Mar-28-2012

Australia says News Corp piracy claims are serious

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The allegations aired on BBC Panorama current affairs programme on Monday, called "Murdoch's TV pirates," claim hackers hired by News Corp allegedly broke computer codes of ONDigital's smart cards - a Pay TV rival owned by ITV, reports The Guardian. ONDigital was said to have gone bust following the hacks which destroyed its system and forced it out of the lucrative Pay TV market in the UK. It has since been renamed ITV Digital. The hackers then sent the cracked codes to another pirate website - The House of Ill Compute - who published them online, allowing viewers to use the ONDigital services illegally and without having to cough up for subscriptions - bleeding its revenue stream dry. Lee Gibling, founder of The House of Ill Compute also known as Thoic, alleges he was paid by former police officer and NDS head of security to publish the stolen details on its site. "We wanted people to be able to update these cards themselves, we didn't want them buying a single card and then finding they couldn't get channels. We wanted them to stay and keep with On Digital, flogging it until it broke," Gibling told Panorama. NDS denies the allegations saying they are "simply not true. [1] Reported last night on the BBC program "Panorama," the News Corp-owned software security company NDS allegedly cracked and then spread the smart card security codes of a satellite TV company called ONdigital which was a rival to the News Corp-co-owned BSkyB (short for British Sky Broadcasting.) Sources of their information are the German hacker Oliver Koermmerling, who says he cracked the code for NDS, and Lee Gibling, operator of the pirate website The House of Ill Compute (THOIC), who says an NDS operative paid him to distribute the security codes on line so other hackers could make and sell counterfeit smartcards to pirate ONdigital's signal. ONdigital, owned by the ITV broadcasting companies Granada and Carlton, eventually went under from this duress in 2002, leaving the lucrative pay TV business to BSkyB to rule alone. According to the British paper The Guardian (which also broke the News Corp's phone hacking scandal last summer), News Corp attorneys attempted to derail the BBC report this past weekend by sending 'round denials and legal threats to other media companies. Then in a post-revelation response, NDS admitted that Gibling was on its payroll and that it had the ONdigital security codes. NDS now claims their intent was for THOIC to "trap and catch hackers and pirates." [2]

Rupert Murdoch's News Corp. empire may have been hacking more than just phones. Lee Gibling, former owner of hacking site The House of Ill Compute or THOIC, told BBC Panorama that he was paid by News Corp. company NDS to distribute pirated codes in order to bankrupt a rival to Sky TV. In the late 1990s, pay TV service ITV Digital -- initially "On Digital" -- was launched as a competitor to Murdoch's Sky TV service. [3]

The television regulator said yesterday that it would consider "all relevant evidence" after a senior Labour MP called for it to look into allegations by the BBC's Panorama that NDS, a London-based News Corp company specialising in satellite television technology, leaked codes that could have been used to create counterfeit smart cards for the now defunct ITV Digital. It emerged earlier this month that Ofcom has already stepped up Project Apple, its investigation into whether Mr Murdoch's son, James, is a "fit and proper" person to sit on the board of BSkyB and whether News Corp should be allowed a controlling stake in the satellite broadcaster. Any evidence that the toxic swirl of allegations of wrongdoing and criminality engulfing Rupert Murdoch's British newspaper business is beginning to taint News Corp's pay-TV operations, including BSkyB, will be particularly unwelcome in a company which has made satellite broadcasting the cornerstone of its global success. NDS, which is being sold to computing giant Cisco for $5bn, has flatly denied the Panorama claims, describing them as "simply not true". It said: "It is wrong to claim NDS has ever been in possession of any codes for the purpose of promoting hacking or piracy." [4] BSkyB, Britain's dominant pay-TV broadcaster, is 39 percent owned by News Corp. It is wrong to claim that NDS has ever been in the possession of any codes for the purpose of promoting hacking or piracy." News Corp said: "NDS has consistently denied any wrongdoing to (BBC program) Panorama and we fully accept their assurances." Regulator Ofcom is already investigating both Murdoch and News Corp in the light of new evidence emerging from probes into phone and computer hacking and bribery at the News of the World tabloid, which News Corp shut down last July. "These allegations, if true, are the most serious yet and I am referring the matter to Ofcom, who have a duty to investigate as part of their fit and proper test," member of parliament Tom Watson said of the claims made in the BBC's Panorama program. "If what Panorama says is true it suggests a global conspiracy to undermine a great British company, ITV Digital," he told Reuters on Tuesday. An Ofcom spokesman declined to comment on the specific allegations but said the regulator would consider "all relevant evidence" as part of its ongoing duty to be satisfied that the owner of the license was fit and proper. Watson is known for his dogged questioning of James Murdoch and his father Rupert, for their role in the phone-hacking affair, notoriously comparing James to a Mafia boss when he appeared before a parliamentary committee investigating the hacking. The committee has been due since early this year to present a report based on its investigations, which is expected to be critical of James Murdoch and may determine whether he has a future in Britain. [5]

Emails between Adams and News executives raised "questions about whether News was involved in an abuse of process of the U.S. court system", it added. The BBC's Panorama interviewed Lee Gibling, owner of a satellite hacking website, who said NDS funded the expansion of his site and had him distribute ITV Digital's codes. NDS said it had never used or intended to use the site for any illegal purpose, and said it had paid Gibling for his expertise so that information from the site could be used to track and catch hackers and pirates. "It's possible they cracked them themselves in order to test the security of the algorithms," he told Reuters. "To compare yours against others, you have to test them and there's a chance you'll succeed." ITV Digital was beset by issues from the start, including internal competition between its shareholders, a lack of premium content, and a price war with BSkyB, which had been shut out of the venture by the regulator. "It's a complex picture, but to say that ITV Digital failed because of piracy, I think, is not correct," said Hewlett, who was working for an ITV company at the time. An industry source in Australia said hacking was a common problem in the 1990s but the industry had changed over the past decade as engineers had worked out how to address these issues. [6] "There's no suggestion anywhere that Sky or News Corp knew what NDS was doing," broadcaster and media consultant Steve Hewlett told Reuters. "But if it all turns out to be true, then you have a News Corp company once again behaving in ways that are less than proper," he said. The Panorama documentary featured an interview with Lee Gibling, the owner of a satellite hacking website, who said NDS funded the expansion of his site and had him distribute ITV Digital's codes. NDS said it never used or intended to use the site for any illegal purpose, and said it had paid Gibling for his expertise so that information from the site could be used to track and catch hackers and pirates. "It's possible they cracked them themselves in order to test the security of the algorithms," he told Reuters. "To compare yours against others you have to test them and there's a chance you'll succeed." ITV Digital was beset by issues from the start, including internal competition between its shareholders, a lack of premium content, and a price war with BSkyB, which had been shut out of the venture by the regulator. "It was a question of who's got the deepest pockets and the biggest appetite for risk, and it wasn't ITV," said Hewlett, who was working for an ITV company at the time. "It's a complex picture, but to say that ITV Digital failed because of piracy, I think, is not correct." NDS, whose technology is used by BSkyB and News Corp pay-TV operators including Sky Italia and Sky Deutschland, was sold by News Corp and private equity firm Permira to Cisco this month. [7]

Previous allegations of a hacking scandal involving content security firm NDS have been revived just as the company is being acquired by Cisco Systems ( Nasdaq: CSCO ), as the leader of a hacker site alleged that NDS was the brains behind piracy activity that helped bring down a rival of its satellite TV player Sky, NDS's sister company under corporate parent News Corp. ( Nasdaq: NWSA ). At the time, NDS said its links to the site were intended only for information-gathering on how hackers operate. ThoIC founder Lee Gibling told the BBC this week that NDS had much more active and intentional involvement in the distribution of the ITV pirate codes to the hacker community. [8] Panorama's clams are based on the evidence of Lee Gibling, who set up a website in the late 1990s referred to as 'The House of Ill-Compute', or Thoic. After information on the ITV Digital cards - made by Canal+ - was stolen by a hacker, Gibling told the BBC that he was paid to make the data widely available. He claimed that his contact was Ray Adams, who at the time was head of UK security for NDS, a key rival of Canal+ in producing smartcards for pay-TV firms, such as Sky. Adams denied any knowledge of the ITV Digital code, but internal NDS documents show that the hacked code was passed to him by a technology expert at the firm. [9] When ITV Digital shut down in 2002, some speculated that it had been deliberately targeted for piracy, a suspicion that was bolstered when The Guardian found emails that suggested NDS had paid for much of THOIC's upkeep. At the time, NDS admitted that it had helped fund THOIC, but said its involvement had been limited to buying information about potential security threats; head of security Ray Adams denied having any of the hacked codes. Now, Panorama says it has found emails in which "a hacked code was passed to Len Withall and Ray Adams from a technology expert inside the company," making this story less likely. It's possible, of course, that Gibling's story or the emails the BBC has received are not accurate, but NDS has settled several past complaints about shady business practices, including one by Canal+, which manufactured ITV's smart cards. Canal+ alleged that NDS had counterfeited its smart cards in order to encourage piracy of its pay TV services. [3] Internal NDS documents, obtained by Panorama, show a hacked code was passed to Mr Withall and Mr Adams from a technology expert inside the company. Mr Gibling said NDS paid for Thoics servers and was across all of its hacking and TV piracy. "Everything that was in the closed area of Thoic was totally accessed by any of the NDS representatives," he said. He added that although Thoic was in his name, in reality the website belonged to NDS. "It was NDS. It was their baby and it started to become more their baby as they fashioned it to their own design." Once ITV Digitals codes were published on Thoic, Mr Gibling said his site was then used to defeat the electronic countermeasures that the company used to try to stop the piracy. He added that new codes, created by ITV Digital, were sent out to other piracy websites. "We wanted people to be able to update these cards themselves, we didnt want them buying a single card and then finding they couldnt get channels. We wanted them to stay and keep with On Digital, flogging it until it broke." [10]

"NDS never used or sought to use the "Thoic" website for any illegal purpose. NDS paid Lee Gibling for his expertise so information from "Thoic" could be used to track and catch hackers and pirates. "It is simply not true that NDS used the Thoic website to sabotage the commercial interests of ONdigital / ITV Digital or indeed any rival. "It is wrong to claim that NDS has ever been in the possession of any codes for the purpose of promoting hacking or piracy." [11] A News Corp-backed pay-TV encryption company has denied a BBC claim that it used a computer hacker to undermine competition from the UK's ITV Digital more than 10 years ago. The BBC investigation alleged that NDS paid a hacker called Lee Gibling who published the information through his website, The House of Ill-Compute (Thoic), which he set up in the late 1990s. NDS paid Lee Gibling for his expertise so information from Thoic could be used to track and catch hackers and pirates. "It is simply not true that NDS used the Thoic website to sabotage the commercial interests of ONdigital/ITV Digital, or indeed any rival." NDS, which is part-owned by News Corp, said that it had "repeatedly and successfully" assisted law enforcement against pay-TV piracy and that it uses industry contacts to track and catch both hackers and pirates. [12]

