKHOLDERS' 
DEFICIT (Note 4)

Class A common stock, 
par value $.00001 
per share; 10,000,000 
shares authorized; 
issued 6,562,033 shares                  66                           66


Common stock, par value 
$.01 per share; 
20,000,000 shares 
authorized; issued 
6,522,611 shares                     65,226                       65,050

Additional paid-in capital        3,647,174                    3,642,731

Accumulated deficit              (4,118,425)                  (3,943,025)

Treasury stock - class A 
common, at cost; 5,970,000 
shares                                  (60)                         (60)

Treasury stock - common, 
at cost; 180,250 shares              (1,803)                      (1,803)

Total stockholders' deficit        (407,822)                    (237,041)

TOTAL LIABILITIES AND 
STOCKHOLDERS' DEFICIT             $2,731,687                   $2,660,387

</TABLE>

    See accompanying notes to financial statements

AMERICONNECT, INC.
Consolidated 
Statements of Operations
(Unaudited)


                       For The Three Months               For The Nine Months 
                       Ended September 30,                Ended September 30,

<TABLE>
<S>               <C>            <C>            <C>            <C>      

                     1996           1995           1996           1995

REVENUES      

Sales                $4,175,148     $4,177,064     $12,740,335    $13,067,791

Sales to 
affiliates               21,967         21,435          63,477         62,969

Total revenues        4,197,115      4,198,499      12,803,812     13,130,760

COSTS AND EXPENSES

Direct operating 
costs                 3,237,198      3,487,873       9,609,495     10,293,096

Selling, 
administrative and 
general expenses      1,207,711      1,215,695       3,304,589      3,297,760

Depreciation and 
amortization             22,010         18,810          62,012         53,386

Total costs and 
expenses              4,466,919      4,722,378      12,976,096     13,644,242

Operating loss         (269,804)      (523,879)       (172,284)      (513,482)

OTHER INCOME 
(EXPENSE)

Interest income           2,410          4,215           6,888         16,786

Interest expense         (6,503)        (3,106)        (23,794)        (6,346)

Loan fees                    --             --              --         (1,251)

Miscellaneous            10,901            377          13,790            377

Total other income 
(expense)                 6,808          1,486          (3,116)         9,566

NET LOSS BEFORE 
INCOME TAXES           (262,996)      (522,393)       (175,400)      (503,916)

Income tax benefit 
(expense) (Note 3)           --             --               --            --

NET LOSS              ($262,996)     ($522,393)      ($175,400)     ($503,916)

Net loss per common 
and common
equivalent share         ($.038)        ($.076)         ($.025)        ($.074)

Weighted average 
common and common
equivalent shares 
outstanding (Note 4)  6,921,189       6,841,499       6,921,189      6,841,499

</TABLE>

See accompanying notes to financial statements


AMERICONNECT, INC.
Consolidated
Statements of Cash Flows
(Unaudited)


                                           For the Nine
                                           Months Ended
                                           September 30,

<TABLE>
<S>                            <C>               <C>            
                                  1996              1995

Cash flows from operating 
activities:
Net loss                          ($175,400)         ($503,916)

Adjustments to reconcile 
net income to cash provided by
(used in) operating activities:

Depreciation and amortization        62,012             53,386

Provision for doubtful accounts     191,650            376,555

(Increase) decrease in assets:
Accounts receivable-trade          (373,975)          (156,457)

Accounts receivable - trade 
from related parties                 (1,997)            (2,782)

Prepaid commissions                  71,475                 --

Other current assets                  7,146              35,496

Deposits                              1,501              (3,683)

Increase (decrease) in 
liabilities:
Accounts payable - trade            252,030             102,265

Sales tax payable                     4,074              10,528

Accrued office closing costs         (8,539)            (13,349)

Other accrued liabilities              (220)            (23,482)

Customer deposits                    (5,264)             (7,500)

Deferred income                          --             (13,384)

Net cash provided by (used in) 
operating activities                  24,493           (146,323)

Cash flows from investing 
activities:
Purchase of equipment and 
software                            (19,044)            (82,593)

Notes receivable - 
director/shareholder                     --              (3,000)

Payments on note receivable 
- director/shareholder               14,500                  --

Notes receivable - agents           (20,000)            (20,000)

Notes receivable - employees        (11,400)                 --

Payment on agents notes 
receivable                              752              74,864

