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 3, 1995
NEW YORK TELEPHONE COMPANY
A New York Commission File I.R.S. Employer Identification
Corporation Number 1-3435 No. 13-5275510
1095 Avenue of the Americas, New York, New York 10036
Telephone Number (212) 395-2121
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Form 8-K NEW YORK TELEPHONE COMPANY
July 3, 1995
Item 5. Other Events
New York Incentive Regulation Plan
On July 3, 1995, New York Telephone Company (the
"Company") filed with the New York State Public Service
Commission ("NYSPSC") its acceptance of a proposed
Regulatory Plan (the "Plan"), as modified by the NYSPSC
in an order dated June 16, 1995, that would change the
manner in which the Company is regulated by the NYSPSC
over the next five to seven years. The Plan is a
performance-based plan that, subject to final approval
by the NYSPSC, will replace rate of return regulation
with incentives to invest in new technologies and
improve service. There will be no restriction on the
Company's earnings. The Plan will cap, at current
rates, the prices for such "basic" services as
residence and business exchange access, residence and
business local calling and LifeLine service, and will
reduce average prices of toll and intraLATA carrier
access services. During its term, the Plan will allow
certain prices to be adjusted to take into account an
inflation index in excess of four percent annually or
costs associated with government mandates and other
defined "exogenous" events.
The NYSPSC's modifications to the Plan include:
(a) more stringent service quality standards and rebate
provisions; (b) greater reductions in the Company's
average prices for intraLATA carrier access services
during the term of the Plan; (c) an accelerated
schedule for the provision of intraLATA
presubscription; (d) an opportunity for the Company to
earn the remaining $26.5 million of the $31 million in
revenues "set aside" in 1994 and based on a service
improvement plan; and (e) a change to the proposed
effective date of the Plan from January 1, 1995 to the
actual effective date, following approval by the
NYSPSC.
It is estimated that approximately $77 million in
revenues already "set aside" in 1995, in addition to
$122 million of the 1994 "set aside," will be released
to the Company in exchange for the various commitments
the Company accepts under the Plan. After funding
those commitments as well as the Company's 1994 service
penalty obligation, it is estimated that at least
$26 million in such released revenues will contribute
to earnings in 1995. If the Plan as modified by the
NYSPSC is approved by the NYSPSC, and depending on
whether the Plan remains in effect for five or seven
years, the Company's prices will have been decreased by
an amount that would produce an aggregate reduction of
$1.1 billion or $2.0 billion, respectively, in revenues
based on current volumes of business. The NYSPSC's
order permits interested parties a limited opportunity
for comment on the modifications and provides that, if
no further changes are required by such comments, the
Plan as modified will be approved. It is anticipated
that the NYSPSC will schedule the matter for final
consideration at its July 28, 1995 public meeting.
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Form 8-K NEW YORK TELEPHONE COMPANY
July 3, 1995
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, thereunto duly authorized.
NEW YORK TELEPHONE COMPANY
By Patrick A. Lee
Patrick A. Lee
General Counsel and Secretary
July 10, 1995
