BBC1 promised that an investigative report tonight in its program Panorama would reveal “fresh hacking allegations striking at the heart of News Corporation’s pay-TV empire.” It was originally tipped to harken back to 2002: Canal Plus filed a lawsuit claiming that NDS — the video software and content security firm in which Rupert Murdoch’s News Corp currently holds a 49% stake — “spent large amounts of money and resources” to intercept security codes used on TV smart cards by Canal’s former Italian subsidiary Telepiu. But the bulk of the 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, the BBC show reported. Vital data to unlock the service’s encryption process then appeared on a website, The House Of Ill Compute, whose founder, Lee Gibling, claims he was paid by NDS as a consultant. The codes, according to the show, were then easily accessible to various and sundry, thus undercutting ITV’s business. The former chief technical officer of ONdigital, Simon Dore, told Panorama “The business had its issues aside from the piracy … but those issues I believe would have been solvable by careful and good management. The real killer, the hole beneath the water line, was the piracy. We couldn’t recover from that.” ITV Digital went under in 2002.
NDS has faced similar accusations before. Along with the Telepiu incident, EchoStar in 2003 charged that the firm hacked and leaked its security codes. NDS was cleared and awarded damages. Cisco recently announced it plans to buy the company for $4 billion.
Ahead of the Panorama broadcast, News Corp lawyers sent a letter to media organizations warning them to beware of the show’s journalism: “The allegation which the BBC appears to be broadcasting on Monday is that News Corporation has been involved in illegal activities designed to cause the collapse of a business rival. We write to put you on notice that this allegation is serious, defamatory, false and highly damaging; we urge your paper not to republish it, especially in circumstances where our client has not been given the opportunity to respond.”
A News Corp spokesperson also provided Deadline with the following statement:
“News Corporation is proud to have worked with NDS whose industry-leading technology has transformed TV viewing for millions of people across the world and to have supported them in their aggressive fight against piracy and copyright infringement. NDS has consistently denied any wrongdoing to Panorama and we fully accept their assurances. Indeed the United States Court has considered these issues and completely vindicated NDS of all piracy charges, leaving its accuser with a $19m legal bill.
The BBC has not even bothered to pose questions to News Corporation ahead of broadcast and seem unwilling to engage in any fair or balanced debate on this issue. In light of the behaviour by the BBC, News Corporation felt it has little alternative but to engage lawyers, although there has been no attempt to stop the programme, merely to try to get Panorama to allow us to be involved in the debate. At a time when all of the UK media is under intense scrutiny, we find the actions of the BBC’s so called premier investigative programme very disappointing.”
NDS added in its statement:
“NDS is a global leader in the fight against pay-TV piracy, having repeatedly and successfully assisted law enforcement in that important effort.
Like most companies in the conditional access industry – and many law enforcement agencies – NDS uses industry contacts to track and catch both hackers and pirates. This is neither illegal nor unethical. And, to ensure that all activity remains completely within legal bounds, NDS staff and their contacts operate under a clear code of conduct for operating undercover.
These allegations were the subject of a long-running court case in the United States. This concluded with NDS being totally vindicated of all piracy charges and its accuser having to pay almost $19m in costs.”