Senator CHERRY (7:24 PM) —On 11 November 2002, the Australian Communications Authority delivered a report to the Minister for Communications, Information Technology and the Arts on the long-running dispute between Telstra and Brisbane businesswoman Ann Garms. Mrs Garms claimed that Telstra was largely responsible for the serious losses incurred at her Tivoli restaurant because of failed phone calls in 1992-93. She argued that other Fortitude Valley businesses had similar complaints, and that she had been told by Telstra employees that a `major upgrade' of the Fortitude Valley exchange had occurred in September 1993.

Over 100 irate Telstra customers had attended an AUSTEL meeting in Fortitude Valley on 13 September 1993, with AUSTEL reporting:

A key piece of evidence she had found after many years of stonewalling by Telstra in respect of the release of documents was the Design Pak for the modifications made to the Fortitude Valley exchange in 1993. If it was true that the exchange was upgraded in September 1993, then the millions of dollars spent by Telstra in various court cases, arbitrations and Senate investigations denying that faults associated with the exchange were the cause of their problems would have been suspect. Telstra would also stand accused of having misled the parliament and the Victorian Supreme Court, as well as the commercial arbitrator.

The ACA report concludes that work done on the Fortitude Valley exchange did not constitute an `upgrade' because, in the authority's words:

Since then, Mrs Garms and her technical advisers have engaged in an extensive round of correspondence with the ACA. The ACA's response to Brian Hodge, of BC Telecommunications, in August last year is particularly instructive. Mr Hodge, a former Telstra engineer of 29 years standing, wrote to me to outline his concerns with the ACA response. He concluded that the ACA advice is technically and factually flawed:

He contrasts the view of the ACA in 2003 that the works were not `corrective' with the November 1993 report from Telstra to then regulator AUSTEL that the same suite of works were performed:

What a difference a decade makes. I quote again from Mr Hodge:

He points to the evidence from former AUSTEL technical adviser Cliff Mathieson, who told the Federal Police that a senior Telstra exchange officer had told him in July 1993:

He points to the evidence from a senior Telstra officer who dealt with the Garms complaint that, in October 1992:

He even points to former Telstra CEO Frank Blount's 1999 book where he states that the Design Paks works were performed to:

Mr Hodge says:

AUSTEL reported at the time in 1993 that:

Significantly, the ACA acknowledged on August 22 last year, after examining the Garms documents and in reply to Mr Hodge's first report, that:

This is precisely the argument that Mrs Garms put to the Supreme Court, and also to the Senate committee's working party back in 1999.

The ACA is firm and resolute in its advice to the government in November 2002, yet nine months later it acknowledges to Mr Hodge that there are significant gaps in hard information. The missing data, contained in microfiche traffic data, would, according to Mr Hodge, show that calls were being misplaced. The ACA of course disagrees and says that the data would not:

After years of trying to get the data, Telstra told Mrs Garms in 1999 that the microfiche data had `disappeared' for the specific critical period of July to November 1993. Mr Hodge concludes:

... ... ...

Stephen Scandrett, another senior telecommunications consultant, has also reviewed the ACA advice and found serious technical problems. He argues that the ACA erroneously advised the minister that `an upgrade had definitely occurred in May 1993 when the processor was upgraded', when Telstra documents clearly show that this work was preliminary to the reparenting which occurred on 12 September 1993. He argues that this and other preparation works would not have had a major effect until the reparenting of the Mitchelton exchange and routing changes, which occurred on 12 September 1993. In Telstra's own words, he argues the purpose of the May work was to `upgrade the existing processor ... for the pending recovery of the Mitchelton AXE node' which did not occur until September.

A second document relied on by the ACA refers to long-term averages on regional performance but not specific data on the performance of the Fortitude Valley exchange. That, Mr Scandrett says, would require the missing microfiche traffic data. Another document referred to the `average performance for metropolitan Queensland'—again, nothing specific about the valley. Even the standard levels that that data was reporting showed that Queensland was having service faults 10 times worse than the world's best practice and five times worse than New South Wales. Scandrett concludes:

Should we be concerned about events that occurred 10 years ago? The Senate has already tried to resolve the Garms case through a working party under the ECITA committee some five years ago. My concern is that the ACA continues to downplay the significance of these matters. If the technical experts Hodge and Scandrett are correct, the ACA has presented to the minister seriously flawed advice over a matter that is still of significant public interest. If the ACA's advice is wrong, the Senate has been misled, the Victorian Supreme Court has been misled and the Australian people and the minister have been misled. The ACA report was written in just seven days. In light of its admission some nine months later that there are significant gaps in the hard data, I think it is time that that report itself be reviewed.