Mooley
TK Veteran
This is from the U.S. but some interesting reading. The gangster is getting it from all angles! :
article at msnbcl.com
Pay-TV piracy flap intensifies
EchoStar, DirecTV sue Murdoch firm NDS
By Bob Sullivan msnbc.com
Allegations of corporate-sponsored hacking and espionage by
Rupert Murdoch’s pay-TV software maker NDS have now crossed the Atlantic. In
the past two weeks, both U.S. satellite TV firms EchoStar Communications Corp.
and DirecTV Inc. have initiated legal action against the News Corp. subsidiary,
adding to the legal troubles of NDS which earlier this year was the target of a
$1 billion lawsuit by French pay-TV concern Canal Plus.
IN ITS FILING, EchoStar argued that NDS employees hacked into access cards
made by Nagrastar, a joint venture between EchoStar and Swiss digital broadcast
technology company Kudelski.
It alleged that NDA was trying to make “pirate technology ... intended to
facilitate the reception and decryption of EchoStar’s encrypted
satellite-delivered television programming service by persons not authorized to
receive such programming,” according to legal papers filed Friday in the U.S.
District Court in San Francisco.
In September, DirecTV filed a suit of its own against NDS, alleging
misappropriation of trade secrets, fraud and other violations relating to access
services to DirecTV. The suit was filed under seal in the U.S. District Court in
Los Angeles.
Vivendi Universal’s Canal Plus Technologies sued NDS earlier this year,
alleging that the company intercepted codes embedded in access cards that allow
the satellite TV companies to control what programming its subscribers can see.
The lawsuit by Canal Plus, which is an NDS rival, was temporarily put on hold
when Vivendi Universal announced a deal to sell its Italian pay-TV service
Telepiu to News Corp. Ltd. But even that litigation is now pressing forward,
Canal Plus says.
The lawsuits all center around the issue of access, or smart cards. Smart
cards are the key that unlocks the multi-billion dollar pay-TV industry. The
size of a credit card, smart cards contain the information necessary for viewing
programs on satellite TV networks like DirecTV and EchoStar’s Dish Network.
Pay-TV firms pay millions to develop uncrackable Smart Card technology because
the cards are the only protection they have for their only corporate asset —
customers who will pay for TV subscriptions.
Until recently, NDS made the cards which protected DirecTV, the largest U.S.
pay-TV firm. NDS’ main competitor, Kudelski Group, makes the cards that defend
EchoStar’s DISH NETWORK under the label NagraStar. Canal Plus, meanwhile,
makes its own cards.
At the center of the controversy surrounding NDS is the fact that pirates
have managed to crack the encryption on every one of those systems, and one by
one, word is emerging that the pirated companies are claiming NDS did the
cracking to gain competitive advantages in the marketplace.
The Canal Plus lawsuit, filed in March, came complete with whistleblower
testimony that described what sounded like a made-for-television movie of the
week. Essentially, the French firm accused Murdoch’s company of hacking its
pay-TV smart cards at a secretive lab in Israel. NDS then gave away the hacking
instructions on the Internet to encourage widespread piracy of their competitor’s
service, undermining Canal Plus’ entire business, the lawsuit claims.
Canal Plus threatened to expose much more chicanery in scheduled public
depositions, and in open court. But NDS seemed to have escaped the potential
embarrassment in June when Canal Plus parent Vivendi Universal agreed to drop
the suit as part of a larger deal with News Corp. Struggling Vivendi agreed in
principal to sell its Italian pay-TV business, Telepiu, to News Corp. on June 8
for $900 million, and agreed to drop the Canal Plus piracy lawsuit as a
condition of the deal.
But in August, with the details of the Telepiu deal still up on the air, the
Canal Plus lawsuit got new life, as U.S. District Judge Vaughn Walker declined
to drop the case. Laura Kline, spokesperson for Canal Plus, said this week “we
are moving forward with the lawsuit,” but declined further comment.
And now it looks like the case will go on, even if Canal Plus eventually
backs out. On Friday, EchoStar petitioned to U.S. District Court in Northern
California to join the Canal Plus case. According to the EchoStar’s petition,
it filed the case Friday because it was afraid settlement discussions between
Canal and News Corp would result in destruction of evidence, as “the parties
will destroy the documents and deposition testimony produced thus far.”
The EchoStar case essentially parrots the Canal Plus case, but court
documents provide a few additional details about the secretive, multi-million
dollar pay-TV piracy business. In court documents, EchoStar alleged its smart
card technology was cracked by NDS scientists working at a research lab in
Haifa, Israel. The trick to stealing EchoStar television was then allegedly
given by NDS employee Chris Tarnovsky to Allen Menard, who operated TV piracy
site DR7.com. Menard also allegedly ensured the secret file was given away on
other Web sites, including hitechsat.com and discountsatellite.com, according to
the lawsuit.