Net cash used in investing 
activities                          (35,192)            (30,729)

Cash flows from financing 
activities:

Proceeds from bank loan           8,785,000           4,130,000

Payments on bank loan            (8,785,000)         (3,786,683)

Sale of stock to employees            4,619               2,250

Net cash provided by 
financing activities                  4,619             345,567

Net increase (decrease) in cash      (6,080)            168,515

Cash at beginning of period         293,492             405,942

Cash at end of period            $  287,412          $  574,457

Supplemental disclosures of 
cash flow information

Cash paid during the period for:
Interest paid                       $27,792             $5,370 
Income taxes                          2,245              3,340


</TABLE>

See accompanying notes to financial statements

	
AMERICONNECT, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

THE COMPANY:  AmeriConnect, Inc. and its wholly owned subsidiary, AmeriConnect,
Hampshire (collectively, the "Company") resell long distance 
telecommunications services primarily to individualsand small to 
medium-sized businesses.  AmeriConnect, Inc. of New Hampshire was formed 
June 28, 1993, in order to do business in the state of New Hampshire.

The consolidated balance sheets as of September 30, 1996, the consolidated 
statements of operations for the nine months ended September 30, 1996 and 
1995, and the consolidated statements of cash flows for the nine months ended 
September 30, 1996 and 1995 have been prepared by the Company, without 
audit.  In the opinion of management, all adjustments (which include only 
normal recurring adjustments) necessary to present fairly the financial 
position, results of operations, and cash flows at September 30, 1996, and 
for all periods presented have been made.

Certain information and footnote disclosures normally included in financial 
statements prepared in accordance with generally accepted accounting 
principles have been condensed or omitted.  It is suggested that these 
condensed consolidated financial statements be read in conjunction with the 
financial statements and notes thereto included in the Company's December 
31, 1995 annual report to shareholders.  The results of operations for the 
periods ended September 30, 1996, and September 30, 1995, are not 
necessarily indicative of the operating results for the full year.
	
NOTE 2 - COMMITMENTS AND CONTINGENCIES
	
The Company had a contract with a firm to provide subscriber statement 
processing and billing services.  The contract was for a period of three 
(3) years and expired in September 1996.  The Company has negotiated a month-
to-month arrangement that began in October 1996.  Terms of the month-to-month 
arrangement provide for a monthly base charge with additional per unit 
processing charges.  

The Company has a contract with Sprint to provide telecommunications services 
for the Company's customers.  The Company has negotiated an amendment to 
the contract that was retroactive to January 1, 1996.  The amendment 
covers the pricing of the services for a term of two years beginning 
January 1, 1996.  The Company has a monthly minimum usage commitment of 
$500,000 for each of the months covered by the agreement with a total minimum 
commitment of $12,000,000.  In the event the Company's customers use less 
than the minimum commitment, the difference is due and payable by the 
Company to Sprint.  Prior to the amendment, the Company had a minimum 
monthly commitment of $1,000,000.  For the period September 1, 1995, 
through December 1, 1995, the Company had an accumulated shortfall of 
approximately $719,549 which will be offset by the amount by which the 
Company's actual monthly billed usage for the period beginning on January 
1, 1996 exceeds the $500,000 minimum commitment.  As a result of this 
offset, at September 30, 1996, there was no accumulated shortfall and the 
Company was in compliance with the contractual requirements of the 
agreement.  Due to the fact the merger with Phoenix Network, Inc. was 
consummated on October 8, 1996 (See Note 7), the Company's amendment to 
the Sprint contract terminated on the closing date.

The Company has a contract with WilTel to provide telecommunications 
services at discounted rates which will vary based upon the amount of usage 
by the Company.  The term of this usage commitment is thirty-nine (39) 
months.  The Company's agreement with WilTel calls for a minimum monthly 
usage commitment of $50,000 through January 1998.  In the event the 
Company's customers use less than the minimum commitment in any month, 
the difference is due and payable by the Company to WilTel in the following 
month.  On June 21, 1996, the Company executed an amendment to the contract.
The amendment provides for additional discounts to the Company for the 
usage months of June, July, August and September of 1996.  The Company was 
in compliance with the contractual requirements of the agreement throughout 
the quarter ended September 30, 1996.    