The report entitled, "Murdoch's TV Pirates", claims that Lee Gibling set up a website in the late 1990s known as The House of Ill-Compute or Thoic. He said NDS, a pay-TV smartcard maker, then funded expansion of the Thoic site and later had him distribute the set-top pay-TV codes of ITV Digital, a rival of Murdoch's Sky TV. [13] LONDON - A lawmaker is to demand that the UK television watchdog probe new hacking claims against News Corp, piling more pressure on BSkyB Chairman James Murdoch, whose fitness to own a broadcast licence is already under scrutiny. A BBC Panorama documentary broadcast on Monday alleged NDS, a pay-TV smartcard maker recently sold by News Corp for $5 billion (3 billion pounds), hired a consultant to post the encryption codes of ITV Digital, a key rival of the then Sky TV, on his website. [7] The Operational Security unit had originally been set up to hunt pirates targeting Murdoch's own operations but later turned into a dirty-tricks campaign to undermine competitors, it added. The BBC Panorama documentary broadcast on Monday alleged that NDS hired a consultant to post the encryption codes of ITV Digital, a key rival of Murdoch's then Sky TV, on his website. [6] News Corp owns 25 percent of Australia's top pay-TV firm, Foxtel, which is looking to take over rival Austar. The report follows a BBC Panorama documentary broadcast on Monday that alleged NDS had hired a consultant to post the encryption codes of ITV Digital, a key rival of Murdoch's then Sky TV, on his website. [14]

NDS denies a BBC report that it published the codes of ITV Digital, pushing Rupert Murdoch's Sky TV rival out of business. [13]

The hacker, Lee Gibling, told the programme that NDS helped expand the website. It was claimed that the work to break into the ITV Digital cards, set up in 1998 as ON Digital as a rival to Mr Murdoch's Sky TV, was carried out by NDS at a computer laboratory in Israel. ITV Digital collapsed in 2002, leaving its shareholders with losses of £1bn. [15] The AFR attributes at least some of the blame for ITV Digital's collapse in the UK at the feet of piracy. Another part of the story is that NDS, a News Corp subsidiary that Cisco intends to acquire for US$5 billion, is one of four major makers of smart cards used in pay TV boxes. It was within NDS that an operational unit was initially set-up to combat piracy of the cards it produced. In time, the report states, its role broadened to include helping hackers compromise the security of its smart card rivals. In addition to the bigger corporate goals listed above, this activity allowed NDS to displace its rivals as the smart card vendor of choice both within the News Corp pay TV empire and without. You can read a blow-by-blow account, including emails, of how News Corp and NDS allegedly facilitated pay TV smart-card hacking via websites and forums that it funded, dealt with its rivals in both the pay TV and smart-card sectors, and turned in various hackers at opportune moments. [16] The program said that pay TV software and security firm NDS, in which News Corp. has held a stake that it recently agreed to sell, hacked smart cards used by U.K. broadcaster ITV's ONdigital, speeding up the end of ITV Digital, which shuttered in 2002. "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," News Corp. said in a statement. "Whilst it was not reported fully in the programme, NDS has consistently denied any wrongdoing to Panorama, and we fully accept their assurances. [17]

The BBC's Panorama program says News Corp's security arm NDS recruited a hacker to acquire the smart card codes of ITV's ONdigital, the biggest UK pay TV rival to News Corp's Sky TV. [18] Last night, further claims were published by an Australian newspaper alleging that NDS was also facing questions about tactics deployed against News Corp's pay-TV rivals in the country. At the heart of the latest claims, which focus on the strenuous and expensive efforts of pay-TV companies to maintain the integrity of their encryption systems in a ruthless world of pirates, lies an elite strata of "super-hackers" whose genius was to be able to penetrate security codes which their manufacturers claim to be unbreakable. The rapid expansion of satellite television in the late 1990s and early 2000s brought with it a shady sub-culture of middlemen and computer whizz- kids, many of them fitting the stereotype of lank-haired teenagers bent over keyboards in their garages, who enjoyed the sport of cracking the codes in the smart cards that customers into their set-top boxes to watch programmes. Their work enabled a lucrative trade to spring up in illegal, pirated satellite smart cards from Asia to Europe and Australia to America. One such maverick was Oliver Kommerling, a German hacker adept at unlocking encryption cards, including that of Mr Murdoch's Sky TV in 1996. Mr Kommerling told Panorama that after he targeted Sky TV, he was approached by Ray Adams, the former head of criminal intelligence at Scotland Yard who was the NDS head of security. After a long career in the Met Police, Mr Adams and a number of other former British police officers, including his eventual deputy, Len Withall, a senior detective in the Surrey force, could offer NDS a valuable asset - their specialist knowledge of penetrating criminal networks and recruiting informants. [4]

Mr Kommerling, recruited by Mr Adams to work in NDS's dedicated security laboratory in the Israeli port of Haifa, was initially paid to work on improving the company's own products. He claimed to the BBC he was then switched to cracking the codes of its rivals, including Canal Plus, a French smart card company whose customers included ITV Digital. It is not illegal to break the encryption of a TV smart card. Soon claims began to surface that NDS and its security unit were going beyond looking after the company's own products and harnessing the work of their code-cracking experts to undermine the efforts of rivals to gain market share. [4] Adams, NDS' head of security, was supplying the codes so that pirates could make counterfeit ONdigital smartcards, Gibling claimed. Gibling said he later destroyed with a sledgehammer the computer equipment used, and later accepted a severance payment with a confidentiality clause. THOIC was quickly closed when pirates discovered he was taking payments from NDS, and Adams demanded he go into hiding, he said. NDS has admitted it was paying Gibling, but only to catch "hackers and pirates" accessing its codes. "It is simply not true that NDS used the THOIC website to sabotage the commercial interests of ONdigital/ITV digital, or indeed any rival," the company said. Adams has denied he had the codes. In 2002 the company that supplied the ONdigital smart cards, Canal Plus, took NDS to court over alleged hacking of its codes. [19] The company has denied Mr Giblings claims and said Thoic was only used to gather intelligence on hackers. "It is simply not true that NDS used the Thoic website to sabotage the commercial interests of ONDigital/ITV digital or indeed any rival," the NDS statement said. "It is wrong to claim NDS has ever been in possession of any codes for the purpose of promoting hacking or piracy." [10] NDS denied Gibling's claims and said that Thoic was only ever used to gather intelligence on hackers. "It is simply not true that NDS used the Thoic website to sabotage the commercial interests of ONDigital/ITV digital or indeed any rival," the firm's statement said. "It is wrong to claim NDS has ever been in possession of any codes for the purpose of promoting hacking or piracy." This was not the first such case of alleged wrongdoing involving NDS, as pay-TV firm Canal+ filed a lawsuit in California in 2002 alleging that NDS "spent large amounts of money and resources" to hack smartcards used by its subsidiary in Italy. [9] "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 and its accuser having to pay almost $19m in costs." It is simply not true that NDS used the Thoic website to sabotage the commercial interests of ONDigital/ITV digital or indeed any rival. It is wrong to claim NDS has ever been in possession of any codes for the purpose of promoting hacking or piracy." [20] In a detailed statement after the Panorama programme, NDS denied ever using hackers against other companies. "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 and its accuser having to pay almost $19m in costs -- a point that the BBC neglected to include." Some of the emails released on Tuesday played a part in that case, where the U.S. pay-TV platform Echostar won part of its claim, but was awarded trivial damages and was ordered to pay NDS's costs. Tom Watson, the opposition Labour MP who has led British parliamentary investigations into Mr Murdoch's group and the UK phone hacking scandal, said he had written to the broadcasting regulator Ofcom, asking it to include the Panorama allegations in its inquiry into whether News Corp and its executives were "fit and proper" to own a broadcasting licence. [21]

BSkyB, now Britain's dominant pay-TV broadcaster, is 39% owned by News Corp. Murdoch sits on NDS's board. NDS said in a statement: "It is wrong to claim that NDS has ever been in the possession of any codes for the purpose of promoting hacking or piracy." News Corp said: "NDS has consistently denied any wrongdoing to Panorama and we fully accept their assurances." Regulator Ofcom is already investigating both Murdoch and News Corp in the light of new evidence emerging from probes into phone and computer hacking and bribery at the News of the World tabloid, which News Corp shut down last July. "These allegations, if true, are the most serious yet and I am referring the matter to Ofcom, who have a duty to investigate as part of their fit and proper test," member of parliament Tom Watson said of the claims made in the BBC's Panorama programme. [22] UK regulator Ofcom is already investigating News Corp and a senior executive, James Murdoch, youngest son of Rupert, in the light of new evidence emerging from probes into phone and computer hacking and bribery at the News of the World tabloid, which News Corp shut down last July. "These allegations, if true, are the most serious yet and I am referring the matter to Ofcom, who have a duty to investigate as part of their fit and proper test," member of parliament Tom Watson said of the claims made in the BBC's Panorama programme. "If what Panorama says is true, it suggests a global conspiracy to undermine a great British company, ITV Digital," he told Reuters on Tuesday. An Ofcom spokesman declined to comment on the specific allegations but said the regulator would consider "all relevant evidence" as part of its ongoing duty to be satisfied that the owner of the licence was fit and proper. [6] "If what Panorama says is true, it suggests a global conspiracy to undermine a great British company, ITV Digital," he told Reuters on Tuesday. An Ofcom spokesman declined to comment on the specific allegations but said the regulator would consider "all relevant evidence" as part of its ongoing duty to be satisfied that the owner of the licence was fit and proper. Watson is known for his dogged questioning of James Murdoch and his father Rupert for their role in the phone-hacking affair, notoriously comparing James to a Mafia boss when he appeared at a parliamentary hearing investigating the hacking. The committee has been due since early this year to present a report based on its investigations, which is expected to be critical of James Murdoch and may determine whether he has a future in Britain. [22]

There is no evidence that James Murdoch knew about the events reported by Panorama. Once ITV Digital's codes were published on Thoic, Gibling said his site was then used to defeat the electronic countermeasures that the company used to try to stop the piracy. He added that new codes created by ITV Digital were sent out to other piracy websites. [20] ITV Digital CTO Simon Dore told Panorama that piracy was "the killer blow for the business, there is no question." Once ITV Digital's codes were published on Thoic, Mr Gibling said his site was then used to defeat the electronic countermeasures that the company used to try to stop the piracy. [13]