NDS declined an interview for this story, but provided a statement that
claims EchoStar joined the lawsuit to deflect attention from its own business
problems to gain leverage for its pending deal with the other U.S. satellite-TV
giant, DirecTV.
“The proposed EchoStar/NagraStar complaint is basically a repetition of
Canal’s groundless lawsuit, which was filed over six months ago,” the
statement said. “If this complaint were really about remedying a wrong done to
EchoStar and NagraStar, it would have been brought sooner.”
But NDS is now fighting a two-front legal battle in the U.S., with EchoStar’s
merger partner DirecTV revealing Sept. 18 it also had sued NDS. The case has
been sealed, so there are few details, but DirecTV indicated in a vague press
release that the case accuses NDS of “breach of contract, fraud, breach of
warranty and misappropriation of trade secrets.”
Earlier this year, DirecTV announced it was terminating a long-standing
relationship with NDS as its Smart Card supplier. At the time, both firms said
publicly the termination had nothing to do with piracy problems. But sources
told MSNBC.com that DirecTV has been frustrated with NDS for some time, and that
NDS employees were barred last year from working on any DirecTV conditional
access systems related to Smart Card production. Another source confirmed that
DirecTV’s relationship with NDS had grown increasingly rocky over recent
years, as DirecTV became more frustrated with NDS’ apparently inability to
keep hackers from stealing signals.
A DirecTV spokesperson said the firm couldn’t comment on the current
litigation because “our complaint is under seal so I can’t speak about the
specific allegations or the context of the suit.”
The various pay-TV firms have a complex, and sometimes bitter, history.
Murdoch, through his media giant News Corp. firm, has spent years trying to buy
his way into the U.S. market. A failed merger with EchoStar was scrapped in
1997. Then last year, Murdoch was set to acquire DirecTV when EchoStar swooped
in with a last-minute bid that trumped News Corp.’s offer.
The proposed EchoStar-DirecTV merger faces an uncertain future, with federal
regulators concerned that it might create a monopoly that would hurt U.S.
satellite TV customers. In its statement, NDS suggested that may have been
another motivation for the EchoStar suit.
“Within the last few days, it was widely reported that two federal agencies
may block EchoStar’s merger with DIRECTV. NDS’s parent company News
Corporation has in the past made several attempts to acquire DIRECTV,” the NDS
statement read. “EchoStar and NagraStar are bringing this lawsuit now in an
obvious attempt to distract attention from the numerous problems of those
involved with EchoStar and NagraStar and to harm NDS.”
article at msnbcl.com
Pay-TV piracy flap intensifies
EchoStar, DirecTV sue Murdoch firm NDS
By Bob Sullivan msnbc.com
Allegations of corporate-sponsored hacking and espionage by
Rupert Murdoch’s pay-TV software maker NDS have now crossed the Atlantic. In
the past two weeks, both U.S. satellite TV firms EchoStar Communications Corp.
and DirecTV Inc. have initiated legal action against the News Corp. subsidiary,
adding to the legal troubles of NDS which earlier this year was the target of a
$1 billion lawsuit by French pay-TV concern Canal Plus.
IN ITS FILING, EchoStar argued that NDS employees hacked into access cards
made by Nagrastar, a joint venture between EchoStar and Swiss digital broadcast
technology company Kudelski.
It alleged that NDA was trying to make “pirate technology ... intended to
facilitate the reception and decryption of EchoStar’s encrypted
satellite-delivered television programming service by persons not authorized to
receive such programming,” according to legal papers filed Friday in the U.S.
District Court in San Francisco.
In September, DirecTV filed a suit of its own against NDS, alleging
misappropriation of trade secrets, fraud and other violations relating to access
services to DirecTV. The suit was filed under seal in the U.S. District Court in
Los Angeles.
Vivendi Universal’s Canal Plus Technologies sued NDS earlier this year,
alleging that the company intercepted codes embedded in access cards that allow
the satellite TV companies to control what programming its subscribers can see.
The lawsuit by Canal Plus, which is an NDS rival, was temporarily put on hold
when Vivendi Universal announced a deal to sell its Italian pay-TV service
Telepiu to News Corp. Ltd. But even that litigation is now pressing forward,
Canal Plus says.
The lawsuits all center around the issue of access, or smart cards. Smart
cards are the key that unlocks the multi-billion dollar pay-TV industry. The
size of a credit card, smart cards contain the information necessary for viewing
programs on satellite TV networks like DirecTV and EchoStar’s Dish Network.
Pay-TV firms pay millions to develop uncrackable Smart Card technology because
the cards are the only protection they have for their only corporate asset —
customers who will pay for TV subscriptions.
Until recently, NDS made the cards which protected DirecTV, the largest U.S.
pay-TV firm. NDS’ main competitor, Kudelski Group, makes the cards that defend
EchoStar’s DISH NETWORK under the label NagraStar. Canal Plus, meanwhile,
makes its own cards.
