11-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 11-K

þ ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 1, 2007 to December 31, 2007

OR

o TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                     

Commission File Number, 0-11174

WARWICK VALLEY TELEPHONE COMPANY 401(k) PLAN

(Full title of the Plan)

WARWICK VALLEY TELEPHONE COMPANY

47 Main Street
P.O. Box 592
Warwick, New York 10990

(Address of principal executive office)

(Name of Issuer and address of principal executive office)

WARWICK VALLEY TELEPHONE COMPANY 401(k) PLAN

FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2007

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WARWICK VALLEY TELEPHONE COMPANY 401(k) PLAN

INDEX TO FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS

Report of Independent Registered Public Accounting Firm	3
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS, as of December 31, 2007 and 2006	4
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, For the Year Ended December 31, 2007	5
Notes to Financial Statements	6-10
Schedule of Assets (Held at End of Year) as of December 31, 2007 *	11
Signatures	12
Exhibit Index	13
Consent Forms	14
Certification	15

* Other schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are not applicable.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Participants and Administrator of
Warwick Valley Telephone Company 401(k) Plan

We have audited the accompanying statements of net assets available for benefits of Warwick Valley Telephone Company 401(k) Plan (the “Plan”) as of December 31, 2007 and 2006, and the related statement of changes in net assets available for benefits for the year ended December 31, 2007. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of Warwick Valley Telephone Company 401(k) Plan at December 31, 2007 and 2006, and the changes in net assets available for benefits for the year ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedule of Assets (Held at End of Year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

WithumSmith+Brown, PC
Red Bank, New Jersey
June 27, 2008

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WARWICK VALLEY TELEPHONE COMPANY 401(k) PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2007 AND 2006

	2007		2006
Investments:
Cash and Cash Equivalents	$	4,108,002	$	3,484,005
Warwick Valley Telephone Company Stock		1,371,595		2,242,478
Registered Investment Companies		7,707,717		7,587,888
Receivables:
Contribution Receivable
Employer		30,854		27,396
Employee		10,157		—
Dividend Receivable		—		151,657
Participant Loans Receivable		237,475		190,742
TOTAL ASSETS	$	13,465,800	$	13,684,166
NET ASSETS AVAILABLE FOR BENEFITS	$	13,465,800	$	13,684,166

The accompanying notes are an integral part of these financial statements

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WARWICK VALLEY TELEPHONE COMPANY 401(k) PLAN

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

FOR THE YEAR ENDED DECEMBER 31, 2007

ADDITIONS:
Participant loan interest income	$	15,514
Interest and dividends		1,025,484
		1,040,998
Contributions:
Participants’		570,812
Employer’s		413,972
		984,784
TOTAL ADDITIONS		2,025,782
DEDUCTIONS:
Benefits paid to participants		1,220,845
Net decrease in fair value of investments		1,023,303
TOTAL DEDUCTIONS		2,244,148
NET DECREASE		(218,366	)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year		13,684,166
End of year	$	13,465,800

The accompanying notes are an integral part of these financial statements

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WARWICK VALLEY TELEPHONE COMPANY 401(k) PLAN

NOTES TO FINANCIAL STATEMENTS

1. DESCRIPTION OF PLAN

The following description of the Warwick Valley Telephone Company (“Company”,“Plan Sponsor”) 401(k) Plan (“Plan”) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.

General

The Plan is a defined contribution plan covering all eligible employees of the Company who are scheduled to work 1,000 hours per year. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”) and has been amended and restated in its entirety to comply with the GUST remedial amendment requirement and minimum distribution thresholds.

Each year, participants may contribute up to 100% of pretax annual compensation, as defined in the Plan, subject to certain IRS limitations. Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan currently offers a variety of registered investment companies, as well as the stock of the Company, as investment options for participants. Up until September 1, 2007, the Company matched 100% of each participant’s contributions, subject to certain limitations. These matching contributions ranged from 6% to 9% of the annual compensation of eligible participants. On September 1, 2007, the Plan was amended to reflect the change in the Company’s contribution for Management Employees to 50% of 9% which was a change from 100% of 9%. The Plan permits eligible participants, as defined in the Plan, to rollover cash or other property acceptable to the Plan Administrator from another qualified plan in addition to making qualified voluntary participant contributions.

Participant Accounts

Each participant’s account is updated daily to reflect participant and employer activity (contributions, fund transfers, loan repayments, loans and/or withdrawals) and the earnings or losses of the Plan assets in the account.

Vesting

Participant accounts are fully vested and non-forfeitable at all times.

Participant Loans

Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum of $50,000 or 50% of their account balance, whichever is less. The loans are secured by the balance in the participant’s account and bear interest at prime plus 1%, with prime being the rate published on the first business day of the month in which the loan is requested. The interest rate does not change for the duration of the loan. Principal and interest is paid ratably through weekly payroll deductions over a period not to exceed five years unless the loan is for the purchase of a primary residence for which a term of up to fifteen years is permitted.