On June 1, 1996, the Company entered into a revolving credit facility which 
expired October 1, 1996, and allowed for maximum borrowings by the Company 
of the lesser of $1,000,000 or 50% of eligible (less than 61 days old) 
receivables.  This facility was renewed on October 1, 1996, and will expire 
on November 1, 1996.  Interest is payable monthly at the bank's prime rate 
(8.25% at September 30, 1996) plus 2%.  Under the terms of the credit 
facility, the Company is required to meet certain financial covenants.  The 
line is secured by all of the Company's accounts receivable.  During the 
third quarter of 1996, the Company had used this facility for short term 
borrowings, but had no outstanding borrowings at quarter end.  At September 
30, 1996, the Company was in default of certain of these financial covenants,
which defaults are continuing.  

In accordance with the terms of the credit facility, the Company purchased a 
term life insurance policy on a key employee with a face amount of 
$1,750,000 during the year ended December 31, 1994.  Annual premiums are 
approximately $3,500.

	
NOTE 3 - INCOME TAXES

A valuation allowance was established to reduce the deferred tax asset to 
the amount that will more likely than not be realized.  

The valuation allowance was adjusted for the nine month period ended September 
30, 1996, and the year ended December 31, 1995, as follows:
	
<TABLE>
<S>                       <C>                     <C>

                           		 September 30, 1996		    December 31, 1995

Valuation allowance, 
beginning of period	          $1,667,882  	           	 $591,512 

Valuation adjustment	             47,419 	               576,370 

Adjustment in allowance  
due to change in estimate	            --       	         500,000 

Valuation allowance, end 
of period	                    $1,715,301 	             $1,667,882 

</TABLE>


NOTE 4 - COMMON STOCK, WARRANTS AND OPTIONS

PUBLIC OFFERING:    In its initial public offering in 1989, the Company 
issued 828,000 units each of which consisted of five shares of previously 
unissued common stock, par value $.01 per share, and five redeemable Class A 
Warrants at a price per unit of $5.00.  Each of the Class A Warrants, which 
was transferable separately immediately upon issuance, entitled the holder 
to purchase for $1.00 one share of common stock and one redeemable Class B 
common stock purchase warrant ("Class B Warrant").  The Class A Warrants 
expired on May 29, 1994.  Each Class B Warrant entitled the holder to 
purchase one share of common stock at $1.50 until May 29, 1994.  The 
warrants are not common stock equivalents for the purposes of the earnings 
per share computations.  (See Note 1).  In addition, the Company granted the 
underwriter and finder options to purchase 57,600 and 14,400 units, 
respectively, at $6.00 per unit exercisable over a period of four years 
commencing one year from the date of the prospectus.   

MISSING STOCK CERTIFICATES:  Prior to the Company's initial public offering, 
the stockholders of record as of March 29, 1989, executed escrow agreements 
which required the placement in escrow of 150,000 shares of outstanding 
common stock and 5,970,000 shares of outstanding Class A common stock 
pending the achievement of certain earnings objectives.  These earnings 
objectives were not met and, consequently, all of the shares subject to the 
escrow agreement were retired and have been accounted for as treasury stock 
since December 31, 1992.  In addition, in connection with the execution of 
a voting trust agreement in 1989, certificates representing 3,014,751 shares of
Class A common stock were issued in the name of a voting trust in 
substitution for the certificates held by some of the stockholder-parties 
to the voting trust agreement.  This voting trust expired in June of 1992.  
During the first quarter of 1992, however, the Company learned that the 
escrow agent associated with the escrow agreements asserts that it has never 
received the stock certificates representing the shares subject to the escrow 
agreements.  During the same period, the Company discovered that the 
certificates representing 2,975,751 of the shares transferred to the voting 
trust were never delivered to the Company for cancellation.  The Company has
been unable to locate neither the original share certificates nor the 
certificates issued to the voting trust.  As a result, if a stockholder 
attempted to transfer any of the shares subject to the escrow agreements or 
the voting trust agreement in violation of such agreements, there can be no 
assurance that an innocent transferee could not successfully claim the right
to the shares purportedly transferred to him or her.  The Company believes, 
however, that the legends affixed to each of the missing certificates, which 
state that the shares are subject to the restrictions of the voting trust 
agreement and the escrow agreements, respectively, are sufficient to prevent 
a transferee from acquiring a valid claim with respect to the shares 
represented by the missing certificates.  In addition, the Company has 
obtained affidavits from each holder of the missing certificates that no 
such purported transfers have been made.

