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Davies; Joshua
From: Sent: To: Lever, David Wednesday, 28 September 20055 :17 AM Davies, Joshua; Vajrabukka, Nikki; Madsen, Andrew; Bryant, Simon

Subject: RE : FYI / COTs mtgs with MO and Telstra Josh Thanks for this . I have made some comments in the text below, for possible further discussion at our 11.30am meeting today. DL

From: Davies, Joshua Sent: Monday, 26 September 20055:37 PM To: Vajrabukka, Nikki; Lever, David; Madsen, Andrew . Subject: FYI I COTs mtgs with MO and Telstra Nikki, David, And rew FYI 1. Meeting 1 - DC IT A and MO On Friday 23 September, Andrew Madsen, Nikki Vajrabukka and Joshua Davies attended the Minister's Office and met with Matt Stafford and Ed Harvey to discuss Senator Joyce's request for commitments in relation to outstanding compensation claims against Telstra. 1.1 The commitment Matt provided the text of the request from Senator Joyce and the Minister's response, as follows: Letter from Senator Joyce (13 Sept): 'Finally, I seek closure on any compensatory commitments given by the Minister or Telstra regarding prior legal issues currently outstanding. We have had a number of representations from people claiming that they have been given warrants of compensation by people in the Department and people in the previous Telstra Executive, although I have no ability to judge the veracity of these claims, I have given these people my commitment that i will follow them up.' ) Letter from Senator Coon an (13 Sept): 'These claims are against Telstra. I agree that there should be finality for all outstanding "COT" cases and related disputes. I believe that the most effective way to deal with these is for me to appoint an independent assessor to review the status of all outstandir:: claims and to provide a basis for any sustainable claims that have not been resolved through earlier processes to negotiate a possible settlement with Telstra.' Matt indicated that the intention was to achieve the Minister's commitment to Senator Joyce with a minimal impacLa.n the QeQartment. The Department conveyed that it had received legal advice stating that the Minister's statement did not give rise to any legal obligations . [COULD I HAVE A COpy OF THE ADVICE.] A number of terms in the Minister's response were identified as giving some flexibility to the manner in which the Minister's commitment to Senator Joyce could be achieved . These include 'outstanding COT cases' and 'related disputes', ' to deal with these', 'independent', 'status', 'outstanding claims ' , 'basis for any sustainable claims' , 'not been resolved through earlier processes' , 1.2 Potential classes of claimants covered by the commitment Three classes of claimants were identified as potentially falling within the scope of 'outstanding COT cases and related disputes': (1) The Original COT claimants;[THERE WERE 5 'ORIGINAL COT CASES' AS SET OUT IN THE