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WARWICK VALLEY TELEPHONE COMPANY 401(k) PLAN

NOTES TO FINANCIAL STATEMENTS

Payment of Benefits

On termination of service due to disability or retirement, a participant may elect to receive either a lump-sum amount equal to the value of the participant’s vested interest in his or her account, or equal periodic payments. For termination of service due to death, a participant’s beneficiary may receive the value of the vested interest in the participant’s account as a lump-sum distribution.

If a participant has any portion of their account invested in Warwick Valley Telephone Company Stock, he or she may take the stock as an “in-kind” distribution or take the stock as cash. “In-kind” distribution means the participant will receive a stock certificate for the whole shares in his or her account. Fractional shares will be paid in cash. If the participant wishes to take the stock portion of their account as a cash distribution, the Company will buy the stock at the bid price on the day the withdrawal is processed.

Withdrawals

Participants may make withdrawals, subject to federal income taxes, under the hardship provisions of the Plan while still employed by the Company.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The accompanying financial statements of the Plan have been prepared on the accrual method of accounting. Contributions due from the Company are recorded on the accrual basis and are remitted weekly. Benefits are recorded when paid.

Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates.

Risks and Uncertainties

The Plan provides participants with various investment options: money market and fixed income securities, bonds, and equity funds, as well as the stock of Warwick Valley Telephone Company. All investment securities are exposed to some type of risk, including, but not limited to, exposure to changes in interest rates, market fluctuations, economic conditions, and currency devaluation. Due to the level of risk associated with certain investment securities, it is possible that changes in near term risk factors could materially affect participants’ account balances and the amounts reported in the Statement of Net Assets Available for Benefits and the Statement of Changes in Net Assets Available for Benefits.

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WARWICK VALLEY TELEPHONE COMPANY 401(k) PLAN

NOTES TO FINANCIAL STATEMENT

Cash and Cash Equivalents

The Plan considers cash accounts which are not subject to withdrawal restrictions or penalties, and highly liquid debt instruments with a maturity of three months or less to be cash equivalents. Cash and cash equivalents are comprised of cash on hand not yet invested and investments made to the Schwab Money Market Fund.

Investment Valuation and Income Recognition

The Plan’s investments are stated at fair value. Shares of registered investment companies are valued at net asset value and the Company’s common stock is valued at quoted market prices. The Company’s common stock is traded on the NASDAQ.

Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date. Interest and dividends include distributions from the investments in registered investment companies, interest from the money market fund and dividends from the Company stock.

Plan Expenses

Expenses related to the administration of the Plan have been paid by the Company. These costs represent professional services and amounted to $27,681 for the year ending December 31, 2007.

Transaction fees incurred by the trustee and registered investment companies are absorbed in investment income and are not readily determinable.

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WARWICK VALLEY TELEPHONE COMPANY 401(k) PLAN

NOTES TO FINANCIAL STATEMENT

3. INVESTMENTS

The fair value of investments at December 31, 2007 and 2006 are as follows:

	12/31/2007			12/31/2006
Schwab Money Market Fund	$	4,059,794	*	$	3,474,253	*
Cash		48,208			9,752
Warwick Valley Common Stock		1,371,595	*		2,242,478	*
Managers Fremont Bond		449,116			541,506
Fidelity Magellan Fund		632,256			558,500
Fidelity Growth and Income Fund		1,060,587	*		1,143,938	*
Fidelity Puritan Fund		380,779			370,624
Vanguard Wellington Fund		991,444	*		960,713	*
Jensen Portfolio Fund		736,945	*		683,135	*
Weitz Value Fund		968,995	*		1,222,942	*
Calamos Growth A Fund		384,943			237,783
ING GNMA Income Fund		213,161			191,134
Julius Baer International Equity A Fund		885,311	*		933,345	*
Royce Pennsylvannia Mutual Fund		581,937			516,483
Fundamental Investors		422,243			227,785
TOTAL INVESTMENTS	$	13,187,314		$	13,314,371

* Individual investments representing 5% or more of the Plan’s net assets.

The Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value during the year ending December 31, 2007 as follows:

Registered Investment Companies	$	(286,960	)
Warwick Valley Telephone Company Common Stock		(736,343	)
	$	(1,023,303	)

The Plan holds investments at December 31, 2007 and 2006 in the Plan sponsor common stock amounting to $1,371,595 and $2,242,478, respectively. This investment represents 10% and 17% of total investments at December 31, 2007 and 2006, respectively. A significant decline in market value of the Plan Sponsor’s common stock would significantly affect the net assets available for benefits.