STOCK RIGHTS:  The rights and preferences of common stock and Class A 
common stock are substantially identical except that each share of common 
stock entitles the holder to one vote whereas, each share of Class A common 
stock entitles the holder to five votes.  Class A common stock automatically
converts into common stock on a one-for-one basis upon sale or transfer to 
an entity or individual who was not a holder of Class A common stock before 
such sale or transfer, or at any time at the option of the holder.  During 
each of 1994 and 1995, 113,400 shares of Class A stock were converted to 
common stock through private transactions. 

STOCK OPTION PLANS:  On July 29, 1988, the Company adopted a stock option 
plan allowing 300,000 shares of unissued but authorized common stock for 
issuance of incentive and/or non-qualified stock options.  At September 30, 
1996, all options had been granted under the plan, and 23,000 options had 
been returned to the Company by employees who resigned prior to vesting.  
Such returned options are again available for use under the plan.

On May 27, 1994, the Company adopted a second stock option plan allowing 
for 500,000 shares of unissued but authorized common stock for issuance of 
incentive and/or non-qualified stock options.  As of September 30, 1996, 
487,000 options under this plan had been granted and 182,856 options had 
been returned to the Company by employees who resigned prior to vesting.  
Such returned options are again available for use under the plan.    

Stock option transactions for the period ended September 30, 1996, are 
summarized below:

<TABLE>
<S>                       <C>               <C>             <C>

                            	1988 Plan	        1994 Plan	       Total    

Outstanding, beginning 
of quarter	                   163,000 	          302,000 	    465,000 

Granted	                           --                	-- 	         -- 

Exercised	                     (1,000)	               -- 	     (1,000)

Cancelled	                         -- 	           (8,500)	     (8,500)

Outstanding, end 
of period                 	    162,000 	          293,500 	   455,500 

Option price per share 
exercised	                       $0.03                	--	       $0.03  

Price for outstanding 
options 	                     $0.03 - $0.50 	   $0.26 - $0.75 	$0.03 - $0.75 

</TABLE>

The expiration dates for the options issued under the 1988 Plan range from 
May 1998 to December 2003.  At September 30, 1996, 23,000 shares were 
available for future grants under the 1988 Plan.

The expiration dates for the options issued under the 1994 Plan range from 
August 2004 to December 2005.  At September 30, 1996, 195,856 shares were 
available for future grants under the 1994 Plan.


NOTE 5 - PROFIT SHARING PLAN

The Company adopted a 401(k) savings plan effective January 1, 1994, 
covering nearly all eligible employees with at least six months of service.
Under the terms of the plan, employees may contribute up to 15% of their 
gross wages.  The Company matches 100% of the first 3% contributed by each 
employee.  The Company's contribution to the plan was $14,907 in the first 
nine months of 1996.


NOTE 6 - ONGOING OPERATIONS

The accompanying financial statements have been prepared in accordance with 
generally accepted accounting principles. The Company reported a net loss of
$175,400 for the nine month period ended September 30, 1996.  At this time, 
liabilities exceed assets by $407,822.    

	
NOTE 7 - SUBSEQUENT EVENT

On January 15, 1996, the Company and Phoenix Network, Inc. ("Phoenix"), a 
Golden, Colorado-based long distance reseller and provider of value-added 
telecommunications services, signed a letter of intent to merge the two 
companies in a stock-for-stock transaction.  The parties executed a 
definitive merger agreement on June 14, 1996.  In connection with the 
merger, Phoenix issued approximately 2.6 million shares of its common stock 
in exchange for all of the outstanding shares of the Company.  The merger 
was consummated on October 8, 1996. 


ITEM 2.            MANAGEMENT'S DISCUSSION AND ANALYSIS OR 
	              PLAN OF OPERATION

EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THIS REPORT ON FORM 
10-QSB CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND 
UNCERTAINTIES.  THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY.  
FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE 
NOT LIMITED TO, THOSE DISCUSSED IN THE SECTION ENTITLED "FACTORS THAT MAY 
AFFECT FUTURE RESULTS OF OPERATIONS," AS WELL AS THOSE DISCUSSED ELSEWHERE 
IN THE COMPANY'S REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

General	

The Company's financial condition and results of operations continue to be 
negatively affected by increasing competition which contributes to lower 
profit margins and increasing costs for new sales.  

