News Corp is fighting to disprove fresh charges that a video software and content security provider it has controlled, NDS, illegally helped to undermine Rupert Murdoch’s business rivals. News Corp COO Chase Carey said tonight that a BBC1 show that revived the allegations in a report on Monday “presented manipulated and mischaracterized emails to produce unfair and baseless accusations.” NDS chief Abe Peled demanded a retraction saying that the investigation that ran on the program Panorama showed “flagrant disregard to the BBC’s broadcasting code, misleading viewers and inciting widespread misreporting.” The allegations come at a sensitive time: They feed into the investigations into phone hacking and bribery at News Corp’s UK tabloids. Also, this month Cisco agreed to pay $4B for NDS. News Corp currently owns 49% of the firm.
The BBC show centered on ITV, the UK rival of News Corp’s Sky. Security codes for ITV’s ONdigital TV smart cards were hacked as far back as 1998 and vital data to unlock the service appeared on a website, The House Of Ill Compute, whose founder, Lee Gibling, claims he was paid by NDS as a consultant. Once the codes were out, it was relatively easy for consumers to steal ONdigital’s service. That was “the real killer” for the business, which folded in 2002, ONdigital’s former Chief Technical Officer Simon Dore said. But Peled noted that some emails the program presented to substantiate its charges actually demonstrate that NDS conducted a “long-standing fight against piracy.”
Although Peled says that the emails may have come from a third party, “this does not excuse your ethical and journalistic obligation to present us with your intended allegations prior to broadcast. Nor does it excuse you from telling your audience the truth.” He says that, prior to the broadcast, the BBC turned down NDS’ requests for “the factual allegations you intended to make and the information on which you expected to rely.” Had reporters complied, then “we would have shown you that this cache of stolen emails had been obtained and manipulated as part of an ongoing plan by third parties to damage the reputation of NDS, our sister companies, and News Corporation.”
In addition to the BBC charges, the Australian Financial Review on Wednesday published a sample of over 14,000 emails from the hard drive of a former UK police commander, Ray Adams, who was once head of operational security for NDS in Europe. The newspaper says the emails show that a secret NDS unit damaged News Corp rivals Austar, Optus and Foxtel by encouraging pirating of the companies. “NDS sabotaged business rivals, fabricated legal actions and obtained telephone records illegally,” the AFR said. News Corp’s Australian arm News Limited said that “the story is full of factual inaccuracies, flawed references, fanciful conclusions and baseless accusations which have been disproved in overseas courts.”