8-K

                       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) - August 7, 2002


                         TOLLGRADE COMMUNICATIONS, INC.
             (Exact Name of Registrant as Specified in Its Charter)

                                  PENNSYLVANIA
                 (State or Other Jurisdiction of Incorporation)

        000-27312                                          25-1537134
(Commission File Number)                       (IRS Employer Identification No.)


                                 493 NIXON ROAD
                          CHESWICK, PENNSYLVANIA 15024
               (Address of Principal Executive Offices) (Zip code)

                                 (412) 820-1400
              (Registrant's Telephone Number, Including Area Code)







ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS

Exhibit
Number       Description
- ------       -----------

99.2         Information furnished pursuant to Regulation FD
             (17 CFR 243.100 - 243.103)


ITEM 9.  REGULATION FD DISCLOSURE

The Registrant elects to disclose under this Item 9 pursuant to Regulation FD
(17 CFR 243.100 - 243.103) the information contained in Exhibit 99.2 furnished
herewith, which information is incorporated in this Item 9 by reference. Such
information shall not be deemed to be filed hereunder for purposes of liability
under the Securities Exchange Act of 1934 or for purposes of incorporation by
reference in any registration statement filed by the Registrant under the
Securities Act of 1933.


                                   SIGNATURES

         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 duly authorized.


                                       TOLLGRADE COMMUNICATIONS, INC.

Date:    August 7, 2002                By:      /s/ Christian L. Allison
     ----------------------               --------------------------------------
                                                Christian L. Allison
                                                Chief Executive Officer







                                  EXHIBIT INDEX
                    (Pursuant to Item 601 of Regulation S-K)


Exhibit
Number          Description and Method of Filing
- ------          --------------------------------

99.2            Information furnished pursuant to Regulation FD, filed herewith.

EX-99.2

                                                                    Exhibit 99.2



                                                                      [Graphic]
================================================================================






                         Tollgrade Business Overview



                               August 5-9, 2002







================================================================================

PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.

                                                     TOLLGRADE(R)

                                                                P-H_RWB  8-02 1


Difficult Times In Telecom                                      [Graphic]
===============================================================================

     - WorldCom Scandal & Qwest SEC Investigation

     - Overspending In 1999 & 2000 To Feed Dot.Com
       Business Growth That Never Materialized

     - Deteriorating Line Growth

        - 188.6 Million In 2000 to 179.8 Million In 2001

     - CapEx Spending Down

        - VZ $14-15 Billion To $13-13.5 Billion
          (7/31/02)

        - BLS $4.2-$4.4 Billion To $3.7-$3.9 Billion
          (7/23/02)

        - SBC $9.2-$9.7 Billion To $8 Billion (7/23/02)





================================================================================

PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.

                                                     TOLLGRADE(R)

                                                                P-H_RWB  8-02 2


Needless to say, it's been a difficult time for telecom equipment vendors. Large
service providers face problems. There was significant overspending in 1999 to
2000 to feed the Dot.com revolution which became a burst bubble. CapEx spending
is down.




     INTERESTING COMMENTARY                                  [Graphic]
================================================================================


    [Photo]     "The loss of access lines in not necessarily a disaster if
                we are able to do two things. The first is adding new
                service to the remaining lines; the second is cutting the
                cost."

                  -Frederic Salerno
                   Vice Chairman, Verizon

                FORBES, August 12, 2002 Issue







================================================================================

PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.

                                                     TOLLGRADE(R)

                                                                P-H_RWB  8-02 3


While equipment vendors face difficult times, a recent quote by Frederic
Salerno, Verizon's vice chairman indicated Tollgrade's ability to compete.
Salerno said that large RBOCs could navigate through this storm by adding new
services and cutting their costs. This is interesting because this is central to
Tollgrade's past and future strategy.


