ETS Payphones sold pay phones to the public via independent distributors. The pay phones were offered packaged with a site lease, a 5-year leaseback and management agreement, and a buyback agreement. Under the leaseback and management agreement, purchasers received $82 per month, a 14% annual return. Purchasers were not involved in the day-to-day operation of the pay phones they owned. 

ETS selected the site for the phone, installed the equipment, arranged for connection and long-distance service, collected coin revenues, and maintained and repaired the phones. Under the buyback agreement, ETS promised to refund the full purchase price of the package at the end of the lease or within 180 days of a purchaser’s request. In its marketing materials and on its website, ETS trumpeted the “incomparable pay phone” as “an exciting business opportunity” in which recent deregulation had “opened the door for profits for individual pay phone owners and operators.” Should these sale-and-leaseback arrangements be considered to be investment contracts that required registration under the federal securities laws? Explain.