At the center of the controversy surrounding NDS is the fact that pirates
have managed to crack the encryption on every one of those systems, and one by
one, word is emerging that the pirated companies are claiming NDS did the
cracking to gain competitive advantages in the marketplace.
The Canal Plus lawsuit, filed in March, came complete with whistleblower
testimony that described what sounded like a made-for-television movie of the
week. Essentially, the French firm accused Murdoch’s company of hacking its
pay-TV smart cards at a secretive lab in Israel. NDS then gave away the hacking
instructions on the Internet to encourage widespread piracy of their competitor’s
service, undermining Canal Plus’ entire business, the lawsuit claims.
Canal Plus threatened to expose much more chicanery in scheduled public
depositions, and in open court. But NDS seemed to have escaped the potential
embarrassment in June when Canal Plus parent Vivendi Universal agreed to drop
the suit as part of a larger deal with News Corp. Struggling Vivendi agreed in
principal to sell its Italian pay-TV business, Telepiu, to News Corp. on June 8
for $900 million, and agreed to drop the Canal Plus piracy lawsuit as a
condition of the deal.
But in August, with the details of the Telepiu deal still up on the air, the
Canal Plus lawsuit got new life, as U.S. District Judge Vaughn Walker declined
to drop the case. Laura Kline, spokesperson for Canal Plus, said this week “we
are moving forward with the lawsuit,” but declined further comment.
And now it looks like the case will go on, even if Canal Plus eventually
backs out. On Friday, EchoStar petitioned to U.S. District Court in Northern
California to join the Canal Plus case. According to the EchoStar’s petition,
it filed the case Friday because it was afraid settlement discussions between
Canal and News Corp would result in destruction of evidence, as “the parties
will destroy the documents and deposition testimony produced thus far.”
The EchoStar case essentially parrots the Canal Plus case, but court
documents provide a few additional details about the secretive, multi-million
dollar pay-TV piracy business. In court documents, EchoStar alleged its smart
card technology was cracked by NDS scientists working at a research lab in
Haifa, Israel. The trick to stealing EchoStar television was then allegedly
given by NDS employee Chris Tarnovsky to Allen Menard, who operated TV piracy
site DR7.com. Menard also allegedly ensured the secret file was given away on
other Web sites, including hitechsat.com and discountsatellite.com, according to
the lawsuit.
NDS declined an interview for this story, but provided a statement that
claims EchoStar joined the lawsuit to deflect attention from its own business
problems to gain leverage for its pending deal with the other U.S. satellite-TV
giant, DirecTV.
“The proposed EchoStar/NagraStar complaint is basically a repetition of
Canal’s groundless lawsuit, which was filed over six months ago,” the
statement said. “If this complaint were really about remedying a wrong done to
EchoStar and NagraStar, it would have been brought sooner.”
But NDS is now fighting a two-front legal battle in the U.S., with EchoStar’s
merger partner DirecTV revealing Sept. 18 it also had sued NDS. The case has
been sealed, so there are few details, but DirecTV indicated in a vague press
release that the case accuses NDS of “breach of contract, fraud, breach of
warranty and misappropriation of trade secrets.”
Earlier this year, DirecTV announced it was terminating a long-standing
relationship with NDS as its Smart Card supplier. At the time, both firms said
publicly the termination had nothing to do with piracy problems. But sources
told MSNBC.com that DirecTV has been frustrated with NDS for some time, and that
NDS employees were barred last year from working on any DirecTV conditional
access systems related to Smart Card production. Another source confirmed that
DirecTV’s relationship with NDS had grown increasingly rocky over recent
years, as DirecTV became more frustrated with NDS’ apparently inability to
keep hackers from stealing signals.
A DirecTV spokesperson said the firm couldn’t comment on the current
litigation because “our complaint is under seal so I can’t speak about the
specific allegations or the context of the suit.”
The various pay-TV firms have a complex, and sometimes bitter, history.
Murdoch, through his media giant News Corp. firm, has spent years trying to buy
his way into the U.S. market. A failed merger with EchoStar was scrapped in
1997. Then last year, Murdoch was set to acquire DirecTV when EchoStar swooped
in with a last-minute bid that trumped News Corp.’s offer.
The proposed EchoStar-DirecTV merger faces an uncertain future, with federal
regulators concerned that it might create a monopoly that would hurt U.S.
satellite TV customers. In its statement, NDS suggested that may have been
another motivation for the EchoStar suit.
“Within the last few days, it was widely reported that two federal agencies
may block EchoStar’s merger with DIRECTV. NDS’s parent company News
Corporation has in the past made several attempts to acquire DIRECTV,” the NDS
statement read. “EchoStar and NagraStar are bringing this lawsuit now in an
obvious attempt to distract attention from the numerous problems of those
involved with EchoStar and NagraStar and to harm NDS.”