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AUSTEL APRIL 1994 REPORT . SOLD BUSINESS BEFORE THE AUSTEL REPORT AND CAN BE IGNORED. THERE WERE A FURTHER y j lCASES REFERRED BY AUSTEL TO TELECOM . ALL OF THESE CASES ARE NAMED IN THE . :tUSTEL REPORT. THE 'ORIGINAL 4' HAD THEIR OWN FAST TRACK ARBITRATIONS CONDUCTED BY SPECIAL ARBITRATOR AND ADMINISTERED BY THE TIO. THE SUBSEQUENT 12 ALSO HAD SPECIAL ARBITRATIONS ,lI,VAILABLE UNDER THE TIO. I SUGGEST WE CONFINE ANY ASSESSMENT TO THESE 16 CASES. IT IS REASONABLE TO ARGUE THAT THE MINISTER'S REFERENCE TO "'COT" CASES' ABOVE IS A REFERENCE TO THE ORIGINAL 4 COT CASES AND THAT 'RELATED DISPUTES' REFERS TO THE OTHER 12 CASES. (2) 'Wannabe COT cases';[1 ASSUME THIS REFERS TO CASES NOT INCLUDED IN THE H OCCURRED LATER THAN THE AUSTEL REPORT, INCLUDING ETC . THERE ARE PROBABLY ABOUT 6 OR 7 OF THESE CASES. THEY WERE GENERALLY SUBJECT TO TIO INVESTIGATIONS, USING ITS NORMAL PROCEDURES, INCLUDING STANDARD ARBITRATION PROCEDURES WHERE APPROPRIATE. I STRONGLY SUGGEST WE DO NOT INCLUDE THESE CASES IN ANY ASSESSMENT BECAUSE IT WOULD OPEN THE DOOR TO ALMOST ANY BUSINESS WHO HAS HAD A DISPUTE WITH TELSTRA OVER THE LAST 10 YEARS AND NOT BEEN SATISFIED WITH THE OUTCOME TO CLAIM THEY SHOULD BE INCLUDED. THERE IS A STRONG r--IETWORK, INCLUDING A SPECIAL WEBSITE, OF PEOPLE WHO CLAIM TO HAVE BEEN HURT BY TELSTRA OVER THE YEARS, SO IT WOULD SOON BECOME PUBLIC KNOWLEDGE IF ANY OF THESE PEOPLE'S CASES WERE INCLUDED IN THE ASSESSMENT. THIS WOULD MEAN ALMOST IRRESISTIBLE PRESSURE TO INCLUDE OTHERS, AS IT WOULD BE DIFFICULT TO JUSTIFY LIMITING THE ASSESSMENT TO PEOPLE WHO HAVE WRITIEN COPIOUSLY TO THE MINISTER . THOSE WHO HAVE PREVIOUSLY GIVEN UP WRITING WOULD COME OUT OF THE CLOSETIWOODWORK). TELSTRA WOULD STRONGLY OPPOSE INCLUSION OF 'WANNABES' .] (3) Contractors currently engaged in disputes with Telstra.

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The Department undertook to ascertain which of the original COT cases, if any, remained outstanding. Agreement was reached that the 'Wannabe COT case' may fall within the scope of 'related disputes' only if they are causally connected to the original problem that gave rise to the Original COT cases . The Department undertook to ascertain which of the 'Wannabe COT cases' could be regarded as 'related disputes' .[AS STATED, I BELIEVE THAT WE SHOULD CONFINE 'RELATED DISPUTES' TO THE 12 REFERRED TO IN THE AUSTEL REPORT. IF THE OFFICE IS NOT COMFORTABLE DOING THIS AND WANTS TO INCLUDE ANY OTHERS, SUCH A S _ , THEN I SUGGEST THAT THIS BE JUSTIFIED BY ARGUING THAT WAS ONE OF THOSE CASES THE SENATE COMMITIEE INCLUDED IN ITS INVESTIGATION OF THE COT RELATED CASES IN 1997. HOWEVER THIS WOULD ALSO MEAN INCLUDING THE OTHER 'WANNABES' INCLUDED IN THE 1997 REPORT. I THINK THERE WERE ABOUT 3 OR 4 WANNABES PICKED UP BY THE SENATE. THE 12 CASES INCLUDED IN THE AUSTEL REPORT HAD VERY SIMILAR ALLEGED FAULTS TO THE ORIGINAL 4 COTS . IN THIS SENSE ALSO THEY ARE 'RELATED DISPUTES'. THE 'WANNABES' PROBLEMS GENERALLY HAD LESS IN COMMON WITH THOSE OF THE ORIGINAL 4. Agreement was reached that the Contractors curreiltly engaged in disputes with Telstra did not fall within the scope of 'outstanding COT cases and related disputes' as they were claimants in independent disputes unrelated to the original COT cases . [I AGREE THAT SUCH CONTRACTORS (WHOEVER THEY ARE) SHOULD BE EXCLUDED, BUT IT WOULD BE DIFFICULT TO JUSTIFY THEIR EXCLUSION IF 'WANNABES' WERE INCLUDED .] 1.3 The commitment to an Independent Assessor (lA) - - - - - - A suggestion that the lA needed to be independent only of Telstra and the claimants was viewed favourably by the MO. Agreement was reached that the role of the lA would not be to arbitrate outcomes but that the lA would be tasked with assessing: (1) The status of all outstanding claims [THIS WOULD BE EASY); and (2) The basis for any sustainable claims that have not been resolved through earlier processes to negotiate a possible settlement with Telstra.[THIS WILL BE DIFFICULT, PARTICULARLY IF THE ASSESSOR WILL BE EXPECTED TO MAKE JUDGMENTS ABOUT WHETHER CLAIMS ARE SUSTAINABLE . I SUGGEST THAT, IN ORDER TO AVOID THE NEED FOR SUCH JUDGMENTS, WE INTERPRET THE WORDS 'ANY SUSTAINABLE CLAIMS' IN THE MINISTER'S STATEMENT AS 'ANY CLAIMS PREVIOUSLY DEEMED SUSTAINABLE', EG BY THE ARBITRATOR OR THE