TOLLGRADE OVERVIEW                                         [Graphic]
================================================================================


                           WE HELP OUR CUSTOMERS DELIVER "WORLD-CLASS" SERVICE
                           THROUGH "BEST IN CLASS" LOOP TESTING AND CABLE
                           NETWORK STATUS MONITORING

                                  TOLLGRADE(R)
NASDAQ TLGD













================================================================================

PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.

                                                     TOLLGRADE(R)

                                                                P-H_RWB  8-02 4


Since some of you may be unfamiliar with Tollgrade, I'll begin with an overview.

Tollgrade delivers test and management solutions primarily for consumer-based
telephone services, both narrowband and broadband. We also sell status
monitoring products for cable companies. Our customers are the Regional Bell
Operating Companies, (RBOCs), competitive local exchange carriers (CLECs),
international communications vendors, and MSOs, or Multiple Service Operators,
which are cable companies such as AT&T that operate several franchises.

Our automated, reactive test and measurement systems allow telephone companies
to remotely identify, isolate, and respond to network problems.





MARKET POSITION                                        [Graphic]
================================================================================





[Depiction of basic telephone network]





================================================================================

PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.

                                                     TOLLGRADE(R)

                                                                P-H_RWB  8-02 5





MARKET POSITION                                        [Graphic]
================================================================================

     - Test 150 Million Lines Worldwide

        - Dominant RBOC Position

                - LoopCare Mission-Critical

        - Growing Internationally

     - MCU Leading DLC Test Access

     - DigiTest Designated LTS Replacement

        - LTSs In 10,000 RBOC COs

     - DSL As Consumer






================================================================================

PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.

                                                     TOLLGRADE(R)

                                                                P-H_RWB  8-02 6


Today, Tollgrade has a solid market position. We test 15 million access lines
worldwide and we are the dominant player in POTS narrowband testing among the
Baby Bells.

Our LoopCare position among international CLECs continues to grow due to the
economical scalability of LoopCare and our DigiTest Hardware.

In addition, when it comes to testing Digital Loop Carrier systems, which is the
basic narrowband delivery system for many U.S. access lines, we are the market
leader with our patented MCU technology.

We also have a great hardware solution for central office based narrowband
testing in DigiTest, which has been approved by our RBOC customers as a POTS
test head replacement when that occurs.

Finally, LoopCare and DigiTest are being viewed more and more as viable DSL
testing tools as the focus changes to more consumer based thinking, and the need
for better automation becomes evident.




     STRATEGY MOVING FORWARD                        [Graphic]
================================================================================

     -   Enable the competitive rollout of consumer and consumer broadband
         services.

     -   Fully leverage the investments in their existing access network.

         -   Centralized Test & Management Systems

         -   Recently Deployed DSLAMs and NGDLCs




================================================================================

PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.

                                                     TOLLGRADE(R)

                                                                P-H_RWB  8-02 7


Our products leverage customers' investments in their existing access network.
Our products also provide customers with leading edge test and management
solutions that enable the competitive rollout of digital broadband services such
as DSL.




Three-Pronged Attack                                                [Graphic]
================================================================================


ANALYSIS - LoopCare
    Improved Automation
        New Services                                 ACCESS - MCU
                                                      New DLCs
                                                     Retrofit of Old DLCs

                                  [Graphic]



                            MEASUREMENT - DigiTest
                               LTS Replacement
                              DSL Functionality
                             New Service Testing




================================================================================

PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.

                                                     TOLLGRADE(R)

                                                                P-H_RWB  8-02 8


Tollgrade goes to market with a three pronged attack focused on the three
fundamental parts of a loop test system: test access devices to clamp onto the
line. test heads to measure the condition of the faulty lines, and software
operation support systems to analyze the measurements to determine the real
problem or lack of problems.

We want our customers to spend money on maintenance and Right To Use Fees for
new features that address new types of testing needs. LoopCare will change over
time as the network changes. In addition, we will also sell "scaled down"
versions of LoopCare to new upstart carriers both here and abroad. DSL testing
is a big focus of our non-RBOC LoopCare sales.