The money was used to crack ITV Digital's viewing card security, said hacker Lee Gibling, who added that the hackers then released the codes through a web site called The House of Ill-Compute, or Thoic. Again, he said, this was funded by NDS. [23] The pay-TV software maker co-owned by News Corp. (NWSA) helped bring down U.K. competitor ITV Digital in 2002 by paying hackers to deconstruct its set-top cards and put the codes online, BBC Panorama reported. NDS Group Ltd. (NNDS), owned by New York-based News Corp. and London hedge fund Permira Advisers LLP, hired hacker Lee Gibling after he successfully targeted NDS's cards, and paid him to hack ITV's technology, BBC Panorama reported yesterday, citing former hackers. [24]

A unit of Rupert Murdoch's News Corporation allegedly cracked the smartcard codes of ONdigital in a bid to undermine the company's success, according to claims aired on BBC's Panorama programme. On BBC Panorama last night, THOIC operator Lee Gibling said he had received over APS60,000 a year from Ray Adams, NDS' head of security, for the work. [19] Broadcasting watchdog Ofcom is also investigating whether News Corp is 'fit and proper' to take full control of Sky parent firm BSkyB, of which it already owns 39 per cent. NDS, which is part-owned by News Corp a deal to sell it to Cisco Systems was announced earlier this month said the claims of sabotage were'simply not true'. Panorama claimed that NDS obtained secret codes from ONdigital before passing them to a pirate website called The House Of Ill Compute (Thoic). At the time James Murdoch was a non-executive director at NDS. But there is no suggestion he knew about the alleged hacking. Lee Gibling, who set up Thoic, claimed he was given the information by Ray Adams, who was then NDS's head of UK security. [25]

Sky told Panorama that it had no involvement in how the unit was run and was not aware of Thoic. Both men were secretly filmed by Panorama. Gibling said NDS paid for Thoic's servers and was across all of its hacking and TV piracy. "Everything that was in the closed area of Thoic was totally accessed by any of the NDS representatives," he said, adding that although Thoic was in his name, in reality the website belonged to NDS. There is no evidence that James Murdoch knew about the events reported by Panorama, which says, "It was NDS. It was their baby and it started to become more their baby as they fashioned it to their own design." [13] Internal NDS documents, obtained by Panorama, show a hacked code was passed to Withall and Adams from a tech expert inside the company. Gibling said NDS paid for Thoic's servers and was across all of its hacking and TV piracy. "Everything that was in the closed area of Thoic was totally accessed by any of the NDS representatives," he said. He added that although Thoic was in his name, in reality the website belonged to NDS. [20]

The company told the BBC that THOIC was only used to gather intelligence on hackers. It said Lee Gibling worked as a consultant who was used legitimately to inform on hackers. Mr Adams denied the allegations when secretly filmed by the BBC saying he "would have arrested" Mr Gibling if he knew he was involved in piracy. Prior to the show's broadcast a News Corporation spokesman said: "NDS has consistently denied any wrongdoing to Panorama and we fully accept their assurances." [11] News Corp's lawyers, Allen & Overy, denied the claims even before the program was aired. They told media organisations that the claims NDS ''has been involved in illegal activities designed to cause the collapse of a business rival'' would be false and libellous and demanded they not be repeated. NDS also issued emphatic denials: ''It is simply not true that NDS used the THOIC website to sabotage the commercial interests of ONdigital/ITV digital or, indeed, any rival.'' The company admitted Mr Gibling was in its pay but says it was using THOIC as a legitimate undercover device: ''NDS paid Lee Gibling for his expertise so information from THOIC could be used to trap and catch hackers and pirates.'' [26] NDS never used or sought to use the "Thoic" website for any illegal purpose. NDS paid Lee Gibling for his expertise so information from "Thoic" could be used to track and catch hackers and pirates. Canal Plus is and has been a customer of NDS for many years, and we maintain a good relationship with them. It is wrong to suggest that any NDS employee acted in any improper way. It is simply not true that NDS used the Thoic website to sabotage the commercial interests of ONdigital / ITV Digital or indeed any rival. [27] An NDS spokesman said: 'NDS never used or sought to use the Thoic website for any illegal purpose. NDS paid Lee Gibling for his expertise so information from Thoic could be used to track and catch hackers and pirates. Off air: The collapse of ITV Digital led to 1,500 workers losing their jobs and threatened the financial future of a large number of lower-league football teams. [25]

News Corporation recently agreed to sell the company and the deal is in the process of completion. They allege that NDS hired a man named Lee Gibling who ran a website called the House of Ill Compute (THOIC). NDS is said to have sourced the set-top box codes for ITV Digital given them to Mr Gibling and had him distribute them on his website. [11] Codes were then allegedly published on THOIC's website which would unlock programming for News Corporation's biggest British pay TV rival ITV Digital. LEE GIBLING: We sent them out update codes. We wanted people to be able to update these cards themselves. We didn't want them buying a single card and then finding they couldn't get the channels. We wanted them to stay and keep with On Digital, flogging it until it broke. [28]

BBC's Panorama investigative TV program reports that NDS Ltd., a subsidiary of Rupert Murdoch-controlled News Corporation (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV), recruited a pay-TV "pirate" to post hacked details of rival ITV Digital's secret codes online. [13] Two former senior British policemen, a Metropolitan Police commander Ray Adams and a chief inspector with the Surrey police, Len Withall, are reported by the BBC's Panorama investigative program to have operated a piracy website that released codes to unlock programming for faltering pay TV company ITV Digital. [29] ITV Digital collapsed in March 2002 with losses of more than £1 billion, overwhelmed by mass piracy, as well as technical restrictions and expensive sports contracts. Its collapse left Murdoch-controlled BSkyB the dominant pay TV provider in the UK. Adams and Withall, who were secretly filmed by Panorama discussing their role operating a website called The House of Ill Compute (thoic.com), strenuously deny that they provided operating codes for ITV Digital, or that any codes for ITV Digital appeared on the Thoic site. [29]

The allegations are not new, but Panorama had tracked down Lee Gidding, the man behind The House of Ill Compute (or THOIC), which NDS admit was taken over after its own security unit in Israel had found Gidding trying to hack Sky cards. NDS says THOIC was used as a tool to track and catch more hackers, Gidding alleges it was fed On Digital codes and encouraged to leak them as far and wide as possible. [27] Panorama said NDS had also employed another hacker, called Lee Gibling, who had set up a website in the late 90s, which was known as The House of Ill-Compute, or Thoic. Mr Gibling has claimed that he was to paid publish stolen codes online, allowing pirates to produce counterfeit smart cards. [30] Panorama alleges two former senior Scotland Yard officers Ray Adams and Len Withall who worked for News Corporation's security arm NDS recruited a hacker. This hacker Lee Gibling says he was encouraged to expand his piracy website, The House of Ill Compute - or THOIC. LEE GIBLING: It was NDS, it was their baby. It started to become more their baby as they fashioned it to their own design. [28]

RUPERT MURDOCH'S TV media empire is being accused of corporate espionage, computer hacking and piracy in a campaign that allegedly destroyed a rival to the lucrative British satellite broadcaster BSkyB. News Corporation's then-software security arm, NDS, recruited a hacker to unlock its competitors' smartcards in 1996, the BBC's investigative program Panorama has claimed. [26] The issue is particularly sensitive because Operational Security, which is headed by Reuven Hasak, a former deputy director of the Israeli domestic secret service, Shin Bet, operates in an area which historically has had close supervision by the Office of the Chairman, Rupert Murdoch. The security group was initially set up in a News Corp subsidiary, News Datacom Systems (later known as NDS), to battle internal fraud and to target piracy against its own pay TV companies. Documents uncovered by the AFR reveal that NDS encouraged and facilitated piracy by hackers not only of its competitors but also of companies, such as Foxtel, for whom NDS provided pay TV smart cards. [31]

A firm owned by Rupert Murdoch's News Corp used computer-hacking to ensure the downfall of the biggest rival to his TV company Sky, a documentary has claimed. The programme claimed that the hacking and leak were carried out by NDS a software company that manufactured the smart cards for both Sky and ONdigital. [25] They're at it again. Rupert Murdoch's already disgraced media giant is plunged into a fresh hacking scandal, accused of killing rival TV Co. This time News Corp. stands accused of destroying a rival to its Sky TV empire in the UK by hacking into its computer systems - with the help of a German hacker and pirate website NDS, a secretly News co-owned company. [1]

Witnesses on Panorama alleged that NDS hired a top computer hacker to crack the codes of a rival company, ONdigital, which eventually collapsed amid a bonanza of counterfeiting. This left the pay-TV field in Britain clear for Sky, which is 39.1 per cent owned by News Corp. News Corp almost wholly owned NDS at the time and Murdoch heir-apparent James sat on its board. While there has been no claim that he knew anything about the alleged espionage, the accusations are likely to be considered by the British broadcasting regulator Ofcom as part of its present inquiry into whether News Corp and James Murdoch pass the ''fit and proper'' test of suitability to run a broadcaster. [26] James Murdoch has also served as an NDS director. NDS said in a statement: "It is wrong to claim that NDS has ever been in the possession of any codes for the purpose of promoting hacking or piracy." News Corp said: "NDS has consistently denied any wrongdoing to Panorama and we fully accept their assurances." The Australian Financial Review, citing a four-year investigation and a trove of internal NDS emails, said the piracy undermined the value of competitors like DirecTV ( DTV.O ) in the United States and Telepiu in Italy, and helped News Corp to take them over cheaply. [6]

At the time of the alleged ITV Digital hacking, NDS security unit in the UK was 50% funded by Sky, but the satellite TV giant denied that it had any involvement in how the unit was operated. The case has raised more question marks over the corporate practice of News Corp and James Murdoch, the current chairman of Sky, who has faced criticism over his handling of the phone hacking crisis at newspaper publisher, News International. Murdoch was a non-executive director of NDS at the time of the alleged wrongdoing, but there is no evidence to suggest he was aware of the malpractice. [9] Broadly, the story is an old one and is unlikely to stop the compelling deal. It does make it more likely NDS will be consolidated in double quick time and will lose its corporate identity as Cisco tries to divorce it from its past. More widely, this hacking of a different kind is going to heap more manure on the already tainted reputation of News Corp. Ironically, I think it is the very strength of the company that is proving its undoing. Among the allegations in the BBC programme was the bold statement that the hacking of the On Digital/ITV Digital smart card (whoever was responsible) was the main reason for its demise. This isn't true. It shut because it was a bad idea executed appallingly. ITV's rats-in-a-sack decision making process, the appointment of wholly unqualified management, poor programming, poorer marketing, dodgy technology, and the laughable panicked purchase of second tier football rights for a vast fortune thinking they were some kind of alternative to the Premier League; these things undermined ITV Digital. [32] Simon Dore, ITV Digital's former chief technical officer, said the piracy, which saw counterfeit copies on the broadcaster's smart cards available on street markets around the country, was "the killer blow for the business". The BBC reported that the NDS security unit in Britain was half funded by BSkyB but the broadcaster said it had no day-to-day involvement in its running and was not aware of THOIC. [15]