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WARWICK VALLEY TELEPHONE COMPANY 401(k) PLAN

NOTES TO FINANCIAL STATEMENT

4. FEDERAL INCOME TAX STATUS

The Internal Revenue Service has determined and informed the Company by a letter dated March 19, 2002 that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (”IRC”). Although the Plan has been amended since receiving the determination letter, Management and the Plan’s legal counsel represent that the Plan continues to be designed and operated in accordance with applicable requirements of the IRC and ERISA. Accordingly, the Plan is exempt from paying income taxes.

5. PLAN TERMINATION

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will continue to have a non-forfeitable interest in their Plan account.

6. PARTY-IN-INTEREST TRANSACTIONS

Certain expenses of administration and servicing of the Plan, including payroll related expenses of administrative and clerical personnel and fees of the trustee are paid by the Company without charge to the Plan. The Plan has certain investments that qualify as party-in-interest investments. These would consist of the Plan’s investments in the Warwick Valley Telephone Company Common Stock and the Schwab Money Market Fund, as the Charles Schwab Trust Company is the trustee for the Plan.

7. SUBSEQUENT EVENT

As a result of the union contract recently negotiated between the Company and the International Brotherhood of Electric Workers Union Local 503, an amendment was made to the Plan effective June 1, 2008. This amendment reflects a change in the Company’s matching contribution for participants in the plan represented by the Union of 100% of up to 4% of annual pay. It also included a stipulation that if in any plan year during the contract term in effect between May, 1 2008 and April 30, 2011, that the Company reaches positive Operating Income as measured by Earnings Before Interest and Taxes, the match for the union employees will increase to 100% of the salary deferral contributions up to 4 ¹/2% of annual pay.

Also effective June 1, 2008 was an adjustment on the Company’s matching contributions for the Management employees who are participants in the plan. The company matching contribution will now be 100% of the salary deferral contributions up to 4 ¹/2% of annual pay.

10

WARWICK VALLEY TELEPHONE COMPANY 401(k) PLAN

SCHEDULE H LINE 4i SCHEDULE OF ASSETS (HELD AT END OF YEAR)

DECEMBER 31, 2007

EIN: 14-1160510
PN: 006

				(e) Current
(a)	(b) Idenitity of Issue	( c) Description	(d) Cost	Value
	Cash	Cash and Cash Equivalent	**	$	48,208
*	Schwab Money Market Fund	Cash and Cash Equivalent	**		4,059,794
*	Warwick Valley Telephone Company	Common Stock	**		1,371,595
	Managers Fremont Bond	Registered Investment Company	**		449,116
	Fundamental Investors	Registered Investment Company	**		422,243
	Fidelity Magellan Fund	Registered Investment Company	**		632,256
	Fidelity Growth and Income Fund	Registered Investment Company	**		1,060,587
	Fidelity Puritan Fund	Registered Investment Company	**		380,779
	Vanguard Wellington Fund	Registered Investment Company	**		991,444
	Jensen Portfolio Fund	Registered Investment Company	**		736,945
	Weitz Value Fund	Registered Investment Company	**		968,995
	Calamos Growth A Fund	Registered Investment Company	**		384,943
	ING GNMA Income Fund	Registered Investment Company	**		213,161
	Royce Pennyslvannia Mutual Fund	Registered Investment Company	**		581,937
	Julius Baer International Equity Fund	Registered Investment Company	**		885,311
	TOTAL INVESTMENTS				13,187,314
	Participant loans (rates 5.00% - -9.25% from 2008-2018)				237,475
				$	13,424,789

*	Denotes party-in-interest
**	Cost not required for participant-directed investments

See auditors’ report

11

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Warwick Valley Telephone Company, the Plan Sponsor, has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.

Warwick Valley Telephone Company 401(k) Plan
By:	/s/ Joyce Stoeberl
Plan Administrator

Date: June 27, 2008

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EXHIBIT INDEX

Exhibit Number	Exhibit
23	Consent of Independent Registered Public Accounting Firm
99	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

13

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Forms S-8 (333-46836 and 333-64799) of Warwick Valley Telephone Company of our report dated June 27, 2008 relating to the financial statements of the Warwick Valley Telephone Company 401(k) Plan, which appears in this Form 11-K.

WithumSmith+Brown, PC
Red Bank, New Jersey
June 27, 2008

14

EX-99

Exhibit 99

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Warwick Valley Telephone Company 401(k) Plan on Form 11-K for the period ending December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joyce Stoeberl, Plan Administrator, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

     (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all material respects, the financial conditions and results of operations of the Company to the best of my knowledge.

A signed original of this written statement required by Section 906 has been provided to Warwick Valley Telephone Company and will be retained by Warwick Valley Telephone Company and furnished to the Securities and Exchange Commission or its staff upon request.

By:	/s/ Joyce Stoeberl
Joyce Stoeberl Plan Administrator June 27, 2008

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