Manipulating the Regulator

PLEASE NOTE: Manipulating the Regulator was created on 11 June 2018 and is a work in progress. Last edited December 2019

Chapter One

Why am I writing this story at the age of 75, when I should be relaxing and enjoying my retirement? Because, between 1992 and beyond, a group of small business owners were discredited by the Telstra Corporation and the Australian government in order to conceal what we uncovered: the truth surrounding Australia’s ailing copper-wire network. Instead of our very deficient telephone services being fixed, as part of a government-endorsed arbitration process that became an uneven battle we could never win, they were NOT fixed as part of the process, regardless of the hundreds of thousands of dollars, it cost the claimants to mount their claims against Telstra. Crimes were committed against us and our integrity was attacked and undermined. Our livelihoods were ruined, we lost millions of dollars and our mental health declined, yet those who perpetuated the crimes are still in positions of power, today. Our story is still actively being covered up. One of the original four Casualties of Telstra (COT for short) group died in July 2018. The other has dementia. I have this intense feeling inside that I must tell our story the way it happened not the way the archives of the Department of Communications, Technology and the Arts (DCITA) and the Telecommunication Industry Ombudsman office has recorded this event. Australia’s history regarding the COT Cases government endorsed arbitration has been doctored. One of my many Freedom of Information (FOT) request to the DCITA asked for a copy of the archive records regarding by the government regarding my 1994 Telstra v Alan Smith (Cape Bridgewater Holiday Camp) government arbitration process. What I received back from the government was a very, sanitized set of untruth about my arbitration and that of the man (my friend) who now has dementia.  It is my moral duty as a loving citizen of this fine country of ours to keep fighting to have our issues addressed, to expose systemic corruption and to gain closure for events that happened over 24- years ago. This is a true story.

Worse, before the arbitrations began the arbitrator was provided with a report which was officially submitted to all parties involved in the first four arbitrations. This report dated 13 April 1993, stated at point 5.78: “an agreed standard of service, being developed in consultation with AUSTEL (the then government communications regulator), to be applied to any case subject to settlement is essential”. It is clear from this 258-page report that no finding by the arbitrator can be brought down until proof that Telstra had fixed all of the ongoing telephone problems being experienced by these businesses. After all, what was the reason for an arbitration process if the claimants businesses were still affected by ongoing telephone problems?

In my case, regardless of the arbitrators own technical consultants advising him in their 30 April 1995 report their findings was still incomplete and they still needed extra weeks to investigate my ongoing telephone complaints that wording was removed from the draft and the draft still dated 30 April 1995 was submitted to the arbitration as the complete formal report.

AUSTEL COT Case’s formal public report

Point 5.46 on page 95

Where, as part of its direction, AUSTEL sought to obtain detailed information on each of the exchanges involved in terms of performance standards, actual performance, maintenance requirements and achievements, Telecom initially responded with advice in terms of a few generalisations. Very specific requests were necessary to obtain data which a co-operative approach may well have been expected to deliver. Indeed, throughout this inquiry, it has been apparent that Telecom has chosen to interpret AUSTEL’s request for information in the narrowest possible terms. The net effect of this was to minimise the amount of relevant data it put before AUSTEL and lengthen the process necessary to extract it.

On 21st November 2007 I received from the Australian Communications and Media Authority (ACMA), under FOI, a copy of AUSTEL’s original draft findings dated 2nd / 3rd March 1994, regarding the telephone problems experienced by the Cape Bridgewater Holiday Camp during 1988 to 1994. Copied below are some of the page numbers and points in the report. The reason I am discussing these issues here in our Manipulating the Regulator page is to show the difficulties that AUSTEL as the Government regulator had in obtaining documents from Telstra (at the time a fully Government owned Corporation). Given these difficulties, the non-supply of documents to the COT claimants during their respective arbitrations is one of the reasons I was unable to conclusively prove to the arbitrator my telephone faults were still ongoing.  The following list identifies some areas (in the AUSTEL draft report) where AUSTEL had problems with access to Telstra records on the service provided to me:

     Point 43 on page 20 As no fault report records remain in existence from Cape Bridgewater residents prior to this period, or these records have not been provided to AUSTEL, it is difficult to gauge the level of problems in the area.”

     Point 48 on page 22 AUSTEL has been hampered in assessing Telecom’s dealings with Mr Smith by Telecom’s failure to provide files relating to Mr Smith’s complaints.”

     Point 71 on pages 28 and 29AUSTEL has not been provided with the documents on which the conclusion in this briefing summary were reached, such as fault reports from other Cape Bridgewater subscribers over this period or the details of the final selector fault.  It would have been expected that these documents would have been retained on file as background to the summary.  It can only be assumed that they are contained within the documentation not provided to AUSTEL.”