We want our RBOC customers to replace their old test hardware called LTSs that
are driven by LoopCare. LTSs, which are in all of the 10,000 RBOC central
offices, were built in the 70s and 80s. Our DigiTest system is an approved
replacement. They need new test heads as the LTSs become obsolete and break, and
as new services like DSL need to be tested. We believe we are at the very
beginning of that replacement cycle.

Finally, we are the market leader for Digital Loop Carrier (DLC) testing. RHK
estimates that 40-50 % of narrowband lines are delivered via DLC. We provide the
test access for virtually every type of DLC. As new DLC systems are introduced,
we'll develop new MCUs. We also visit previously installed DLCs with our
professional service teams and sell MCUs there as well.



Tollgrade Products                                                [Graphics]
================================================================================


[Graphics]
- -       DigiTest Integrated Measurement Unit (IMU)
- -       Tollgrade MCU-4496
- -       DigiTest Access Unit 1000 (DAU 1000)
- -       DigiTest Digital Wideband Unit (DWU) with Wideband Test Module (WTM)
- -       Tollgrade LoopCare Operations Support System
- -       LIGHTHOUSE Host Software, Headend Contoller (HEC) and Transponders











                                                               LoopCare
================================================================================

PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.

                                                     TOLLGRADE(R)

                                                                P-H_RWB  8-02 9


Our main focus is convincing customers to think of us as the General Store of
narrowband testing. From cradle to grave, we can take care of their consumer
testing needs, whether they be POTS or DSL. We help them maintain and streamline
their existing systems, provide new test heads and software features to keep
them current, make sure that they can access all parts of their network for
testing, and train and manage that test network on an ongoing basis. In that
sense, we want them to think of Tollgrade as the one-stop shop for consumer
testing. Our motto is "leave the testing to us."




   2002 Goals                                                       [Graphic]
================================================================================

   -    Testability Franchise

   -    LTS Replacement

   -    Tollgrade for DSL

   -    DSL for DLC

   -    International Expansion

   -    Broadband Edge



                                 TOLLGRADE(R)


================================================================================

PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.

                                                       TOLLGRADE(R)

                                                                P-H_RWB  8-02 10



When we started 2002, we set six primary goals and we're sticking to them
despite the tough times in telecom:

- - First, maintain our franchise as the testability improvement leader through
our Professional Services programs. These efforts, coupled with broadband edge
device growth, sustain MCU sales.

- - Second, focus on implementing our LTS POTS test head replacement program among
key RBOC customers as a means of upgrading their networks for consumer broadband
services.

- - Third, position DigiTest and LoopCare as the system of choice for DSL
pre-qualification and wideband testing.

- - Fourth, introduce a solution for DSL testing at remote DLC (Digital Loop
Carrier) sites. This product will leverage embedded MCU products with
state-of-the-art DigiTest wideband technology.

- - Fifth, continue to expand our opportunities in the international marketplace
through partnerships.

- - Sixth, continue to develop embedded test elements for the broadband edge
market.





Financial Statements                                             [Graphic]
================================================================================

Balance Sheet (Dollars in Thousands)

                                        June 29, 2002      December 31, 2001
- ------------------------------------------------------------------------------
ASSETS
- ------------------------------------------------------------------------------

  Current Assets

       Cash and Investments               $ 42,476               $ 38,595
       Accounts Receivable                  11,275                  9,617
       Inventories                          19,525                 22,184
       Other                                 2,959                  3,430
- ------------------------------------------------------------------------------
            TOTAL CURRENT ASSETS          $ 76,235               $ 73,826

       Other                              $ 72,682               $ 72,804
- ------------------------------------------------------------------------------
            TOTAL ASSETS                  $148,917               $146,630
- ------------------------------------------------------------------------------







================================================================================

PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.

