A cryptographic analysis is presented of a new quantum key distribution protocol using phase-time coding. An upper bound is obtained for the error rate that guarantees secure key distribution. When no counts are detected in the control time slot, the protocol guarantees secure key distribution if the bit error rate in the sifted key does not exceed 50%. This protocol partially discriminates between errors due to system defects (e.g., imbalance of a fiber-optic interferometer) and eavesdropping. In the absence of eavesdropping, the counts detected in the control time slot are not caused by interferometer imbalance, which reduces the requirements for interferometer stability.
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