     Point 140 on page 49 t should be noted that AUSTEL’s investigation of matters relating to the RCM problem has been hampered by Telecom’s failure to make available to AUSTEL a file specifically relating to the Pairs Gains Support investigation of the RCM.  The file was requested by AUSTEL on 9 February 1994.”

     Point 160 on page 55 It should be noted that it is hoped that a number of issues in regard to the Cape Bridgewater RCM will be clarified when Telecom provides the documentation requested by AUSTEL.”

Once AUSTEL was fully aware Telstra was refusing AUSTEL relevant information that would allow the government communications regulator to prepare its official report for the minister, after the regulator facilitated the arbitration and mediation processes that were to be based on information obtained from Telstra, it is obvious that AUSTEL should never have allowed those processes to proceed. AUSTEL breached its duty of care to the COT cases by permitting the arbitrations/mediations to proceed. After all, if the government could not officially order Telstra to supply records to the minister, then what hope did the COT cases ever have of obtaining the same documents?

Absentjustice-Introduction File 495, dated 22 September 1994, is a transcript taken during an oral interview at the Commonwealth Ombudsman’s Office, with AUSTEL’s representatives Bruce Matthews and John McMahon. On page 7 of this manuscript the Commonwealth Ombudsman’s officer John Wynack, asked: ‘What was the date the report was issued, the AUSTEL report? And Mr Matthews replied: ‘The final report was April – I can’t remember the date in April, but April 1994. The draft report was produced in March 1994 and Telecom received their copy of that at the time.’

Spoliation of evidence – Wikipedia

In simple terms, by AUSTEL only providing Telstra a copy of their AUSTEL’s Adverse Findings in March 1994, not only assisted Telstra during their defence of my 1994/95 arbitration it also assisted Telstra in 2006, when the government could only assess my claims on a sanitized report prepared by AUSTEL and not their AUSTEL’s Adverse Findings.

Minimizing Telstra’s liability 

AUSTEL’s Adverse Findings, at points 10, 23, 42, 44, 46, 109, 115, 130, 153, 158, 209 and 212 (below), were compiled after the government communications regulator investigated my ongoing telephone problems. Government records (see Absentjustice-Introduction File 495 to 551) show AUSTEL’s adverse findings were provided to Telstra (the defendants) one month before Telstra and I signed our arbitration agreement. I did not get a copy of these same findings until 23 November 2007, 12 years after the conclusion of my arbitration.

Page 10 – “Whilst Network Investigation and Support advised that all faults were rectified, the above faults and record of degraded service minutes indicate a significant network problem from August 1991 to March 1993.”

Point 23 –It is difficult to discern exactly who had responsibility for Mr Smith’s problems at the time, and how information on his problems was disseminated within Telecom. Information imparted by the Portland officer on 10 February 1993 of suspected problems in the RCM [Cape Bridgewater unmanned switching exchange]“caused by a lighting (sic) strike to a bearer in late November” led to a specialist examination of the RCM on March 1993. Serious problems were identified by this examination.”

Point 42 – Some important questions are raised by the possible existence of a cable problem affecting the Cape Bridgewater Holiday Camp service. Foremost of these questions is why was the test call program conducted during July and August 1992 did not lead to the discovery of the cable problem. Another important question is exactly how the cable problem would have manifested in terms of service difficulties to the subscriber.”

Point 44 – Given the range of faults being experienced by Mr Smith and other subscribers in Cape Bridgewater, it is clear that Telecom should have initiated more comprehensive action than the test call program. It appears that there was expensive reliance on the results of the test program and insufficient analysis of other data identifying problems. Again, this deficiency demonstrated Telecom’s lack of a comprehensive and co-ordinated approach to resolution of Mr Smith’s problems.” 

Point 46“File evidence clearly indicates that Telecom at the time of settlement with Mr Smith had not taken appropriate action to identify possible problems with the RCM . It was not until a resurgence of complaints from Mr Smith in early 1993 that appropriate investigative action was undertaken on this potential cause In March 1993 a major fault was discovered in the digital remote customer multiplexer (RCM) providing telephone service to Cape Bridgewater holiday camp. This fault may have been existence for approximately 18 months. The Fault would have affected approximately one third of subscribers receiving a service of this RCM.  Given the nature of Mr Smith’s business in comparison with the essentially domestic services surrounding subscribers, Mr Smith would have been more affected by this problem due to the greater volume of incoming traffic than his neighbours.”

Point 76 – One disturbing matter in relation to Mr Smith’s complaints of NRR [not receiving ring] is that information on other people in the Cape Bridgewater area experiencing the problem has been misrepresented from local Telecom regional manager to more senior manager.” 

