News Corp Hacked ITV Digital Out of Business in the UK Pay-TV Wars (Updated)

By Sam Gibbs on at

Blimey, the hacking scandal swirling around News Corp. seems to be getting worse and worse each week. Phone jacking wasn’t the only thing Murdoch’s cronies used hackers for; they also used them to leak digital subscription access codes to Sky's pay-TV competitor ITV Digital, inducing the widespread piracy that forced it out of business.

According to the BBC’s Panorama, News Corp used the satellite security company NDS (which it owned a 50 per cent stake in) to employ a hacking site called The House of Ill Compute (THOIC). The site was ordered to distribute pirated access codes to ITV Digital’s encrypted TV network. NDS was itself a manufacturer of smart cards, which allowed the decrypting of pay-TV channels.

ITV Digital was originally launched as On Digital and relied on smart cards to authenticate subscribers just like Sky and Top-Up TV do now. News Corp leveraged piracy as a way to kill-off the competition, which was apparently “the killer blow” that forced ITV Digital to shut down in 2002.

The BBC’s uncovered emails that showed the passing of hacked codes from NDS to THOIC, actively showing that it knowingly participated in the piracy that brought down Sky’s competition. In fact Lee Gibling, who ran THOIC, said he actually got the software for generating pirated codes from NDS.

"They delivered the actual software to be able to do this, with prior instructions that it should go to the widest possible community."

We all knew News Corp wasn't afraid of a good bit of hacking, but going as far as inducing and spreading pirated access codes to drive his competitors out of business? That’s way lower than even I thought it was capable of stooping. Panorama broadcast last night, but it’s well worth checking out the whole thing on iPlayer. Even though all this happened more than a decade ago, I reckon News Corp is in for a pretty rough ride if this can all be proved by Ofcom. [BBC]

Image credit: Hackers from Shutterstock

Thanks Darrell!

Update: We've been sent a letter that NDS sent to the BBC strongly denying the allegations of hacking. Here it is in full:

Alistair Jackson Panorama
March 29, 2012 Dear Mr. Jackson:

Following an initial review of material used in your program to accuse NDS of promoting and facilitating piracy, it has already become evident that you featured manipulated emails, while in addition completely mischaracterizing the substance and context of others.

You have seriously misconstrued legitimate activities we undertake in the course of running an encryption business. You have used footage to falsely demonstrate your allegation that we sent certain emails externally to facilitate piracy when in fact the email was sent internally as part of our anti-piracy work. You have also taken emails wholly out of context. This has helped paint a picture for your viewers that is incorrect, misleading and deeply damaging to my company and our sister company News Corporation.

We demand that you retract these allegations immediately.

The fact that you relied on manipulated email chains, without checking their authenticity with us prior to broadcast, demonstrates a flagrant disregard to the BBC’s broadcasting code, misleading viewers and inciting widespread misreporting.

For example, an excerpt of one email purports to show an NDS employee sending information about a security key to his NDS colleagues.

The version displayed by Panorama, however, was manipulated to clearly omit the critical designations (denoted by “>”) showing that NDS was merely internally forwarding material that had been sent to it.

Despite your on air claims, this manipulated email is not evidence of NDS promoting or facilitating piracy. To the contrary, in its original form, this exchange is clear evidence of NDS’s ongoing anti-piracy activities. Furthermore, you displayed total flagrant disregard for the true context surrounding emails cited. For example, you purported that an email sent to Ray Adams was evidence of NDS’s encouragement of piracy associated with the website.

That email, however, was sent from an undercover agent at thoic to NDS, not from NDS to thoic. Thoic was a website on which any user could post information. The email, in its original form, cannot reasonably be interpreted as evidence of NDS’s participation in or promotion of piracy. Instead, it is further proof of NDS collecting information from thoic as part of its long-standing fight against piracy.

We understand that manipulated and mischaracterized emails may have been provided to you by a third party, but this does not excuse your ethical and journalistic obligation to present us with your intended allegations prior to broadcast. Nor does it excuse you from telling your audience the truth.

For several weeks, we have repeatedly requested that you identify the factual allegations you intended to make and the information on which you expected to rely. You chose to reject our several requests. Were you to have shared this manipulated and misleading material with us prior to broadcast , we would have shown you that this cache of stolen emails had been obtained and manipulated as part of an ongoing plan by third parties to damage the reputation of NDS, our sister companies, and News Corporation. Frankly, it is outrageous that Panorama has facilitated these actions by third parties to damage our name.

We look forward to your swift response and resolution of this matter. Sincerely,

Abe Peled Executive Chairman NDS Group Ltd.