The charges were made in a BBC Panorama news investigation show and said that a Murdoch business funded hackers as part of a campaign against ITV Digital, a service that ended some years ago. Panorama spoke with the two hackers who were funded for their activities, and their comments were repeated in a BBC news report. They said that they were funded by a smartcard firm called NDS, which the BBC reported was itself 50 per cent funded by Murdoch. [23] New allegations have surfaced that a News Corporation company called NDS hired a hacker to dig up the set-top pay-TV codes of a rival in the digital smartcard business called ITV Digital. [33] RACHAEL BROWN: NDS denies that it used the THOIC website to sabotage the commercial interests on ITV Digital or any other rival. It says it recruited hackers to track and catch hackers and pirates. Similar allegations of corporate espionage are being levelled against News Corporation in other parts of the world, including Italy. [28] NDS denies that it used the THOIC website to sabotage the commercial interests of ONdigital, or any other rival. It says it recruited hackers to track and catch hackers and pirates. Similar allegations of corporate espionage are being levelled against News Corporation in other parts of the world, including Italy. In a statement, News Corporation said it was proud to have supported NDS in its "aggressive fight against piracy and copyright infringement". "The BBC did not pose questions to News Corporation ahead of broadcast and was unwilling to engage in any conversation on this issue, which is disappointing," the statement added. [18]

NDS strongly denied the claims, saying it had never authorised or condoned the breaking of the code of a rival. It said it used hackers such as Mr Gibling to gain information about piracy to protect its own business. [15] The distributed codes allowed consumers to access ITV Digital programming without paying. NDS admits to hiring Gibling, but claims, he was merely a consultant used to inform on hackers. [33]

ITV's former CTO, Simon Dore, claims that piracy was the "killer blow" for the company. Gibling maintains that the codes offered on the Thoic site originated from NDS. Gibling says that the website was his in name only, that it truly belonged to NDS. [33] The company comprehensively denies ever promoting piracy. It also says Gibling was an informant, never an employee. Adams and Withall were part of a secretive unit within News Corporation called Operational Security, which was attached to NDS. Its role was to fight piracy _ but it has faced repeated claims that it gained advantage for NDS pay TV management products by encouraging piracy of its competitors. [29] NDS has been sued for piracy by some of the world's largest pay TV broadcasters, including Canal Plus in France, EchoStar and DirecTV (an NDS client) in the U.S., Sogecable in Spain and MEASAT's Astro platform in Malaysia. Canal Plus dropped its 2002 lawsuit as part of a deal to sell its Telepiu pay TV arm to News; DirecTV dropped its claim against NDS in 2004 after News took control of the group; Sogecable and MEASAT dropped their lawsuits after several years; while EchoStar won nominal damages on three counts in a 2008 trial and had to pay $18 million legal costs to NDS. In Italy, a leading anti-piracy advocate, Davide Rossi, who was an NDS consultant, is facing trial on charges that he helped and protected an Italian hacker who was targeting the Swiss Nagra group, which was providing encryption for News's Sky Italia. [29] ONdigital, owned by Carlton and Granada, later became ITV Digital but went out of business in 2002, with claims piracy had played a significant part in its demise. Its exit from the market left Mr Murdoch's Sky Television as the only pay TV operator at the time. The claims are the latest blow for News Corp, which is still reeling from the phone-hacking scandal that saw the closure of the News of the World and resulted in both Mr Murdoch and his son James being interrogated by MPs. [25] The widespread availability of the codes led to the collapse of ITV Digital, previously ON Digital, killing Sky TV's main rival in 2002 just four years after the venture was launched. [11]

NDS was sued in a $3 billion lawsuit in 2002 by Canal Plus, which had supplied the scrambling technology for ITV Digital and accused NDS of extracting the code from the cards and leaking it onto the Internet. [7] I was in charge of the unit so technically I was running Thoic; but on a day to day basis, absolutely not." In one of the most controversial sections of the program, Gibling describes a meeting with Adams and other NDS staff where he was told that a hack was being worked on for OnDigital, as ITV Digital was then known. Adams flatly denies any such conversation. BSkyB and News had been bitterly critical of the launch of OnDigital in late 1998, after its shareholders Carlton and Grenada dropped an earlier decision to use NDS as its conditional access system (as the smartcard decryption process is termed). In February 1998 they announced they would use a French system called Seca, developed by Canal Plus. [29] Panorama alleged the codes were publicised by the world's biggest pirate website, the House of Ill Compute (THOIC). Lee Gibling, who ran THOIC, said Mr Adams sent him the ONdigital codes so other pirates could use them to make thousands of counterfeit smartcards. He said he was being paid 60,000 a year by Mr Adams and was given thousands more to buy computer equipment. The site had sent people update codes: ''We wanted them to stay and keep on with ONdigital, flogging it until it broke.'' ONdigital, later renamed ITV Digital, lost more than a 1 billion, and 1500 staff lost their jobs when it collapsed in 2002. Mr Gibling said he and another employee later destroyed much of the computer evidence by smashing hard drives with a sledgehammer. [26] Gibling claimed that Thoic was also used to defeat any countermeasures deployed by ITV against the piracy, saying that new codes were later published on the site. "We wanted people to be able to update these cards themselves, we didn't want them buying a single card and then finding they couldn't get channels," he told Panorama. "We wanted them to stay and keep with On Digital, flogging it until it broke." [9] Adams had been head of criminal intelligence at the Metropolitan Police and Len Withall, who had been a chief inspector. Both men were secretly filmed by Panorama. Adams claimed he "would have arrested" Gibling if he had known ITV Digital's code had been published on Thoic and denied having the codes himself. [20]

The Panorama program, which goes to air on Monday evening in the UK, includes an interview with Lee Gibling, the former hacker who was paid £5000 a month on top of operating costs to run Thoic. He said the website was controlled and funded by NDS Ltd, an Israeli technology company Murdoch set up in 1988 to provide encryption services to his new satellite operation, Sky Television. [29] The allegations come from a man named Lee Gibling that operated website in late 1990s called the House of Ill-Compute and was also known as Thoic. It sounds as if the website was a place to hire pirates and hackers. According to Gibling, NDS funded the expansion of his website and later had him distribute pay-TV codes from its rival. [33] The claims have been made by Lee Gibling who set up a website in the late 90s known as The House of Ill-Compute, or Thoic. Gibling told the BBC he was paid to publish stolen info. His contact at NDS was Ray Adams, who at the time was head of UK security for the firm which makes smartcards for all News Corporations' pay-TV companies globally. [20]

RACHAEL BROWN: So NDS now controlled the biggest pirate website in the world and Panorama alleges used it to recruit one of the best hackers in the world. A young German Oliver Kommerling had hacked into sky's latest smartcard and Ray Adams from NDS security paid him a visit. OLIVER KOMMERLING: Adams made me a proposition and he looked at me and said could you imagine working for us? This was really after half an hour. RACHAEL BROWN: The program goes on to detail how Mr Kommerling unlocked the secrets of their competitors' smart cards. [28] The television programme said that NDS used hackers to crack the security of the encryption cards of OnDigital, the UK broadcaster ITV's entrant in the pay-television market, which went bust in 2002 in the face of competition by News Corp's British Sky Broadcasting unit. [21]

The documentary revealed that NDS, a News Corporation affiliated company, hired pirate hackers to decode the technology used in competitor ITV ONdigital's smart cards. [34]

NDS - which was owned by Rupert Murdochs News Corporation - secretly hired German hacker Oliver Kommerling to unlock the secrets of Skys competitors smart cards. Once he had uncovered the system, the codes - needed to create counterfeit smart cards - ended up online. [30] Rupert Murdoch's News Corp was yesterday facing fresh allegations over its business practices after an Australian newspaper released 14,000 emails concerning one of the group's security subsidiaries. The emails, said to be from the hard drive of an ex-head of security at NDS, a former News Corp subsidiary specialising in set-top box technology, appear to show the company paid computer hackers to work with its "operational security" unit. [35] LONDON/MELBOURNE (Reuters) - Pressure is building in Britain and Australia for fresh probes into Rupert Murdoch's News Corp ( NWSA.O ), already under siege over phone-hacking claims, after allegations that it ran a secret unit that promoted pirating of pay-TV rivals. The Australian Financial Review on Wednesday alleged that News Corp had used a special unit, Operational Security, set up in the mid-1990s, to sabotage its competitors, reinforcing claims in a BBC Panorama documentary aired earlier this week. "These are serious allegations, and any allegations of criminal activity should be referred to the AFP (Australian Federal police) for investigation," a spokeswoman for Australian Communications Minister Stephen Conroy told Reuters. [6] Rupert Murdoch's News Corp had a secret unit that promoted pirating of pay-TV rivals, an Australian newspaper reported, adding to pressure on the Murdoch empire which is already under siege over hacking claims in Britain. The Australian Financial Review, citing internal documents it dug up during a four-year investigation, said News Corp had used a special unit, Operational Security, set up in the mid-1990s, to sabotage its competitors. [36]

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Rupert and James Murdoch, pictured here giving testimony in the News Corp phone hacking row, have vehemently criticised film and television piracy. Rupert Murdoch's media empire, still struggling with the crisis over telephone hacking by its journalists at News International, is facing fresh allegations that it promoted pay TV piracy to cripple a rival broadcaster in Britain. [29] The 30 minute BBC investigative show also "examines the role of former senior police officers in recruiting people to break the law - to bring down Murdoch's commercial rival." These allegations, if proved correct, will mean fresh worries for News Corp after the phone hacking scandals involving two of its UK newspapers (News of the World and The Sun), resulted in the closing of the former last July with a string of other casualties including top News execs including James Murdoch, who resigned as executive chairman of News International and Rebecca Brookes as News Intl CEO. Brookes as former editor of both tabloid titles was recently rearrested for her role in the phone hacking scandal which involved various celebs including Jude Law, Sienna Miller and Charlotte Church. [1]

Ofcom, the UK's FCC, is currently examining whether Murdoch and News Corp. are "fit and proper" persons to be in control of BSkyB, the company that runs Sky TV. News Corporation currently owns 39% of BSkyB. Tom Watson, a member of the Parliament's Culture, Media and Sport Select Committee that has been examining the phone-hacking scandal, has called for Ofcom to examine these new allegations in their assessment: "Clearly allegations of TV hacking are far more serious than phone hacking," he said. [20] The regulator has warned that it could revoke Sky's TV licence in the UK if it finds sufficient cause for concern. Tom Watson MP, a member of the Culture, Media and Sport Select Committee, wants Ofcom to take into account these new allegations against NDS. "Clearly allegations of TV hacking are far more serious than phone hacking," he told Panorama. [9]