Point 86 – From examination of Telecom’s documention concerning RVA [a recorded voice announcement – not in service] messages on the Cape Bridgewater Holiday Camp there are a wide range of possible causes of this message.” 

Point 109 – The view of the local Telecom technicians in relation to the RVA problem is conveyed in a 2 July 1992 Minute from Customer Service Manager – Hamilton to Managers in the Network Operations and Vic/Tas Fault Bureau:

“Our local technicians believe that Mr Smith is correct in raising complaints about incoming callers to his number receiving a Recorded Voice Announcement saying that the number is disconnecte. They believe that it is a problem that is occurring in increasing numbers as more and more customers are connected to AXE. [AXE – Portland telephone exchange]

Point 115 –“Some problems with incorrectly coded data seem to have existed for a considerable period of time. In July 1993 Mr Smith reported a problem with payphones dropping out on answer to calls made utilising his 008 number. Telecom diagnosed the problem as being to “Due to incorrect data in AXE 1004, CC-1. Fault repaired by Ballarat OSC 8/7/93, The original deadline for the data to be changed was June 14th 1991. Mr Smith’s complaint led to the identification of a problem which had existed for two years.”

Point 130 – On April 1993 Mr Smith wrote to AUSTEL and referred to the absent resolution of the Answer NO Voice problem on his service. Mr Smith maintained that it was only his constant complaints that had led Telecom to uncover this condition affecting his service, which he maintained he had been informed was caused by “increased customer traffic through the exchange.”  On the evidence available to AUSTEL it appears that it was Mr Smith’s persistence which led to the uncovering and resolving of his problem – to the benefit of all subscribers in his area”.

Point 153 –A feature of the RCM system is that when a system goes “down” the system is also capable of automatically returning back to service. As quoted above, normally when the system goes “down” an alarm would have been generated at the Portland exchange, alerting local staff to a problem in the network. This would not have occurred in the case of the Cape Bridgewater RCM however, as the alarms had not been programmed. It was some 18 months after the RCM was put into operation that the fact the alarms were not programmed was discovered. In normal circumstances the failure to program the alarms would have been deficient, but in the case of the ongoing complaints from Mr Smith and other subscribers in the area the failure to program these alarms or determine whether they were programmed is almost inconceivable.”

Point 158 – “The crucial issue in regard to the Cape Bridgewater RCM is that assuming the lightning strike did cause problems to the RCM om late November 1992 these problems were not resolved till the beginning of March 1993, over 3 months later. This was despite a number of indications of problems in the Cape Bridgewater area. Fault reports from September 1992 also indicate that the commencement of problems with the RCM may have occurred earlier than November 1992. A related issue is that Mr Smith’s persistent complaints were almost certainly responsible for an earlier identification of problems with the RCM than would otherwise have been the case.”

Point 209  “Cape Bridgewater Holiday Camp has a history of service difficulties dating back to 1988. Although most of the documentation dates from 1991 it is apparent that the camp has had ongoing service difficulties for the past six years which has impacted on its business operations causing losses and erosion of customer base.”

Point 210 – “Service faults of a recurrent nature were continually reported by Smith and Telecom was provided with supporting evidence in the form of testimonials from other network users who were unable to make telephone contact with the camp.”

Point 211 – “Telecom testing isolated and rectified faults as they were found however significant faults were identified not by routine testing but rather by the persistence-fault reporting of Smith”.

Point 212 – In view of the continuing nature of the fault reports and the level of testing undertaken by Telecom doubts are raised on the capability of the testing regime to locate the causes of faults being reported.”

Amazingly, even though the arbitrator’s technical consultants – one from Canada, the other from Australia – warned the arbitrator, at point 2.23 in their final arbitration evaluation report, that there were “Continued reports of 008 faults up to the present. As the level of disruption to overall CBHC [Cape Bridgewater Holiday Camp]service is not clear, and fault causes have not been diagnosed, a reasonable expectation is that these faults would remain ‘open’, the arbitrator Dr Gordon Hughes refused to allow these two arbitration consultants the extra weeks they needed to investigate these problems. Chapter One in our Prologue page shows the arbitration project manager John Rundell (who now operates an arbitration centre in Melbourne) knowingly misinformed the Telecommunications Industry Ombudsman (TIO) in his 15 November 1995 letter concerning these faults being left open. So not only was I battling Telstra’s false witness statements in my arbitration and the concealment of AUSTEL’s Adverse Findings against Telstra, I also had to contend with the arbitration project manager’s false statements to the TIO (the administrator of my arbitration).