Competition.  Intense competition in the long distance telecommunications 
industry continues in 1996.  Major long distance companies like AT&T and 
Sprint are continuing to market directly to the Company's primary market - 
small to medium-sized businesses.  Other existing competitors are 
aggressively reducing rates to maintain and build customer base and expand 
minute volume.  In addition, new competitors continue to emerge targeting 
the Company's primary market.  Many of these competitors sought to build 
volume quickly and, in order to accomplish this goal, sold their long 
distance services at rates that, in the Company's opinion, do not reflect 
the full costs of doing business.  Accordingly, while the Company reduced 
its rates and undertook efforts to maintain and build its customer base 
(as described below), the Company was unable to match the rates and/or 
services offered by many of its competitors, thereby increasing the 
number of customers lost to competitors.  While the Company continued to 
acquire new customers, lost business and rate reductions to existing 
accounts more than offset new business.  While total minutes billed 
increased approximately 8% from the third quarter 1995 to the third quarter 
1996, the average revenue per minute dropped approximately 11%. 

Sales Costs.  The Company sought to increase its volume by offering services
at rates that were competitive in the market.  In addition, the Company 
hired Area Sales Directors and other personnel to support its sales agent 
program, increased commissions to sales agents to maintain its relationship 
with key agents, hired a Kansas City area direct sales force and promoted 
aggressive marketing campaigns designed to increase sales.  While the 
Company believes these actions to be necessary to respond to the competitive
environment, they have the effect of increasing selling, general and 
administrative expenses.


Third Quarter Results 1996 Compared to Third Quarter Results 1995

Total Revenues.  Total revenues decreased from $4,198,499 in the third quarter 
1995 to $4,197,115 in the third quarter 1996, a decrease of $1,384.  The 
decrease is attributable to the decrease in average revenue per minute as 
previously discussed.

Direct Operating Costs.  Direct operating costs decreased from $3,487,873 in
the third quarter 1995 to $3,237,198 in the third quarter 1996, a decrease 
of $250,675 or approximately 7%. As a percentage of revenues, direct 
operating costs decreased from approximately 83% in the third quarter of 
1995 to approximately 77% in the third quarter of 1996.  The decrease is 
due in large part to the fact that approximately $200,000 in credits due 
from a supplier were written-off in the third quarter of 1995.  Excluding 
the effects of the write-off, direct operating costs as a percentage of 
revenues for the third quarter of 1995 would have been approximately 78%.

Selling, Administrative and General Expenses.  The Company's selling, 
administrative and general expenses decreased from $1,215,695 in the third 
quarter 1995 to $1,207,711 in the third quarter 1996, a decrease of $7,984 or 
approximately 11%.  As a percentage of revenue, selling, administrative and 
general expenses remained constant at approximately  29%.

Compensation expenses increased from $609,856 in the third quarter 1995 to 
$680,225 in the third quarter 1996, an increase of $70,369 or approximately 
12%.  Salaries for sales related positions increased from $82,479 to $108,311, 
an increase of $25,832 or approximately 31%, which resulted from the 
addition of several sales positions throughout 1996.  In-house commissions 
increased from $9,434 to $27,698, an increase of $18,264 or approximately 
194%.  Agent commissions increased from $358,422 to $377,503, an increase of
$19,081 or approximately 5% due to the introduction in late 1995 of a 
commission plan designed to attract high volume agents.  

Fees for professional services increased from $51,043 in the third quarter 
1995 to $117,843 in the third quarter 1996, an increase of $66,800 or 
approximately 131%.  This increase resulted primarily from increases in the 
costs of legal and accounting services associated with the merger.

Nine Month Results 1996 Compared to Nine Month Results 1995

Total Revenues.  Total revenues decreased from $13,130,760 for the first 
nine months of 1995 to $12,803,812 for the first nine months of 1996, a 
decrease of $326,948 or approximately 2%.  This decrease in revenues is 
attributable to the decrease in average revenue per minute.

Direct Operating Costs.  Direct operating costs decreased from $10,293,096 
for the first nine months of 1995 to $9,609,495 for the first nine months 
of 1996, a decrease of $683,601 or approximately 7%.  As a percentage of 
revenues, direct operating costs decreased from approximately 78% in 1995 
to 75% in 1996.  The decrease was the result of the execution of a new 
carrier contract that was effective September 1, 1995 and an amendment to 
the new contract that was effective January 1, 1996. (See Third Quarter 
Results above.)     