The United States Department of Justice, a federal court jury, a federal trial court, and a federal appellate court have all rejected allegations that NDS was responsible for TV piracy or that NDS distributed codes that facilitated that piracy. It is wrong to claim that NDS has ever been in the possession of any codes for the purpose of promoting hacking or piracy." [27] The ABC has been unable to contact News Corporation. This is Rachael Brown in London reporting for AM. "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. Whilst it was not reported fully in the programme, NDS has consistently denied any wrongdoing to Panorama and we fully accept their assurances. The United States Department of Justice, a federal court jury and a federal appellate court have all rejected allegations (including those about Canal Plus) that NDS was either responsible for TV piracy or for distributing codes to facilitate piracy. [28] News Corp said in a statement it fully accepted NDS's assurance there had been no wrongdoing. It added: ''The United States Department of Justice, a federal court jury and a federal appellate court have all rejected allegations that NDS was either responsible for TV piracy or for distributing codes to facilitate piracy. [26]

The United States Department of Justice, a federal court jury and a federal appellate court have all rejected allegations. that NDS was either responsible for TV piracy or for distributing codes to facilitate piracy." News Corp. added: "The BBC did not pose questions to News Corporation ahead of broadcast and was unwilling to engage in any conversation on this issue, which is disappointing." [17]

"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 and its accuser having to pay almost $19m in costs - a point that the BBC neglected to include. [27]

NDS was cleared of the main charges and EchoStar won a tiny fraction of the $2 billion in damages it had sought. Earlier this month, NDS was awarded $19 million in damages after the U.S. Supreme Court denied a petition by EchoStar and Swiss digital security company Kudelski over their allegations that NDS had abetted piracy in the United States. [7] In January, the United States Supreme Court ruled in favor of NDS and awarded the company $19 million in damages after a protracted battle with EchoStar (now Dish Network). In a 2003 lawsuit, EchoStar had accused NDS of hacking into its system. "It is only with the active antipiracy efforts of companies such as ourselves that the pay-TV industry is able to evolve and continue to enable people to enjoy premium TV viewing," NDS's executive chairman, Abe Peled, said in a statement last week when the company announced it had received its full damages payment. In 1992, News Corporation paid $15 million for NDS, then an Israeli start-up, to provide encryption services for its burgeoning satellite-television business. [37]

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Although Sky Italia and NDS have no formal involvement in the proceedings, and there is no suggestion that the anti-bribery provisions of the Foreign Corrupt Practices Act apply in a case concerned with the hacking and piracy of television encryption technology, the legal antennae of the DoJ's lawyers are now tuned to any allegations even tangentially linked to the Murdoch empire. That sensitivity applies to News Corp itself. It is most likely coincidence, but after the phone-hacking scandal accelerated last July with the revelations surrounding Milly Dowler - and Tom Mockridge was sent to London to clean up Wapping - a decision was taken to begin off-loading News Corp's share in NDS. [38] Watson said the report was now unlikely to be published before the Easter holiday on April 8. He said the new revelations were unlikely to affect the committee's work, since they were not part of its remit. James Murdoch was not involved in News Corp's UK newspaper operations when the phone-hacking took place at the News of the World but is under scrutiny for failing to uncover the scale of the problem when he took charge there shortly afterwards. Murdoch is now based in New York following his promotion to deputy chief operating officer of News Corp last year, and is focusing on the conglomerate's pay-TV businesses. He severed all ties with the UK newspapers earlier this month. NDS, whose technology is used by BSkyB and News Corp pay-TV operators including Sky Italia and Sky Deutschland, was sold by News Corp and private equity firm Permira to Cisco this month for $5 billion. [5]

Ofcom are now applying the fit and proper person test to Rupert and James Murdoch. RBR-TVBR observation : Seems News Corp. keeps finding itself under fire in the UK. And this allegation cuts more to the core of News Corp.' s assets--television. NDS is a global company with offices in the U.S. Hopefully, none of these claims will spread to U.S.--it sounds like an isolated incident. [20] The satellite broadcaster, chaired by James Murdoch, told the programme it had no involvement in how the unit was run and was not aware of Thoic. Mr Murdoch was a non-executive director of NDS at the time although there is no evidence that he knew about the events reported by Panorama. Tom Watson MP, a member of the Culture, Media and Sport Select Committee has called for media regulator Ofcom to examine these allegations. [30] The short format of the documentary, it ran at just 30 minutes, meant we never really trace back the links in the chain of companies. James Murdoch recently left News International to focus on BSkyB and we are told he was non-executive director of NDS at the time, though there is no suggestion that he was aware of the hacking. Ofcom are currently considering whether James Murdoch and News Corporation are 'fit and proper' to run BSkyB. Panorama's investigation will undoubtedly give them food for thought. [34] James Murdoch, the deputy chief operating officer of News Corp., was a non-executive director of NDS when the alleged hacking took place, BBC said. [24]

Aired last night on BBC One, Panorama contained information suggesting NDS hacked and leaked data on ITV Digital cards, enabling thousands of counterfeit versions to be produced by pirates and then flooded onto the market. [9] ITV Digital's former CTO, Simon Dore, told BBC's Panorama program that piracy was "the killer blow for the business, there is no question. The business had its issues aside from the piracy but those issues I believe would have been solvable by careful and good management. [20] The BBC program said the alleged hacking led to mass piracy and technical problems at ITV Digital (known as OnDigital at the time of the alleged hacking). [37]

The Carlton and Granada owned company folded in 2002 following rebranding which saw it renamed ITV Digital. An NDS statement denied the claims, calling them "simply not true". [10] A website used to spread information on how to pirate pay television smart cards belonging to the defunct ITV Digital was funded by part of Rupert Murdoch's News Corp, it was claimed last night. [15] Lee Gibling, a pirate caught hacking into BSkyB's system was, rather than being castigated, instead employed to crack the ITV smart card codes. Encrypted smart cards provided the key to the digital television market in the UK. The cards are the means through which digital television companies sell their products to customers. [34] The issue, though technical, is brought to life through three main protagonists: Lee Gibling, the pirate caught hacking into BSkyB's system who, rather than be castigated, was then employed to crack the ITV smart card codes. [34]

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The codes were then allegedly published on THOIC's website, unlocking programming for ONdigital. "We sent them out update codes, we wanted people to be able to update these cards themselves, we didn't want them buying a single card and then finding they couldn't get the channels," Mr Gibling said. "We wanted them to stay and keep with ONdigital, flogging it until it broke." The company's former chief technical officer, Simon Dore, says this spelt ONdigital's downfall in 2002. "The real killer, the hole beneath the waterline was the piracy - we couldn't recover from that," he said. The downfall cost the operator's shareholders more than a billion pounds and 1,500 employees lost their jobs. Panorama secretly filmed Mr Adams denying any knowledge of these codes. [18] Internal NDS documents, obtained by Panorama, show a hacked code was passed to Mr Adams from a technology expert inside the company. Mr Gibling claimed he was paid £60,000 a year by NDS and that while the website was in his name it essentially belonged to NDS. [11]

Canal Plus sued NDS, but the case was settled when News Corp bought out and broke up Canal Plus Technologies. Though not new allegations, Panorama claimed to have email traffic showing NDS executives knew of and supported the leaking of hacked codes, some of which came from Oliver Konnerling, sometimes referred to as the world's leading hacker, and an NDS consultant, who Panorama interviewed at his home in Monaco. [27] The BBC's Panorama broadcast evidence suggesting that NDS, a UK-based specialist in encryption techniques for satellite TV signals, helped to pay for The House of Ill Compute (THOIC), a website for hackers run by a professional pay-TV "pirate". [15] The BBC's investigative Panorama program has just aired allegations that Mr Murdoch's British pay TV operation BSkyB recruited a hacker to bring down a commercial rival. [28] A News Corporation subsidiary company used a computer hacker to sabotage Sky TVs biggest rival at the turn of the millennium, BBC Panorama has reported. [30] Panorama investigates pirate hackers used to infiltrate Sky TV's competitor. [34]

NDS described the lawsuit at the time as "outrageous and baseless", but the dispute was ended when News Corp acquired Canal+'s Italian operation and merged it with Sky Italia. This was preceded in 1992 by a case in which Vivendi and EchoStar accused NDS of illegally extracting the code from smartcards used to unscramble satellite TV signals. [9] In 2002 Canal+ filed a lawsuit in California alleging that NDS "spent large amounts of money and resources" to crack the code on television smart cards used by a Canal+ subsidiary in Italy. That lawsuit -- described at the time by NDS as "outrageous and baseless" -- ended when News Corp acquired the Canal+ Italian operation and merged it with its own in the country, creating Sky Italia. [11]

A document obtained by The Independent, which has been put before an Italian court shows how investigators became concerned at the activities of Davide Rossi, a Milan-based consultant to NDS who now stands accused of involvement in a piracy ring which targeted, among others, Nagra France, a smartcard supplier in competition with NDS. In 2003 and 2004, Mr Rossi was in regular contact with Pasquale Caiazza, a suspected Neapolitan computer hacker who was also being paid as a consultant to NDS. Italian investigators, who had eavesdropped conversations between the two men, said: "The interception activity, despite not providing unequivocal proof against Rossi, has however allowed us to gather evidence leading to the reasonable hypothesis that NDS, presumably, gave Caiazza, via its Italian consultant Rossi, access codes to transmission systems, codes which should have remained secret and were instead used by hackers to create a programme." [4] In 2008, the plaintiff EchoStar was ordered by a court to pay nearly $19 million in legal costs to News Corp. In Australia, documents uncovered by the AFR -- owned by the Fairfax media group, a rival to News Corp. in Australia -- reveal that NDS encouraged and facilitated piracy by hackers of its business rivals. The AFR is publishing thousands of emails held in an archive by former Metropolitan Police commander Ray Adams, who was European chief for Operational Security between 1996 and 2002, on its website. [39] The Australian newspaper said the emails had originated from the computer of Ray Adams, a former commander in the Metropolitan Police in London, who served as head of operational security for NDS in Europe from 1996 to 2002. NDS had no immediate comment but News Corp said: "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." [21]

NDS's main business is encryption software that allows pay-TV providers, including BSkyB, to deploy subscription-based, geo-locked content via set-top boxes, PCs, mobiles and other devices. The deal is expected to close in the second half of this year. News Corp issued its own statement on the Panorama claims, saying: "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. "Whilst it was not reported fully in the programme, NDS has consistently denied any wrong-doing to Panorama and we fully accept their assurances. [12]

