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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) October 13, 1994
Rochester Telephone Corporation
(Exact name of registrant as specified in its charter)
New York 1-4166 16-0613330
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
180 South Clinton Avenue
Rochester, New York 14646
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (716) 777-1000
100 Midtown Plaza, Rochester, New York
(Previous address of principal executive offices)
Item 5 Other Events
On October 13, 1994, Rochester Telephone Corporation
("RTC") announced that the New York State Public Service
Commission approved the Company's Open Market Plan.
As permitted by General Instruction F to Form 8-K, the
Registrant incorporates by reference the information contained in
the press release which is filed as an Exhibit to this Report on
Form 8-K.
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 of the undersigned hereunto duly authorized.
Rochester Telephone Corporation
(Registrant)
/s/ Barbara J. LaVerdi
Dated: October 14, 1994 By: -------------------------
Barbara J. LaVerdi
Assistant Secretary
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EXHIBIT INDEX
Exhibit Number Description
- - -------------- ------------
99 Press Release dated Filed herewith
October 13, 1994 regarding
the New York State Public
Service Commission's approval
of the registrant's Open
Market Plan
Rochester Tel Center Press Conference Scheduled
180 South Clinton Avenue for 10/18 at 2 p.m. See last
Rochester, New York 14646-0700 page for details and contacts
Media Relations:
Phone 716-777-1090
Fax 716-325-4624
For Release: October 13, 1994
Summary: EARNINGS CAP IS LIFTED AT ROCHESTER TEL
Open Market Plan is Approved by Public Service
Commission in Landmark Decision
Rochester, New York -- October 13, 1994 -- Rochester Tel's (NYSE: RTC)
pioneering effort to obtain unlimited earnings potential and open its upstate
New York market to competition won final approval today by the New York
State Public Service Commission.
The company's Open Market Plan and Corporate Restructuring, which
was approved without change by a unanimous vote of the five commissioners,
is slated to go into effect January 1, 1995, pending approval by Rochester
Tel's shareowners in December.
Under the Open Market Plan:
* The company will receive unprecedented regulatory relief.
The operating telephone company in Rochester, New York will no longer be
regulated by the monopoly standard of rate-of-return regulation, but
instead by pure price cap regulation. There will be no sharing with
ratepayers or cap on the company's earning potential;
* The local market for telephone service in Rochester will be
opened up to full competition;
* Consumer prices in Rochester will be reduced and frozen for
seven years.
The company's chief executive officer, Ronald L. Bittner, called
the decision an "historic breakthrough" for Rochester Tel.
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"The PSC approval represents a landmark decision for the entire
telecommunications industry and our customers," said Bittner. "Open
competition is the future, and we intend to make this first effort in
Rochester a model for the rest of the country. Healthy competition is
beneficial to customers and to shareowners, and we are determined to
prove it," he said.
In addition to the removal of the earnings cap, other provisions of
the plan include:
* Rochester Tel will divide its Rochester operations into a
competitive company and a network company. The competitive company,
called R-Com in the plan, will be allowed to price its services
according to market conditions. Its network company, called R-Net, will
unbundle network features and functions for both retail and wholesale
customers, and will operate under genuine price cap regulation.
* Rochester area consumers will enjoy an 11 percent price reduction
in basic service effective January 1, 1995, a result of the elimination
of the monthly charge for touchtone service. Touchtone charges for
business customers will be eliminated by January 1, 1997. Basic rates
will be frozen at current levels and rate reductions over the course of
the next seven years will total $21 million. Access charges that long
distance and cellular companies pay to use the Rochester Tel network
will fall by more than 27 percent over the life of the plan.
* A holding company will be formed to manage all of the company's
subsidiaries. The holding company, which will be incorporated in New
York State, will have the flexibility to issue securities, make
acquisitions or enter new lines of business.
* There will be no royalties imposed against the company during
the seven-year life of the plan.
* The company will change its corporate name, also identifying a
new name for its competitive company.
Bittner said that while the PSC approval marks the end of a traditional
regulatory process, execution of the Open Market Plan heralds the
beginning of a new approach for the telecommunications industry.
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"Rochester Tel's new structure and the pressure from the ensuing
competition will push the company to roll out new products and services
faster," he stated, "prompting the offering of more competitively-priced
packages.
"In the coming weeks and months, we will be announcing a number of
changes and activities at Rochester Tel -- all aimed at increasing
customer satisfaction beyond the levels we now enjoy. We not only want
to meet head-on the competition we've invited in, but out-perform them
as well."
Corporate vice president John K. Purcell, who represented
Rochester Tel during the proceedings before the PSC, applauded the New
York Commission for its leadership in regulatory reform. "Everybody
else talks about reinventing the regulatory process, but the New York
Public Service Commission has actually done it," Purcell said. "A
remarkable experiment will be taking place in Rochester, New York, a
tribute to the PSC's foresight."
Purcell also commended the New York State Department of Economic
Development and its chairman, Vincent Tese, who endorsed the plan.
"This serves as a powerful signal that the State of New York
understands the critical link between competition and a healthy business
climate," he said. Other signatories to the plan included the
Communications Workers of America, Time Warner, the New York State
Telephone Association, and the Public Utility Law Project.
Rochester Tel initiated the Open Market Plan in February of 1993.
After a year and a half of negotiation and regulatory process, a joint
stipulation agreement was signed by the company and the PSC staff on May
16 of this year. Public hearings were held in Rochester in mid-August
and on September 22, Administrative Law Judge Vincent P. Furlong issued
a report recommending that the Commission approve the plan without
change, concluding that it "strikes a fair balance of interests of the
ratepayers, investors, competitors and the public."
Rochester Telephone Corporation is a provider of integrated
telecommunications solutions to more than 1.5 million customers in the
Northeast, South and Midwest through its long distance, local telephone
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and wireless communications operations. On October 9, the company
signed a letter of intent to acquire WCT Communications, a long distance
company based in California. That acquisition is still pending a
definitive agreement and various approvals.
Customers who have questions about how the Open Market Plan will
affect them can call the company's toll-free, 24-hour automated
information line at 1-800-477-9371.
ROCHESTER TEL HAS SCHEDULED A PRESS CONFERENCE FOR
TUESDAY, OCTOBER 18, 1994, 2 P.M. EASTERN STANDARD TIME TO
INTRODUCE ITS NEW CORPORATE IDENTITY, INCLUDING THE NEW NAME
OF THE COMPANY. THE PRESS CONFERENCE WILL BE HELD AT
ROCHESTER TEL CENTER, 180 S. CLINTON AVENUE, ROCHESTER, NEW
YORK, ENTERPRISE ROOM, LOBBY LEVEL. AUDIO CONFERENCING IS
AVAILABLE BY CALLING 1-800-834-3606.
REMOTE VIDEOCONFERENCING SITES FOR THE PRESS CONFERENCE
ARE LOCATED IN SEVERAL CITIES IN THE NORTHEAST, SOUTH AND MIDWEST.
TO INQUIRE ABOUT ATTENDING A REMOTE VIDEOCONFERENCING SITE,
CALL LINDA CROCIATA AT 716-777-7693.
Contact: Catherine A. Duda
Vice President Corporate Communications & Investor Relations
(716) 777-5897
