FALCON ACFT IN CRUISE HAD ERRONEOUS ALT READOUT FROM XPONDER MODE C. CTLR HAD FLC VERIFY ALT AND SHORTLY AN ACR ACFT TCASII RESPONDED TO THE ALT READOUT AND COMMANDED EVASIVE ACTION. PROB CORRECTED WHEN CHANGING ALTS.

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ON MAY/XX/97; FALCON; ENRTE TO PALM SPRINGS; CA; WAS ASSIGNED FL310 BY ZAB AND WAS MAINTAINING FL310 AS VERIFIED BY BOTH ACFT ALTIMETERS AND GPS ALT READOUTS. ZAB REQUESTED CONFIRMATION OF OUR ALT AND LAST ASSIGNED ALT. THE ASSIGNED ALT AND ACFT ALT WAS CONFIRMED AT FL310. ZAB THEN INFORMED US IT WAS INDICATING AN ALT OF FL324 AND ADVISED US OF ACR X POS AT 11 O'CLOCK; FL330; AT WHICH TIME ACR X RPTED TFC ON THEIR TCASII AT THAT ALT AND SAID THEY WERE TAKING EVASIVE ACTION. WE THEN SWITCHED TO #2 XPONDER AND ASKED ZAB FOR AN ALT READOUT AT WHICH TIME ZAB RPTED OUR ALT TO BE FL310. MOMENTS LATER; WE REQUESTED ACR X POS FROM ZAB AND ZAB RPTED ACR X TO BE AT 9 O'CLOCK POS; 4 MI; BUT NOT IN SIGHT BY US OR THEM. NOW SOMEONE ON ACR X FLT STATED THIS WAS UNACCEPTABLE AND WANTED THE ACFT'S CALL SIGN TO FILE SOME PAPERWORK ON THIS SIT. LATER; AFTER WE WERE ASSIGNED FL350; BOTH XPONDERS READ THE SAME AND CORRECT ALTS. IN ALL OTHER ATC SECTORS ALL THE WAY TO DEST; INCLUDING APCH CTL AT DEST. I BELIEVE THIS SIT WAS CAUSED BY SOME TYPE ELECTRONIC INTERFERENCE IN THAT SECTOR. HOW TO PREVENT RECURRENCE IS UNKNOWN.