"After 14 years when no one has hinted that I ever did anything wrong in my fight against piracy the BBC have decided to make me a villain." An NDS spokesman told the Financial Review last week: "Panorama have chosen to focus on issues that have been conclusively disproven, and NDS will take all necessary action to hold responsible anyone who chooses to repeat these baseless and damaging allegations." NDS was a highly successful company, and it would be more appropriate to focus on the successful sale of NDS last week by its joint owners News Corp and private equity group Permira to U.S. giant Cisco, for $5 billion. [29] The newspaper, which belongs to News rival Fairfax, said the evidence emerged during a four-year investigation, as it began releasing 14,000 emails concerning one of the group's security subsidiaries. It comes after the BBC's Panorama programme on Monday made similar charges against the company in Britain. The new allegations come as News Corp. is embroiled in a phone-hacking scandal in Britain that saw the company shut down its mass-selling News of the World tabloid. The Australian Financial Review claimed a secret unit of former policemen and intelligence officers within News known as "Operational Security" crippled the finances of competitors such as Austar and Optus. [40] SYDNEY — Rupert Murdoch's News Corp. Wednesday faced a fresh barrage of allegations over its conduct, with an Australian newspaper claiming it had a secret unit that promoted pirating of pay-TV rivals. The Australian Financial Review said the company sabotaged its competitors by promoting high-tech piracy that damaged Austar and Optus at a time when News was moving to take control of the Australian pay-TV industry. [40] ACCUSATIONS OF PIRACY: The Australian Financial Review claims Rupert Murdoch's News Corp had a secret unit devoted to promoting piracy of rival TV networks' content. [36] A secret unit within Rupert Murdoch's News Corporation promoted a wave of high-tech piracy in Australia that damaged Austar, Optus and Foxtel at a time when News was moving to take control of the Australian pay TV industry, a four-year investigation by The Australian Financial Review has revealed. [31] Revelations that a secret unit within Rupert Murdoch's News Corp promoted high-tech piracy that damaged pay TV rivals will increase fears of corporate espionage in boardrooms across Australia and around the world. [41] RUPERT MURDOCH'S TV media empire is being accused of corporate espionage, computer hacking and piracy in a campaign that allegedly destroyed a rival to the lucrative British satellite broadcaster BSkyB. [31] As if Rupert Murdoch's News Corporation wasn't taking enough heat for its phone hacking scandals, now all Britain is a buzz that the megamedia corporation also brought down a rival satellite TV operator by dirty pool tactics. [2]

Britain's communications regulator is monitoring allegations of phone hacking and bribery at Murdoch's UK newspapers in a continued review of whether BSkyB is a 'fit and proper' holder of a broadcasting license. These charges - if true may push News Corp to fail the 'fit and proper' test. A similar hacking case has been uncovered in Italy. The Independent reported that computer whiz Pasquale Caiazza was working as a consultant for a News Corp company when he was arrested on charges of spying on a rival pay-TV business. [42] The allegations follow a media storm over phone hacking at News Corp's newspaper News of The World and comes amid an investigation by UK media regulator Ofcom into whether satcaster BSkyB - 39% of which is owned by News Corp - is "fit and proper" to hold a broadcast licence. This month, News Corp and Permira, co-owners of NDS, agreed to sell the business to Cisco for US$5bn. [12]

In terms of revelations, Panorama provided not much that wasn't already known, or assumed, in the NDS hacking saga: Criminals allege criminal behaviour in the inevitably very murky world of encryption, hacking and counter measures. NDS admit hacking - to test its rival's technology - and it is accepted as standard practice. NDS strenuously denies leaking those hacks and the allegation has yet to be tested in a court of law. The allegations and the damage they cause, will be weighed in public opinion and, more importantly, in the board rooms of partners and investors around the world. The first big question is will it affect the Cisco takeover? It would be interesting to know how thorough the Disclosure Letter in the deal is on these subjects and how much contingent liability has been provided. [32]

The U.S. Department of Justice, a federal court jury and a federal appellate court have all rejected allegations that NDS was either responsible for TV piracy or for distributing codes to facilitate piracy. [12] NDS has consistently denied any wrongdoing. In a statement, NDS said, "It is wrong to claim that NDS has ever been in the possession of any codes for the purpose of promoting hacking or piracy." [37] NDS never denied hacking rival cards - which is legitimate practice - but strenuously denies distributing the resulting codes and thereby undermining rivals in the market. [27] The boldest of pirates were subsequently found out, imprisoned and charged huge fines. According to the Guardian, ONdigital smart card developer Canal Plus sued NDS in a U.S. Court in 2002, alleging that NDS had hacked its codes. [2] NDS, a British-based company, provides antipiracy smart cards for set-top boxes and DVRs that help satellite TV systems prevent signals from being stolen. NDS has 5,000 employees operating in five countries; BSkyB is one of its largest clients. [37] Documents uncovered by the newspaper allegedly reveal that NDS began hunting the pirates targeting News' own operations. In doing so, they began encouraging and facilitating piracy by hackers not only of its competitors but also of companies for whom NDS provided pay-TV smart cards. [40] RACHAEL BROWN: From phone hackers to pay TV pirates. These fresh hacking claims levelled at News Corporation centre on pay TV smart cards. [28] The programme, known as Hack V7, was used to decode a Nagra France smart card "with very serious financial and reputation losses caused to Nagra," according to Italian police. Both Mr Caiazza and Mr Rossi deny involvement in piracy. Mr Rossi claims he was merely feeding back intelligence on hacking to his clients. [4]

Codes for ITV's smart cards (which were used to authenticate users) quickly showed up on THOIC, allowing for widespread counterfeiting and helping to drive the fledgling company out of business. [3] Panorama says it spoke to several former pirates who confirmed that OnDigital codes were on Thoic. Adams told the Financial Review that he had arranged for an independent company to conduct a polygraph test upon him when he denied that he "provided any code or software, using many means to do so, to anyone that could use such material to hack". He was also tested on his denial that he had "provided update keys to enable anyone to overcome On Digital's electronic counter measures". "It was established that there was no deception in my answers, he told the Financial Review in an email on Monday. [29] Rupert Murdoch's media empire took another hit last night as BBC's Panorama revealed that a company with News Corporation links may have sabotaged a competitor's digital television plans. [34] A company part-owned by News Corporation was complicit in the posting of hacked information on a website which led to the collapse of one of Rupert Murdoch's main digital television rival in the UK, a BBC documentary has alleged. [11]

A subsidiary of Rupert Murdoch's News Corporation has been accused of enlisting the help of a computer hacker to bring down a rival company. [18]

If proven the allegations will cause even greater damage to the reputation Rupert Murdoch's empire, and could leave the company facing questions over whether it funded piracy. [11] The broadcasting watchdog Ofcom is to investigate claims that a subsidiary of Rupert Murdoch's News Corp helped to hasten the demise of one of its British pay-TV rivals through the activities of a piracy website. [4] MELBOURNE Rupert Murdoch's News Corp had a secret unit that promoted pirating of pay-TV rivals, an Australian newspaper reported on Wednesday, adding to pressure on the Murdoch empire which is already under siege over hacking claims in Britain. [14]

"Foxtel notes that there are no allegations of wrongdoing by Foxtel," a spokesman said in a statement emailed to Reuters. UK lawmaker Watson is known for his dogged questioning of James and Rupert Murdoch for their role in the phone-hacking affair, notoriously comparing James to a Mafia boss when he appeared at a parliamentary hearing on the hacking. The committee has been due since early this year to present a report based on its investigations, which is expected to be critical of James Murdoch and may determine whether he has a future in Britain. [6] News faces three big problems bearing down. James Murdoch was, is, on the board of NDS. That isn't going to help save him as the anointed successor. Ofcom can't ignore the latest allegations in its fit and proper person test over the Murdoch's and BSkyB, and the phone hacking scandal has burned off all the political cover News would normally enjoy. [32]

Tom Watson, a member of Parliament, has called for Ofcom to expand a current investigation of News Corp. to include Gibling's claims. "Clearly allegations of TV hacking are far more serious than phone hacking," he said. [3] MELBOURNE Media claims that News Corp. (NWS) promoted the pirating of its pay TV rivals are serious and any allegations of criminality should be referred to the police for investigation, the Australian government said Wednesday. [43] The Australian Financial Review newspaper alleged in an investigative report that piracy cost News Corp.' s pay TV rivals millions of dollars a year. "These are serious allegations, and any allegations of criminal activity should be referred to the AFP (Australian Federal Police) for investigation," a spokeswoman for Communications Minister Stephen Conroy told Dow Jones Newswires. [43]

The emails, AFR said, pointed to Operational Security actions that sabotaged News Corps business rivals, illegally accessed phone records and manufactured lawsuits against pay TV firms, purportedly under the auspices of NDS. [44] The AFR investigation has revealed a global trail of corporate dirty tricks directed against competitors by a secretive group of former policemen and intelligence officers within News Corp, known as Operational Security. Their actions devastated News's competitors, and the resulting waves of high-tech piracy assisted News to bid for pay TV businesses at reduced prices including DirecTV in the U.S., Telepiu in Italy and Austar. These targets each had other commercial weaknesses quite apart from piracy, the AFR says. [31] The AFR said on its report Wednesday that operatives under the employ of News Corp, owned and operated by Australian media mogul Rupert Murdoch, conducted piracy operations against pay television firms Austar, Foxtel and Optus. Its findings, the newspapers said, were based on four years of investigation and were supported by the thousands of email exchanges that the AFR accessed courtesy of Ray Adams, who reportedly served as chief for the European operation of Operational Security. [44] The Australian Financial Review's investigation involved 14,400 emails from a hard drive in a laptop used by Ray Adams, who was the European chief for NDS Operational Security from January 1996 to May 2002. [6]

The hacker, Oliver Koermmerling, said on BBC1's Panorama programme last night that he was recruited by News Corp-owned NDS and its head of security, Ray Adams. [42] The Panorama program aired emails that apparently showed that the codes of ONdigital were first cracked by a hacker named Oliver Koermmerling. He told the program he had been hired by NDS's head of UK security, Ray Adams. [26]

NDS's Operational Security unit, staffed by former police and intelligence officers, used hackers to crack the codes of smartcards issued to customers of rival pay-TV services. This cost News Corp's rivals millions of dollars, it added. [6]

NDS has denied Gibling's claims and said Thoic was only used to gather intelligence on hackers. [20] NDS denied the report, saying Thoic was only used to gather intelligence on hackers, and Gibling worked as a consultant who was used legitimately to inform on hackers. [13]