Selling, Administrative and General Expenses.  The Company's selling, 
administrative and general expenses increased from $3,297,760 for the first 
nine months of 1995 to $3,304,589 for the first nine months of 1996, an 
increase of $6,829 or approximately 1%.  As a percentage of revenue, 
selling, administrative and general expenses increased from 25% in 1995 to 
26% in 1996.  The increase in selling, administrative and general expenses 
was insignificant due in large part to the recovery of a bad debt previously
written off.  The Company received a credit in the amount of $300,000 
related to the bad debt previously written off.  Without the effect of the 
$300,000 credit, selling, administrative and general expenses would have 
increased from $3,297,760 for the first nine months of 1995 to $3,604,589 
for the first nine months of 1996, an increase of $306,829 or approximately 
29%.  The biggest single increase in this expense category in dollars was in
compensation expense. 

Compensation expenses increased from $1,746,672 for the first nine months of
1995 to $2,004,804 for the first nine months of 1996, an increase of 
$258,132 or approximately 15%.  Salaries for sales related positions 
increased from $217,752 to $329,625, an increase of $111,873 or 
approximately 57%, which resulted from the addition of several sales 
positions throughout 1996.  In-house commissions increased from $29,208 to 
$79,437, an increase of $50,229 or approximately 172%.  Agent commissions 
increased from $1,030,526 to $1,104,613, an increase of $74,087 or 
approximately 7% due to the introduction in late 1995 of a commission plan 
designed to attract high volume agents.   

Fees for professional services increased from $145,146 for the first nine 
months of 1995 to $333,557 for the first nine months of 1996, an increase of
$173,411 or approximately 119%.  This increase resulted primarily from 
increases in the costs of legal and accounting services associated with the 
merger.


Liquidity and Capital Resources

On December 31, 1995 and September 30, 1996, the Company had a stockholders'
deficit of $237,041 and $407,822, respectively.  During the first nine 
months of 1995, the Company used $146,323 cash from operations.  During 
the first nine months of 1996, the Company provided $24,493 cash from 
operations.  

The Company has a contract with Sprint to provide telecommunications 
services for the Company's customers.  The Company has negotiated an 
amendment to the contract that was retroactive to January 1, 1996.  The 
amendment covers the pricing of the services for a term of two years 
beginning January 1, 1996.  The Company has a monthly minimum usage 
commitment of $500,000 for each of the months covered by the agreement with 
a total minimum commitment of $12,000,000.  In the event the Company's 
customers use less than the minimum commitment, the difference is due and 
payable by the Company to Sprint.  Prior to the amendment, the Company had a
minimum monthly commitment of $1,000,000.  For the period September 1, 1995,
through December 1, 1995, the Company had an accumulated shortfall of 
approximately $719,549 which will be offset by the amount by which the 
Company's actual monthly billed usage for the period beginning on January 
1, 1996 exceeds the $500,000 minimum commitment.  As a result of this 
offset, at September 30, 1996, there was no accumulated shortfall and the 
Company was in compliance with the contractual requirements of the agreement.
Due to the fact the merger with Phoenix Network, Inc. was consummated 
on October 8, 1996 (See Note 7), the Company's amendment to the Sprint 
contract terminated on the closing date.

The Company has a contract with WilTel to provide telecommunications 
services at discounted rates which will vary based upon the amount of usage 
by the Company.  The term of this usage commitment is thirty-nine (39) months.  
The Company's agreement with WilTel calls for a minimum monthly usage 
commitment of $50,000 through January 1998.  In the event the Company's 
customers use less than the minimum commitment in any month, the difference 
is due and payable by the Company to WilTel in the following month.  On June
21, 1996, the Company executed an amendment to the contract.  The amendment 
provides for additional discounts to the Company for the usage months of 
June, July, August and September of 1996.  The Company was in compliance 
with the contractual requirements of the agreement throughout the quarter 
ended September 30, 1996.    