                                                       TOLLGRADE(R)

                                                               P-H_RWB  8-02 11


I don't need to give you an overview of the telecom industry because,
unfortunately, over the past year, hardly a day goes by when the media isn't
describing the near disastrous conditions of telecommunication companies. What I
want to do now, however, is describe how Tollgrade is weathering the storm.

Let me start with some good news: Tollgrade is in good shape financially.

- - For one, we're adding to cash. For the first six months of this year,
operating cash flow was $7 million, and cash coming into the company was $4.2
million.

- - We're closely managing our inventories. Since the beginning of the year, our
inventories have dropped $1.8M.

- - We are tightly managing expenses. Headcount has been reduced consistent with
and often in anticipation of reduced revenues.

- - Our second quarter EPS of $0.08 was a penny over analysts' consensus.

Conditions certainly are difficult. Everything is tight with our customers: DLC
deployments, budgets, capital expenditures, expenses. That means Tollgrade's
sales are tight, as are our budgets, capital expenditures, and expenses.



Industry Conditions ...                                         [Graphic]
================================================================================

Spending extremely tight:

        - CapEx spending down among RBOCs

        -  Slowdown in line growth and
           deteriorating cash flow

        -  DLC growth slowed

        -  Heavy emphasis on business cases



================================================================================

PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.

                                                         TOLLGRADE(R)

                                                               P-H_RWB  8-02 12


There are two primary forces at work : slowdown in line growth and slowdown in
customer spending.

- - With the slowdown in line growth and deteriorating cash flow, the Regional
Bell Operating Companies are reluctant to deploy more Digital Loop Carrier
systems. This affects our MCU sales. While we can mitigate the impact somewhat
through our testability programs, we do not foresee a significant upturn in
overall business over the next six months. With our customers unsure about their
future, visibility beyond six months is especially difficult.

- - A second cause of our slower business is tighter customer budgets. As a
result, customers want stronger than ever business cases that show solid and
even quicker return on investment than in the past. They are also negotiating
harder than ever. They want our products but they also know that we want their
business even more, which gives them greater leverage. We've been successful in
winning business, sometimes through incentives to escalate purchases, but
negotiations are very challenging, especially for software.



Tollgrade's Response & Successes                                [Graphic]
================================================================================



- -       Testability Programs

- -       International Promise

- -       Integrated Test Solutions

- -       DSL As A Consumer Service

- -       DigiTest RBOC Foothold

- -       First HMS LIGHTHOUSE Win

- -       Digital Wideband Node is DLC


================================================================================

PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.

                                                        TOLLGRADE(R)

                                                               P-H_RWB  8-02 13


The Tollgrade team has been working hard to address these challenges, with some
encouraging successes.

- - For example, despite DLC reductions, our testability programs are getting
funded, which encourage MCU sales. We have testability programs approved and
moving in Verizon, Qwest, and the Ameritech region of SBC.

- - Customers are using LoopCare more and more to help roll out DSL service, as
evidenced by the sale of our Benchmark Database for storing line qualification
data to a major Bell company. The realization that DSL should be treated like
consumer services is taking hold.

- - Our efforts to expand internationally are showing significant promise. Lucent
is proving to be our best international distribution channel.

- - We continue to demonstrate our ability to deliver integrated
hardware-software-services- maintenance solutions. Compared with the last year
that Lucent owned LoopCare and the first year we owned it, second quarter
results were positive and are trending up as we actually integrate that software
into total solutions.

- - Another success is with DigiTest gaining a foothold in the RBOCs. This past
quarter, for instance, we sold our first DigiTest units to an RBOC customer to
replace obsolete NT1 test head hardware.

- - On the cable side of our business, our Version 5 LIGHTHOUSE sale to AT&T last
quarter established Tollgrade as the first to market with an HMS-compliant HFC
status-monitoring system.