The story first came to light when, in an ironic twist, hackers targeted the THOIC website and discovered Gibling's links to NDS. THOIC was hastily disbanded, hard drives were destroyed and it was suggested that Gibling leave the country. He continued to receive payment from NDS until 2008. [34]

Gibling said, "Everything that was in the closed area of Thoic was totally accessed by any of the NDS representatives." He continued, "It was NDS. It was their baby and it started to become more their baby as they fashioned it to their own design." [33]

Gibling goes so far as to allege of NDS that the ITV hacking plot was "their baby." [8] LEE GIBLING: Yeah. RACHAEL BROWN: The company's former chief technical officer Simon Dore says this spelled ITV Digital's downfall in 2002. [28] ITV Digital's former chief technical officer Simon Dore told Panorama that piracy was "the killer blow for the business." [12] The new codes created by ITV Digital were sent out to other piracy websites. [13] ITV Digital's former chief technical officer, Simon Dore, told the programme that piracy was "the killer blow for the business, there is no question". "The business had its issues aside from the piracy. but those issues I believe would have been solvable by careful and good management. [11] ITV Digital went bankrupt in 2002 citing piracy of its smartcards as a major reason for its failure. [33] Though piracy was undoubtedly a problem for ITV Digital, few would agree that it was "the killer blow" in the fierce pay-TV battle with BSkyB. [10]

ITV Digital was Sky's biggest pay-TV rival when it launched in 1998 as ONdigital. [12] In 1998, at the launch of digital TV in the UK the main brands on offer were ITV's ONdigital and Murdoch owned BSkyB's Sky TV. [34] The TV regulator is already investigating whether Mr Murdoch and News Corporation are "fit and proper" persons to be in control of BSkyB, the company that runs Sky TV, in light of the phone-hacking by journalists at the News Of The World. [30]

The company later went bust. Panorama's investigation now throws the light on yet another kind of hacking, this time focusing on the 'commercial heart' of Murdoch's empire: pay TV. [34] After the discovery of the hacking of Nagra Franceis smart cards, Sky Italiais then-chief executive Tom Mockridge - who is now in charge of Murdoch's papers in London - ripped up a multi-year contract with the company. [45] Smart cards are credit card-sized devices that slot into the front of your set-top box. They are used by all of the current digital TV providers - including Freeview, Sky, Virgin and several others. [30] A young German, Oliver Kömmerling, had hacked into Sky's latest smart card. He said Mr Adams from NDS paid him a visit. "Adams made me a proposition and he looked at me and said could you imagine working for us? This was really after half an hour," he said. [18]

Two months later, the NDS Black Hat team, a reverse engineering group set up by Operational Security chief Reuven Hasak in Haifa, set out to crack the Canal plus Seca card, a legal and common practice within the industry. [29] Operational Security was a unit of News Corp's secure-encryption subsidiary NDS, which has denied any wrongdoing in relation to the Panorama claims. News Corp, which this month sold NDS to Cisco Systems ( CSCO.O ) for $5 billion, said it accepted those assurances. [6] A News Corp spokesman said: 'NDS has consistently denied any wrongdoing to Panorama and we fully accept their assurances. A BBC spokesman said: 'All parties against whom allegations are made in this programme. have been given the opportunity to respond. During the airing of Panorama on BBC1 on Monday night, Sally Bercow, the wife of the Speaker of the House of Commons, admitted on Twitter that she had bought a black-market subscription to ONdigital. [25] The new allegations were made by the BBC on last night's Panorama. They focussed on NDS, a company which manufactures smartcards for News Corporations' pay-TV companies across the world. [11] Allegations of fierce competitive behaviour, which were not illegal under Australian law at the time, the Review said, came a day after the BBC's Panorama made similar charges against NDS in the UK. [35] Allegations of fierce competitive behaviour, which were not illegal under Australian law at the time, the AFR said, came a day after the BBC's Panorama programme levelled similar charges against NDS's conduct in the UK. [21]

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NDS, a subsidiary of News Corporation, manufactures smartcards for all News Corporations' pay-TV companies. Through a combination of interviews with whistle-blowers, secret filming and leaked internal emails, Panorama revealed that NDS hired expert pirate hackers to decode their rival's paycards. [34] With that NDS controlled the biggest pirate website in the world, and Panorama alleges it used it to recruit one of the best hackers in the world. [18]

Foxtel said NDS was one of many service suppliers it had used, and the pay-TV company had worked hard to combat piracy. [6] The documents reportedly show that NDS sabotaged business rivals, fabricated legal actions and obtained telephone records illegally. NDS rejected those claims and News Corp. has consistently denied any role in fostering piracy in pay television. [40] "NDS sabotaged business rivals, fabricated legal actions and obtained telephone records illegally," the newspaper said. It said the moves helped News Corp take over competitors like DirecTV in the United States and Telepiu in Italy cheaply. [14]

The newspaper said Adams plotted a legal campaign in an attempt to ruin the reputation of a Swiss hacker, Jan Saggiori, who had evidence that NDS had sabotaged the products of News Corp's rivals. [6]

The emails, said to be from the hard drive of a former head of security at NDS, a former News Corp subsidiary, appear to show that the company paid computer hackers to work with its "operational security" unit. [21]

Responding to the allegations NDS released an official statement saying that the company never authorised or condoned posting the codes on any website. However internal emails suggests both men had received correspondence about the codes and the fact they were leaked to the public. [34] NDS says it has never been in possession of any codes for the purposes of promoting piracy. [29] News Corp has denied any part in promoting pay TV piracy, the newspaper said. News Corp sold NDS this month to Cisco Systems for $5 billion. [14] The answer is complex and multifaceted. Pay TV piracy, it's alleged, was used to undermine the financial position of News Corp's competitors, either sending them bust or allowing News Corp to buy said competitors at significantly reduced prices. [16] Pay TV piracy hits Murdoch Skip to navigation Skip to content JavaScript disabled. [31] According to the AFR, the group's actions in unleashing waves of high-tech piracy devastated News's competitors and helped the company to bid for pay TV businesses at reduced prices, including DirecTV in the U.S., Telepiu in Italy and Austar. [39] Canal Plus dropped the action in 2003 when News Corp bought Italian satellite pay TV company Telepiu from Canal Plus's then debt-stricken owner Vivendi, renaming it Sky Italia. [7]

"There's no suggestion anywhere that Sky or News Corp knew what NDS was doing," broadcaster and media consultant Steve Hewlett told Reuters. "But if it all turns out to be true, then you have a News Corp company once again behaving in ways that are less than proper," he said. [6] Content security technology has become increasingly important and valuable in the era of multi-screen delivery, and Cisco just announced that it would buy NDS from News Corp. and private equity firm Permira for about $5 billion. News Corp.' s is undergoing regulatory investigation as he attempts to take complete ownership of Sky operators BskyB, in which News Corp. already owns a 39 percent stake. [8]

During the period when News Corp also owned DirecTV in the U.S., NDS took over the security side of the operation. Both DirecTV and satellite rival DISH Network suffered then from rampant smartcard hacking. [2] Tom Watson, one of the most vocal members of the British Parliament on the question of phone hacking at The News of the World, said that, if true, the allegations against NDS could raise questions about whether News Corporation would pass the "fit and proper" requirement to operate as a broadcaster. [37] Both NDS and News Corporation deny the allegations and any wrongdoing. Deadline Hollywood are reporting that Sony Pictures UK is to release a number of its titles with UltraViolet digital versions included with their respective Blu-ray Discs and DVDs. [46] The following year NDS faced similar allegations relating to another rival, EchoStar. [11]

A spokeswoman for NDS said "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. [11] In Italy, a long-running pay-TV piracy trial is still ongoing. One of the defendants, Davide Rossi, says he was collecting intelligence on behalf of an NDS security officer. [7] The show alleged that Mr Gibling was being instructed by Ray Adams, a former Metropolitan Police officer who ran the security department for NDS. [11] The Australian newspaper, part of News Corp, said the emails had originated from the computer of Ray Adams, an ex-commander in the Metropolitan Police in London who served as head of operational security for NDS in Europe from 1996 to 2002. [35]

When the Operational Security unit was set up in 1996, NDS smartcards for BSkyB and U.S. satellite broadcaster DirecTV had been widely pirated. [29]

Operational Security has been tagged by AFR as the main outfit responsible for the high-tech piracy activities that were directed against News Corp rivals not only in Australia but also in the United States and Italy. [44] One of the glaring results of the security groups illegal activities was the annual financial bleeding of some $50 million suffered by News Corps rival companies, which AFR said precipitated the collapse of Austar. The news came out as Australias competition watchdog is approaching its final assessment of Foxtels $1.9-billion bid to purchase Austar, which when realised will allow the firm to establish its hegemony on the countrys pay TV industry. In a statement, News Corp has rejected suggestions that it was directly involved in illegal activities that aimed to eliminate its competitors. [44] Caiazza, a Naplesbased computer security expert, received nearly £12,000 in monthly instalments during 2003 and 2004 from a News International bank account in London. He is accused of pirating satellite TV encryption cards supplied to News Corpis Sky Italia by a contractor, Nagra France. [45] Speaker's wife Sally Bercow sparked fury after boasting on Twitter how she bought an illegal TV smart card in a pub. The notorious Celeb Big Brother contestant tweeted her dodgy deal while watching the cards being exposed on Panorama. She told her 45,000 followers: "I got a dodge OnDigital card for £10 down the pub. [47] When a smart card is pirated it can cost the pay TV operator hundreds of millions of dollars in lost revenue. [28] While piracy could cost pay TV companies hundreds of millions of dollars in lost revenue, many people, including police, minimised the offence. [29] The piracy cost the Australian pay TV companies up to $50million a year and helped cripple the finances of Austar, which Foxtel is now in the process of acquiring. [31]

A dirty tricks unit within News Corp promoted pay TV piracy in Australia, the Australian Financial Review has claimed in an investigation published today across a virtually unprecedented seven pages of the newspaper. [48]

"The sources of accusations that NDS participated in piracy of competitor conditional-access systems have been repeatedly discredited," an NDS spokeswoman told The Australian Financial Review. [29] News Corp has categorically denied any involvement in promoting piracy and points to a string of court actions by competitors making similar claims, from which it has emerged victorious. "This brings to the surface a lot of the intrinsic and difficult issues that organisations are confronted with almost on a daily basis in the context of cyber security and threats to their infrastructure," Simon Millett, a director with technology services giant Computer Sciences Corporation, told The Australian Financial Review. "Many organisations think they are secure but they probably aren't." While financial services institutions are among the most security conscious and typically spend about 3 per cent of revenue on protecting customer data, Mr Millett noted that it had become increasingly important for most organisations to demonstrate appropriate levels of enterprise security as more of their operations are exposed to the internet. [41] The British broadcasting watchdog Ofcom is set to investigate claims that a subsidiary of News Corp. helped to destroy one of the company's British pay-TV rivals via piracy, the Independent reported. [39] The company stressed that the allegations were not different from earlier claims by rival firms, which all failed to flourish. [44]