On June 1, 1996, the Company entered into a revolving credit facility which 
expired October 1, 1996, and allowed for maximum borrowings by the Company 
of the lesser of $1,000,000 or 50% of eligible (less than 61 days old) 
receivables.  This facility was renewed on October 1, 1996, and will expire 
on November 1, 1996.  Interest is payable monthly at the bank's prime rate 
(8.25% at September 30, 1996) plus 2%.  Under the terms of the credit 
facility, the Company is required to meet certain financial covenants.  The 
line is secured by all of the Company's accounts receivable.  During the 
third quarter of 1996, the Company had used this facility for short term 
borrowings, but had no outstanding borrowings at quarter end.  At September 
30, 1996, the Company was in default of certain of these financial covenants,
which defaults are continuing.  
	
In accordance with the terms of the credit facility, the Company purchased a 
term life insurance policy on a key employee with a face amount of 
$1,750,000 during the year ended December 31, 1994.  Annual premiums are 
approximately $3,500.

At September 30, 1996, the Company had a ratio of current assets to current 
liabilities of 0.83.  Working capital deficit at September 30, 1996 was 
$523,083.

The Company's business as a non-facilities based reseller of long distance 
telecommunications services is generally not a capital intensive business, 
and at September 30, 1996, the Company had no material commitments for 
capital expenditures.  The Company anticipates any additional capital 
expenditures in the future will be confined to minimal purchases of office 
fixtures and equipment.


Factors That May Affect Future Results of Operations

Dependence on Service Providers.  The Company depends on a continuing and 
reliable supply of telecommunications services from facilities-based, 
interexchange carriers.  Because the Company does not own or lease 
switching or transmission facilities, it depends on these providers for the 
telecommunications services used by its customers and to provide the Company
with the detailed information on which it bases its customer billings.  The 
Company's ability to expand its business depends both upon its ability to 
select and retain reliable providers and on the willingness of such 
providers to continue to make telecommunications services and billing 
information available to the Company for its customers on favorable terms 
and in a timely manner.  

Potential Adverse Effects of Rate Changes.  The Company bills its customers 
for the costs of the various telecommunications services procured on their 
behalf.  The total billing to each customer is generally less than telephone 
charges for the same service provided by the major carriers.  The Company 
believes its lower customer bills are an important factor in its ability to 
attract and retain customers.  To the extent the differential  between the 
telephone rates offered by the major carriers directly to their customers and 
the cost of the bulk-rate telecommunications services procured by the 
Company from its underlying carriers decreases, the savings the Company is 
able to obtain for its customers could decrease and the Company could lose 
customers or face increased difficulty in attracting new customers. 
If the Company elected to offset the effect of any such decrease by lowering
its rates, the Company's operating results would also be adversely affected.

Competition.  An existing or potential customer of the Company has numerous 
other choices available for its telecommunications service needs, including 
obtaining services directly from the same carriers whose services the 
Company offers.  From time to time, the Company's competitors may be able to 
provide a range of services comparable to or more extensive than those 
available to the Company's customers at rates competitive with, or lower 
than, the Company's rates.  In addition, most prospective customers of the 
Company are already receiving service directly from at least one long 
distance carrier, and thus the Company must convince prospective customers 
to alter these relationships to generate new business.  The Company competes
with three major interexchange carriers, AT&T, MCI and Sprint, other 
large carriers, including Frontier and WorldCom, and several hundred smaller
carriers.  Additionally, as a result of legislation enacted by the federal 
government in February of 1996, the RBOCs and GTOCs will have, upon 
compliance with certain regulatory requirements, the right to provide long 
distance service.  Many of the RBOCs and GTOCs have already announced their 
intention to enter the business of providing long distance service.  As a 
consequence, the telecommunications industry will remain highly competitive 
and be subject to rapid technological and regulatory change.  Because the 
tariffs offered by the major carriers for telecommunications services are 
not proprietary in nature, there are no effective barriers to entry into 
the Company's line of business.  Because of the considerably greater 
resources of competitors of the Company, there can be no assurance that the 
Company will be able to become or remain competitive in the current 
telecommunications environment.  

Possible Volatility of Stock Price.  The market price of the Company's 
Common Stock has, in the past, fluctuated substantially over time and may 
in the future be highly volatile.  Factors such as the announcements of 
potential mergers, acquisitions, joint ventures or other strategic 
combinations involving the Company.  The announcement of the inability to 
consummate the proposed merger, rate changes for various carriers, 
technological innovation or new products or service offerings by the 
Company or its competitors, as well as market conditions in the 
telecommunications industry generally and variations in the Company's 
operating results, could cause the market price of the Common Stock to 
fluctuate substantially.  Because the public float for the Company's Common 
Stock is small, additional volatility may be experienced.