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COURTS.] 1.3.1 Funding of the lA Mat, ",(ated that the Department would be responsible for funding the lA. [NOT NECESSARILY, EG IF ACMA WAS THE INDEPENDENT ASSESSOR] Andrew indicated that the Department would need to further consider how best to fund the lA but that internal funds and a request for further funds were possible options . Departmental officers discussed the options among themselves and agreed that internal funding of an externally enga ged consultant as an independent assessor may be the preferred way to achieve the Minister's commitment and Departmental resourcing obligations.[WE WOULD NEED TO CHECK WITH LEGAL THAT THE TASK WAS WITHIN ACMA'S STATUTORY FUNCTIONS. IF SO, ACMA COULD BE DIRECTED OR REQUESTED BY THE MINISTER TO UNDERTAKE THE TASK. IF THE TASK WAS APPROPRIATELY CONFINED , ACMA SHOULD BE ABLE TO UNDERTAKE IT WITHIN ITS EXISTING RESOURCES .] 2. Meeting 2 - DCITA. MO and Telstra (Athol Chalmers) Matt provided Telstra with the text of the commitment by the Minister to Senator Joyce. Telstra indicated that a number of processes were currently undarway to address three outstanding COT cases and that Telstra was opposed to anything that would affect these processes.[THE THREE CASES REFERRED TO BY TELSTRA ARE, I THINK, FROM THE 12 CASES INCLUDED IN THE AUSTEL REPORT. WE ARE CURRENTLY CHECKING THIS WITH TELSTRA.] Agreement was reached that Telstra's existing processes addressing these three outstanding COT cases would not be affected by the Minster's commitment to Senator Joyce. [NOT AFFECTING TELSTRA'S EXISTING PROCESSES WOULD MEAN THAT THE INDEPENDENT ASSESSOR 'S ROLE WOULD BE SIMPLY TO DETERMINE THE STATUS OF THESE OUTSTANDING CASES , lE WHAT STAGE HAS BEEN REACHED AND WHAT PROCESSES WERE BEING USED. IF THE INDEPENDENT ASSESSOR 'S ROLE WERE TO EXTEND TO FACILITATING A SETTLEMENT OF THESE CASES, IT IS INEVITABLE THAT TELSTRA'S PROCESSES WOULD BE AFFECTED .] Andrew asked for Telstra's co-operation in providing information regarding its processes addressing these three outstanding COT cases. Telstra indicated it would consider what information it would provide on an ongoing basis.[OID TELSTRA UNDERTAKE TO GET BACK TO US?] Agreement was reached that the Department and the Minister's Office would develop a list of claimants potentially falling within the scope of the commitment. Telstra indicated its willingness to be involved in developing this list.[AS SUGGESTED ABOVE, I SUGGEST RESTRICTING THE LIST TO THE 16 IN THE AUSTEL REPORT. WE COULD RAISE THIS SUGGESTION WITH THE OFFICE, WITH THE ALTERNATIVE OPTION OF ADDING IN ANY 'WANNABES' MENTIONED IN THE 1997 SENATE REPORT.]

Cheers, . Josh Joshua Davies Telecommunications Consumer Policy Section, OCITA Phone: 02 6271 1494 Fax: 02 6271 1850 Email : Joshua.Davies@dcita.ov.au InternaL w w .dcita,gov.au

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