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Chapter 2 - Bell Canada International Inc – COT testing process

Chapter One 

Ericsson AXE exchange problems and Telstra's ailing copperwire CAN network problems.

If BCI had tested all of the CAN, including Telstra’s pits, back in 1993, it would have instantly revealed just how bad Telstra’s copper-wire network was.

Because the faulty Ericsson AXE telephone equipment played such an important part in the COT Cases 1994 to 1999 arbitration procedure I have introduced it here along with the selling off of Lane Telecommunications Pty Ltd (the arbitration technical unit) to Ericsson the very corporation it had been commissioned to investigate. during the COT arbitrations as the following segments show. 

The five COTs whose arbitrations followed mine were later included in individual Senate estimates committee investigations into the way Telstra withheld arbitration documents from the COTs and, during those Senate investigations, a number of the helpful senators also proved deliberate fax interceptions occurred, particularly whenever George Close (COT case technical consultant) sent faxes listing the type of documents the COTs needed to request from Telstra and those faxes went from his office to the COTs. As my evidence shows, in many cases, the withheld documents were directly related to the faulty telephone exchange equipment Telstra used, even though telecommunication companies in other countries had already completely discarded that equipment or at least complained about it to the manufacturers. George’s research uncovered Telstra’s appalling decision to continue to use faulty equipment, to the detriment of their customers: this was discovered as a result of evidence I collected and gave to George, even though both the TIO and TIO-appointed arbitration technical consultants previously ignored that evidence.

After I uncovered the arbitrator and/or his arbitration resource unit acted in concert with Telstra to prevent the ongoing billing issues from being addressed during my arbitration, I contacted Amanda Davis, (AUSTEL’s previous general manager of affairs). Ms Davis had warned her subordinates, in late 1992 or early 1993, it was apparent Telstra’s network was suffering with major network faults and this should be made known to the assessors and arbitrators appointed to the COT processes. This, of course, did not happen.

Bad Bureaucrats shows why the TIO and the arbitrator should have conducted the COT arbitrations according to the original agreement reached in 1993 (as well as AUSTEL’s COT Cases Report of April 1994), which clearly stipulated Telstra would carry out the AUSTEL-designed SVTs, via the Customer Access Network (CAN), to ALL the COT businesses who were to go through assessment and/or arbitration. The arbitration technical consultants should have been the umpire of the tests, not the defendants. Yet the agreement reached between the government regulator AUSTEL and Telstra allowed for Telstra to limit the Bell Canada International testing process so it would bypass the COT cases’ customer access network CAN. This allowed Telstra more time to purchase the proper SVT equipment that would be used in the forthcoming COT arbitrations before the arbitration was concluded. This decision was made because, by the time of the 1993 negotiations, AUSTEL and the COTs had discovered how bad the copper-wire feeding the CAN actually was. The results of the SVT of each COT business was then to be provided to the arbitrator so the arbitrator could determine whether the phone and faxing problems that brought the claimants to arbitration in the first place had been properly fixed. AUSTEL designed the SVTs because it would be pointless for the arbitrator to hand down a final award if the SVT results showed the problems still existed.

As the many exhibits in our download files shows, beyond all doubt, Telstra executives chose to lie under oath, claiming that the SVT process met all of the regulatory requirements when, at my premises at least, the mandatory incoming SVT testing to my three service lines were in fact grossly deficient (see Arbitrator File No/110).

If the arbitrator had actually appointed an independent umpire to ensure the defendants (Telstra) conducted the SVT process properly, according to AUSTEL’s mandatory requirements, that umpire would have known no such incoming tests were conducted to my service lines through the CAN.

Absent Justice - Telstra Executives Lied under oath

Between 29 September 1994, when this SVT process was supposed to be carried out, and 10 October 1994, my partner and I sent individual statutory declarations to the arbitrator, the TIO, AUSTEL and Telstra and I continued to write letters regarding this failed process until 15 February 1995 (see Bad Bureaucrats File No/15). After my letters to the TIO and arbitrator on 2 and 10 October 1994, I telephoned the TIO’s office to demand that, as administrators of my arbitration, they call on DMR Australia Pty Ltd, the organisation assigned to assess any technical matters that arose, to fulfil their role in relation to the SVTs: my request was denied.

A Telstra internal email, dated 13 December 1993, shows AUSTEL’s deputy chair Dr Bob Horton allowed Telstra to limit their mandatory parameter testing to only those customers that Telstra stated required testing, i.e.,

“This E-Mail is to alert you to a possible regulatory interaction with the current work on ‘COTS Cases’ and ongoing work with AUSTEL on network performance.

“As you know, a Ministerial Direction gave AUSTEL power to set end-to-end network performance standards. …

“The AUSTEL staff member leading the group originally wanted a very wide list of mandatory parameters but after discussion with Bob Horton and a presentation to the Standards Advisory Committee by [name redacted], AUSTEL have agreed to limit the scope of the initial work to the few parameters our customer surveys had shown as being of most concern.” (See Arbitrator File No/72)

Dr Horton was AUSTEL’s acting chair at the time. It is easy to see just how bad this situation was for me by simply linking this limiting of the mandatory testing with another Telstra internal email, dated 15 November 1993, which states that:

“Parameters for Cape Bridgewater RCM have been obtained, but I don’t believe them – I am attempting to check them. Some of the people supplying this information live in ‘old Telecom’!” (See Arbitrator File No/73)

The following is from the transcript of an oral interview of AUSTEL’s representatives, Bruce Matthews and John McMahon, conducted at the Commonwealth Ombudsman’s Office on 22 September 1994. On page 7 of this transcript, John Wynack asks, “What was the date the report was issued, the AUSTEL report?”