Control by Officers and Directors.  As of September 30, 1996, the Company's 
executive officers and directors beneficially owned or controlled 
approximately 46.5% of the total voting power represented by the Company's 
outstanding capital stock, taking into account that holders of the Company's 
Class A Common Stock are entitled to five votes per share of such stock and 
assuming the exercise of all outstanding options for the Company's capital 
stock which are exercisable within sixty (60) days.  The votes represented 
by the shares beneficially owned or controlled by the Company's executive 
officers and directors would, if they were cast together, control the 
election of a majority of the Company's directors and the outcome of most 
corporate actions requiring stockholder approval.

Investors who purchase Common Stock of the Company may be subject to 
certain risks due to the concentrated ownership of the capital stock of the 
Company.  Such risks include: (i) the shares beneficially owned or 
controlled by the Company's executive officers and directors could, if they 
were cast together, delay, defer or prevent a change in control of the 
Company, such as an unsolicited takeover, which might be beneficial to the 
stockholders, and (ii) due to the substantial ownership or control of 
outstanding shares by the Company's executive officers and directors and 
the potential adverse impact of such substantial ownership or control on a 
change in control of the Company, it is less likely that the prevailing 
market price of the outstanding shares of the Company's Common Stock will 
reflect a "premium for control" than would be the case if ownership of the 
outstanding shares were less concentrated.

Governmental Regulation.  As a reseller of long distance telecommunications 
services, the Company is subject to many of the same regulatory requirements
as facilities-based interexchange carriers.  The intrastate long distance 
telecommunications operations of the Company are also subject to various 
state laws and regulations, including certification requirements.  
Generally, the Company must obtain and maintain certificates of public 
convenience and necessity from regulatory authorities in most states where 
it offers service, and in some of these jurisdictions it must also 
file and obtain prior regulatory approval of tariffs for intrastate 
offerings.  There can be no assurance that the regulatory authorities in 
one or more states or the FCC will not take action having an adverse effect 
on the business or financial condition of the Company.  



	PART 2. - OTHER INFORMATION
	
ITEM 6.         Exhibits and Reports on Form 8-K 

(a)	Exhibits
	
	1.  Financial Data Schedule

(b)	Reports on Form 8-K

On September 3, 1996, the Company filed a report on Form 8-K - Events 
regarding a press release issued by the Company that they have established 
the close of business on September 3, 1996, as the record date for 
determining the stockholders entitled to notice of and to vote at a special 
meeting of stockholders to be held to consider and approve the proposed 
merger with a wholly owned subisidary of Phoenix Network, Inc.


	


	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 thereunto duly authorized (the undersigned being its President).

AMERICONNECT, INC.                               

Date:	November 14, 1996	
							/s/ Robert R. Kaemmer                               
							Robert R. Kaemmer    
							President                  


[ARTICLE]     5
<TABLE>
<S>                             <C>
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[FISCAL-YEAR-END]                   12-31-96
[PERIOD-END]                        09-30-96
[CASH]                               287,412
[SECURITIES]                         0
<RECEIVABLE>                        2,564,402
[ALLOWANCES]                        380,060
[INVENTORY]                         0
[CURRENT-ASSETS]                    2,613,426
[PP&E]                               393,115
[DEPRECIATION]                        292,881
[TOTAL-ASSETS]                      2,731,687
[CURRENT-LIABILITIES]               3,136,509
[BONDS]                              0
[PREFERRED-MANDATORY]                0
[PREFERRED]                         0
[COMMON]                            65,292
[OTHER-SE]                         (473,114)
[TOTAL-LIABILITY-AND-EQUITY]        2,731,687
[SALES]                            12,803,812
[TOTAL-REVENUES]                   12,803,812
[CGS]                               9,609,495
[TOTAL-COSTS]                      12,976,096
[OTHER-EXPENSES]                   (20,678)
[LOSS-PROVISION]                    0
[INTEREST-EXPENSE]                23,794
[INCOME-PRETAX]                   (175,400)
[INCOME-TAX]                       0
[INCOME-CONTINUING]               (175,400)
[DISCONTINUED]                     0
[EXTRAORDINARY]                    0
[CHANGES]                           0
[NET-INCOME]                      (75,400)
[EPS-PRIMARY]                     (.025)
[EPS-DILUTED]                      (.025)
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