We have already heard that the organisation hacked into the phones of dead people, wounded soldiers and celebrities, but now there are allegations that it used hackers to crack systems belonging to a rival television provider, blowing it out of the water. [23] A decade ago, a German hacker reportedly obtained codes belonging to British Sky Broadcasting rival ONDigital, which folded in 2002. [42]

In an interview with the BBC, Adams denied ever handling the codes. NDS was sold to Cisco earlier this month for $5billion. [42] News Corp boost in Cisco's $5bn NDS deal Rupert Murdoch's firm expected to bank $1bn from sale of pay-TV software firm. [9] News Corp sold NDS this month to Cisco Systems for $5 billion, according to Reuters, adding that James Murdoch sits on the NDS board. [39] News Corp is BSkyB largest shareholder, with a 39 per cent stake, and James Murdoch - who was on the NDS board - is BSkyBs chairman. [10]

News Corporation owns 39.1 percent of BSkyB and James Murdoch serves as chairman of the board. The media company dropped its $12 billion bid to take over all of BSkyB in July amid a phone-hacking scandal at its tabloid The News of the World, which has since been closed. [37] However uncomfortable the fallout from the phone-hacking scandal has been for Rupert Murdoch in the UK, wider questions about the way News Corp has been governed now hold the potential to do serious damage to the company's global brand. [38] The crisis hitting Rupert Murdoch's News Corp is spreading as the U.S. Department of Justice monitors alleged hacking at two of the company's European satellite television firms. [42] The FBI has reportedly found no evidence of phone hacking within News Corp in the U.S., Murdoch's holding company based in New York. [42]

Atika Shubert looks back at how phone hacking scandal rocked Britain and Rupert Murdoch's media empire in 2011. [21] In Britain, there are new allegations this morning of hacking involving Rupert Murdoch's media empire. [28] Rupert Murdoch's media empire has been dragged into allegations of corporate espionage in the lucrative satellite television market dominated by News Corp companies. [45]

"No evidence about a link to ONdigital emerged," says the paper, and the case was dropped following a Murdoch purchase of Canal Plus assets. Why is all this coming out now? Because News Corp is attempting to take over controlling interest in BSkyB, and must pass a "fit and proper" test with the British government. Ironically, Murdoch closed his News of the World operation last summer, in an attempt to diffuse that other hacking scandal and save the BSkyB deal. Will Fox News, the Wall Street Journal, New York Daily News or iPad digi-paper The Daily get on this case today? Unlikely. [2] Before the hacking scandal, James Murdoch was widely regarded as the heir apparent to his father Rupert's powerful empire. [21]

James Murdoch in particular has been a vehement critic of piracy, calling for tougher penalties in a speech in Abu Dhabi two years ago. "These are property rights, these are basic property rights," he said. [29]

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SIMON DORE: The real killer, the hole beneath the waterline, was the piracy - we couldn't recover from that. RACHAEL BROWN: The downfall cost the operator's shareholders more than a billion pounds -1500 employees lost their jobs. Panorama secretly filmed Ray Adams denying any knowledge of these codes. [28] "It was NDS, it was their baby and it started to become more their baby as they fashioned it to their own design," Gibling told Panorama. [29] NDS has acknowledged the involvement, but said that it funded Gibling and his partner in an attempt to learn more about smartcard hackers. [23] NDS describes Thoic as a "honey pot" intelligence-gathering operation, in which hackers from around the world met in online chatrooms and communicated through Thoic email accounts, all under surveillance by NDS employees. [29] Reconstruction footage of the hackers' HQ feels like something out of a detective drama, while Gibling's company is creatively named The House of Ill Compute (THOIC). [34] Matthew Sorrell, who lectures in telecommunications and multimedia engineering at the University of Adelaide, said it was almost impossible to quantify the extent to which corporate espionage occurred but that secrets were often swapped in friendly chats between engineering professionals. "Engineers like to talk about what they do so you end up knowing quite a lot about each other," he said. "The bigger issue is hackers who steal customer credit card details and post them online for a laugh. They do a lot of damage because they ruin your reputation." Security-conscious organisations such as banks and governments typically issue tokens that require a new number to be entered every time a staff member logs in. "It needs to be kept in mind that it is not just companies engaged in dirty tricks, it is nations as well," he said. "If your company has valuable secrets, the spy agencies of other countries will be attempting to steal those secrets on behalf of their companies." [41]

The company rebranded as ITV Digital in 2001, but went into administration within a year. [30] Just to clarify, it was ITV Digital (its over-the-air digital TV service) that shut down, not ITV itself. [3] Even without the word of THOIC there's still plenty to cast suspicion that News Corp. sabotaged ITV Digital. [3] ITV Digital, owned by Carlton and Granada, folded in 2002, leaving the way clear for Sky to prosper as the UK's only digital pay-TV network before new competitors later entered the market. [9] Its main shareholders were ITV companies Carlton and Granada. BSkyB was part of the group that successfully bid to launch the service, but its involvement was vetoed by the Independent Television Commission. It provided several channels to On Digital, including Sky Sports and Sky One, on a subscription basis. [30]

The collapse of ITV Digital led to 1,500 job losses and plunged scores of lower league football teams into financial crisis. Shortly before its collapse ITV Digital had entered into a £315m television deal with the Football League. [11]

Thoics increasing popularity meant more and more people were accessing the codes and choosing to avoid paying for On Digital service. This was one of several problems at On Digital, which also suffered from poor reception, late delivery of set-top boxes and, crucially, an overpriced £315m contract for second-tier Football League matches. [30]

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U.S. satellite TV provider EchoStar, which had tried to join the Canal Plus suit, then sued NDS in 2003 in a similar case. [7] A BBC documentary reported that a company affiliated with the media conglomerate used computer hacking to advance the business interests of the broadcaster BSkyB, which is part owned by News Corporation. [37] News Corporation faced fresh scrutiny in Britain on Tuesday after a BBC documentary reported that a company affiliated with the media conglomerate used computer hacking to advance the business interests of the broadcaster BSkyB. [37]

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The airing of the documentary was postponed for two weeks while News Corporation apparently battled to stop it. The company's lawyers PSB Law LLP, supposedly sent a confidential legal message to several media warning them not to reproduce the allegations from the Panorama programme. [34] Mr Gibling was tracked down by the BBC and decided to give his side of the story. He told Panorama he was paid by NDS; and claimed he was told to publish the stolen information. [30] The Seca card used by OnDigital had two sorts of keys that could unlock the programming--general operating keys which were changed each month, and management keys which were unique to a small family of cards. Gibling claims Adams provided him with operating keys. Withall says this is "absolute rubbish, absolute rubbish". [29]

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ITV was at the time threatening pay-TV revenue at British Sky Broadcasting Group Plc (BSY), which is part-owned by News Corp., BBC said. [24]

SOURCES

1. News Corp Hack IPTV Rival To Death? - Smart Office
2. News Corp Under Fire, Again
3. News Corp allegedly hacked UK pay-TV competitor out of business | The Verge
4. Ofcom to investigate hacking of News Corps pay-TV rival - Crime - UK - The Independent
5. UK lawmaker urges News Corp TV hacking claims probe - Yahoo!7
6. TV piracy claims heap more pressure on Murdoch empire | Reuters
7. Pressure mounts on Murdoch | The Nation
8. NDS accused in hacker plot that helped sink ITV - FierceCable
9. News Corps NDS accused of ITV Digital hack - Tech News - Digital Spy
10. BBC News - News Corporation firm NDS accused of ITV Digital hack
11. News Corp firm is accused of sabotaging rival - Telegraph
12. News Corp embroiled in NDS hacking claim News C21Media
13. BBC: NDS hacked Murdoch rival - Globes
14. Report: News Corp. pirated rivals' cable boxes - Business - World business - msnbc.com
15. News Corp subsidiary accused over rivals collapse - Crime - UK - The Independent
16. News Corp promoted pay TV piracy: report - Business - News - ZDNet Australia
17. News Corp. Denounces BBC TV Report Alleging Smart Card Hacking by NDS - The Hollywood Reporter
18. News Corp subsidiary 'hired hacker to attack rival' - ABC News (Australian Broadcasting Corporation)
19. News Corp 'hacked ONdigital smartcards to undermine rival'
20. NDS accused of aiding piracy against ITV | Radio & Television Business Report
21. News Corp in fresh storm - CNN.com
22. News Corp accused of piracy sabotage | WORLD News
23. Murdoch's News Corp is accused of hacking rival satellite TV firm - The Inquirer
24. News Corp. Pay-TV Software Unit Hacked ITV Cable Cards, BBC Says - Businessweek
25. Now News Corp is accused of bringing down pay-TV rivals 'by hacking codes to allow viewers to watch for free' | Mail Online
26. Murdoch TV empire accused of dirty tricks
27. NDS denies BBC pay-TV hack claims | Advanced Television
28. New Murdoch empire hacking allegations - Business (Australian Broadcasting Corporation)
29. Murdoch cops blast over pay TV pirates
30. BBC News - Q&A;: ITV Digital sabotage claims
31. Pay TV piracy hits Murdoch
32. TV hacking: News Corp strength is its weakness | Advanced Television
33. News Corps' NDS allegedly leaked rival pay TV codes - SlashGear
34. The new hacking scandal: Pay TV: TBIJ
35. Emails appear to show hackers were paid to work on Australian unit - The Irish Times - Wed, Mar 28, 2012
36. News Corp Unit Promoted Piracy Against Rivals -. | Stuff.co.nz
37. Computer-Hacking Allegations Made Against News Corporation - NYTimes.com
38. James Cusick: From Sicily to the US courts - the trail of evidence could hit Murdoch where it hurts - Commentators - Opinion - The Independent
39. News Corp unit promoted piracy against rivals: report
40. AFP: News Corp. accused of Australian piracy plot
41. Pirates raise corporate security fears
42. Scandal at News Corp spreads as Justice Department monitors hacking allegations at European TV subsidiaries | Mail Online
43. Australia's Government Says News Corp Pay TV Piracy Claim Serious | Fox Business
44. Media Probe Points to Likely Piracy Actions by News Corp Operatives - International Business Times
45. Hacking scandal spreads to Murdoch's TV empire - The Times of India
46. Daily Bite: News Corp Firm Accused of TV Sabotage | The Irish Film & Television Network
47. Sally Bercow brags on Twitter how she bought fake TV smart card in pub - Mirror Online
48. AFR links News Corp to pay TV piracy in Australia - mUmBRELLA



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