Chapter Two

I ask that the reader takes into consideration the following very serious matter of AUSTEL secretly allowing Telstra to address some of my unaddressed arbitration claim documents without the arbitrator or I being involved (see Chapter Thirteen and Fourteen – Arbitrator / Part Three). That AUSTEL allowed Telstra to use the witness statement of Ross Anderson in order to address the ongoing RVA May 1994 issues is astounding, to say the least. Telstra and I signed the arbitration agreement, on 21 April 1994: there was NO amendment signed by me allowing the government to enter an assessment process with Telstra to address the more adverse findings without the arbitrator being present or me having any input in that process. There was no side agreement in the arbitration agreement Telstra and I signed that allowed any of my arbitration claim documents to be addressed by anyone other than the arbitrator. For AUSTEL to have ventured into such a process with only Telstra – when it accepted Telstra’s written response clearly addressing my previous May 1994 arbitration claims concerning RVA billing – on 16 October 1995, five months after my arbitration process was concluded, was a deplorable act. Telstra addressed some of my RVA May 1995 claim documents in secret with AUSTEL.

AUSTEL asked if it could view my arbitration claim documents that were not addressed by the arbitrator. I allowed this so the government could value what should have been investigated under the arbitration agreement. On 19 December 1995, AUSTEL’s Daren Kearney took five large spiral volumes of my evidence for the government to assess, telling me AUSTEL would advise me of their findings. I have never been advised of this 16 October 1995 issue nor provided with a written response to what AUSTEL thought of the evidence that was not investigated during my arbitration.

I have, however, in my reporting on absentjustice/Part Two commented that Mr Kearney’s mini three-page report, which I only received under FOI in 2002, agreed my unaddressed 008/1800 RVA billing claims were valid.

The statements made by the hackers to Graham Schorer – that both Telstra and the government are concealing relevant documents from the COT cases – are possibly some of the most important statements made during our four arbitrations. The damage done by withholding AUSTEL’s Adverse Findings from the arbitration process can, again, be seen in the following statements made by Sue Hodgkinson, the TIO-appointed resource unit’s financial officer.

Prologue Evidence File No/17 shows Ferrier Hodgson Corporate Advisory (FHCA), the TIO-appointed arbitration resource unit, documented, in part, Telstra’s arbitration defence issues and my claim issues, such as evidence to support claims, while unaware of AUSTEL’s true findings (supplied ONLY to Telstra), which were completely different to the findings Telstra supplied the public and the arbitration process.

On page two of exhibit Prologue Evidence File No/17, when referring to my Telstra arbitration claim, Sue Hodgkinson (FHCA) states, in bullet form, her appraisal of the authenticity of my claim material:

  • “Most of the allegations are unsubstantiated and many are not verified by statutory declaration.
  • “Smith has relied upon records kept in his diaries as his primary record of complaints.
  • “The magnitude of fault complaints reported is unsubstantiated and appears overstated.”

Ms Hodgkinson is correct: I did not supply all of the required technical information to support my arbitration claim. This, of course, is mainly due to Telstra’s unethical conduct of withholding that information from me during my arbitration, even though I made requests under FOI between February 1994 and April 1995.

Firstly, because I did not receive the promised documents to support my arbitration claim, I could not substantiate my claims. Secondly, how could I verify my claim in a statutory declaration under oath if I did not have the evidence to swear that the evidence is correct? “Smith has relied upon records kept in his diaries as his primary record of complaints,” is correct.

The Commonwealth Ombudsman’s director of investigations clarified, in many letters to Telstra, that Telstra was defective in its FOI responses. This resulted in Telstra refunding me approximately 70 per cent of the unnecessary costs involved in trying to obtain my FOI documents during my arbitration. Those costs had to be proven by me and assessed by loss assessors, GAB Robins, appointed by the Commonwealth Ombudsman. This was not a compensation payment: I had to support each receipt of cost involved in trying to access that information through lawyers and professional advisors.

And thirdly, FHCA could not have noted “The magnitude of fault complaints reported is unsubstantiated and appears overstated,” had the government communications regulator (AUSTEL) also provided the arbitrator and me with a copy of its AUSTEL’s Adverse Findings (see above), as it did Telstra. The arbitrator’s findings would then have been completely different, in regards to my claims.

How could anyone, from the arbitrator to Sue Hodgkinson and Telstra, have doubted the magnitude of my fault complaints or stated they were unsubstantiated when the government itself, using documents officially accessed from Telstra, showed my business suffered significantly due to Telstra’s deficient service? AUSTEL stated:

“Cape Bridgewater Holiday Camp has a history of service difficulties dating back to 1988. Although most of the documentation dates from 1991 it is apparent that the camp has had ongoing service difficulties for the past six years which has impacted on its business operations causing losses and erosion of customer base.” (See point 209 in