AUSTEL’s representative replies, “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.” (As we have shown throughout this website, See Falsification Reports File No/4)

While this statement by one of AUSTEL’s representatives makes it clear Telstra received a copy of AUSTEL’s draft findings, NONE of the information in this report, which enabled the government communications regulator (AUSTEL) to arrive at their adverse findings against the Telstra Corporation, was ever made available to the COT claimants during their arbitrations. The version we received in 2007 was certainly not the draft version we viewed in the lock-up meeting.


I have highlighted below in yellow what I consider to be fraud of the highest level. Fraud by a government regulator so as to minimize the government liability to its citizens on such a significant issue is hinging on crminal conduct. 

The following letters, dated 8 and 9 April 1994, to AUSTEL’s chair from Telstra’s group general manager, suggests AUSTEL was far from truly independent, but rather could be manipulated to alter their official findings in their COT reports, just as Telstra requests in many of the points in this first letter. For example, Telstra writes:

“The Report, when commenting on the number of customers with COT-type problems, refers to a research study undertaken by Telecom at Austel’s request. The Report extrapolates from those results and infers that the number of customers so affected could be as high as 120 000. …

And the next day:

“In relation to point 4, you have agreed to withdraw the reference in the Report to the potential existence of 120,000 COT-type customers and replace it with a reference to the potential existence of “some hundreds” of COT-type customers” (See Open Letter File No/11)

Point 2.71 in AUSTEL’s April 1994 formal report notes:

“the number of Telecom customers experiencing COT type service difficulties and faults is substantially higher than Telecom’s original estimate of 50”.

The fact that Telstra (the defendants) was able to pressure the government regulator to change its original findings in the formal 13 April 1994 AUSTEL report is deeply disturbing. The 120,000 other customers – ordinary Australian citizens who were experiencing COT-type problems – are not referred to in the Department of Communications Information Technology and the Arts (DCITA) report (see Senate Evidence File No 28), although this was used by them to determine the validity of the COT claims.

For a government regulator to reduce their findings from 120.000 COT type complaints to read just 50 or more COT-type customer complaints is one hell of a lie told to its citizens. Were the governments downplaying of the Ericsson AXE fault complaints part of the overall collusion which involved the purchasing of Lane Telecommunications Pty Ltd who often worked on government contracts? 

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How can one publish a true account of what happened during various Australian Government-endorsed arbitrations without attaching exhibits to support the facts, as we have been forced to do due to the rampant corruption within the government bureaucracy? How can the author prove that government public servants fed privileged information to the then Australian Government-owned telecommunications carrier (the defendants) but also concealed the same documentation from the claimants, their fellow Australian citizens?

Additionally, how can one tell a story so unbelievable that even the author doubts the authenticity of what they are writing until they check their records before continuing with the story? How can one expose collusion between an arbitrator, various appointed government watchdogs (umpire), and the defendants? How can one also expose that the defendants in an arbitration process (the once government-owned telecommunications carrier) used equipment connected to their network to screen faxed material leaving your office? 

Moreover, how can one expose that the defendant's advisors stored the screened material without the author's knowledge or consent before redirecting it to its intended destination, where, in some cases, the more relevant information was never forwarded? The defendants (the Telstra Corporation) were using this screened material to benefit their arbitration defence to the detriment of the claimants.

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“Only I know from personal experience that your story is true, otherwise I would find it difficult to believe. I was amazed and impressed with the thorough, detailed work you have done in your efforts to find justice”

Sister Burke

“…your persistence to bring about improvements to Telecom’s country services. I regret that it was at such a high personal cost.”

The Hon David Hawker MP

“Only I know from personal experience that your story is true, otherwise I would find it difficult to believe. I was amazed and impressed with the thorough, detailed work you have done in your efforts to find justice”

Sister Burke

“A number of people seem to be experiencing some or all of the problems which you have outlined to me. …

“I trust that your meeting tomorrow with Senators Alston and Boswell is a profitable one.”

Hon David Hawker MP

“I am writing in reference to your article in last Friday’s Herald-Sun (2nd April 1993) about phone difficulties experienced by businesses.

I wish to confirm that I have had problems trying to contact Cape Bridgewater Holiday Camp over the past 2 years.

I also experienced problems while trying to organise our family camp for September this year. On numerous occasions I have rung from both this business number 053 424 675 and also my home number and received no response – a dead line.

I rang around the end of February (1993) and twice was subjected to a piercing noise similar to a fax. I reported this incident to Telstra who got the same noise when testing.”

Cathy Lindsey

“…the very large number of persons that had been forced into an arbitration process and have been obliged to settle as a result of the sheer weight that Telstra has brought to bear on them as a consequence where they have faced financial ruin if they did not settle…”

Senator Carr

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