- - Yet another success is the completed development of a significant new product
called the Digital Wideband Node. The DWN lets a customer provide DSL testing at
the Remote Terminal on Digital Loop Carrier systems with only a modest
incremental investment.

- - Regarding MCUs, there are many Digital Loop Carrier systems that have MCUs
installed. However, when we do our testability programs, we discover that many
more DLCs do not have MCUs and are not being properly tested.


        Our Versatility                                            [Graphic]
================================================================================

        - International General
          Store of Consumer
          Service Testing

        - Long-term position with
          LoopCare as the core
          RBOC OSS








================================================================================

PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.

                                                        TOLLGRADE(R)

                                                               P-H_RWB  8-02 14



In sum, despite the difficult environment, we have had broad success in selling
diversified products. We have demonstrated our versatility in selling integrated
hardware, software, and services solutions related to POTS, broadband, and
cable, both domestically and internationally, and in establishing a long-term
position with LoopCare as the core and increasingly diverse OSS in RBOC
companies.

I've been talking about recent successes. What about positioning for the future?


        Short-term Outlook                                    [Graphic]
================================================================================

        - Q2 Earnings Release Forecast

                - Third quarter sales in the range of $12 to
                  $15 million

                - EPS estimates range from break-even
                  To $0.06

                - Continuing tight conditions could push
                  Tollgrade into the lower end of the
                  range







================================================================================
PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.

                                                        TOLLGRADE(R)

                                                               P-H_RWB  8-02 15


Regarding the short-term future, when we announced our second quarter earnings,
we established goals for the third quarter, specifically sales in the range of
$12 to $15 million. Our EPS goals ranged from break-even to $0.06. The upper end
of the range assumes DigiTest and some resale products show some upside, and the
successful field trial of certain LoopCare RTUs. Our assumption, even at the
lower end of the range, is that certain customers will restock our MCU products,
which they typically do in the third quarter. Given customers' budgets, however,
some of that restocking might not occur until the fourth quarter. We want
investors to be aware of that.



        Long-term Outlook                       [Graphic]
================================================================================
        - Investing in R&D.

        - More integrated DigiTest product family

                - Cost Improvement

                - Targeted DSL Loop-Carrier Applications

                - Modem Emulation Technology

        - New MCUs As Needed

        - New LoopCare Features





================================================================================
PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.
                                                              TOLLGRADE(R)

                                                              P-H_RWB  8-02 16


Longer range, despite industry conditions and our own cutbacks, we are not
compromising our investment in research and development.

We're investing in new enhancements of our DigiTest hardware to address DSL
in-service needs and begin thinking about supporting customers' migration from
circuit to packet systems.

We're developing new MCUs as needed.

We are also developing new features, such as integrated voice response interface
that will allow field base technicians to remotely access and test facilities by
voice, and new products for local number portability. We also working on making
new hardware work with our LoopCare system.





        IN CONCLUSION...                                        [Graphic]
================================================================================

        The market is tough for telecom equipment vendors, but

        - we're winning business

        - we're generating cash

        - we're making earnings

        - and we're positioning ourselves well for the future.






================================================================================
PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.
                                                              TOLLGRADE(R)

                                                              P-H_RWB  8-02 17


In conclusion, I will repeat what I said earlier: The market is tough for
telecom equipment vendors, but we're winning business, we're generating cash,
we're making earnings, and we're positioning ourselves strategically for the
future. We intend to stay the course, and we hope our investors will do the same





                                                                   [Graphic]
================================================================================




                                   TOLLGRADE
                              COMMUNICATIONS, INC.




                               www.tollgrade.com






================================================================================
PROPRIETARY - TOLLGRADE AND AUTHORIZED CLIENTS ONLY
This document contains proprietary information that shall be distributed or
routed only within Tollgrade Communications, Inc. and its authorized clients,
except with written permission of Tollgrade.
                                                         TOLLGRADE(R)

                                                         TLGD Overview  5-02 18