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Television Media

Behind the Satellite Piracy Lawsuit 87

Posted by michael from the spy-v.-spy dept.
McSpew writes "This article at MSNBC is the most in-depth coverage I've seen from a mainstream news source about the $1 Billion Canal Plus lawsuit against Rupert Murdoch-owned NDS. For those not familiar with the suit, French direct-broadcast satellite (DBS) company Canal Plus alleges that NDS, a company owned by News Corp (which also owns BSkyB--Canal Plus's biggest competitor in Europe) hacked the smart cards used by Canal Plus and published the hacks on the Internet. Included in the article are conspiracy theories, a suspicious death and a look at the shady characters working for both sides." We had a previous story about this.
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Behind the Satellite Piracy Lawsuit More

Behind the Satellite Piracy Lawsuit

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  • I admit it, I am the one who broke the cards so that I could stay up and watch porn. Are you all happy now?
  • Somebody call in Austin Powers, a new Dr. Evil has emerged (Rupert Murdoch)! Hurry, before he creates a Mini-Me, and an angst-ridden son, Scott!

  • What are we going to do tonight Rupert? (Score:5, Funny)

    by bobdown2001 ( 528975 ) on Friday May 31, 2002 @08:02AM (#3616487) Homepage
    Same thing we do everynight Pinky.......Try to take over the worlds media!
  • Didn't this kind of thing happen in James Bond: Tomorrow Never Dies? So does that mean that a stealth boat will start a war between Afghanistan and the US?
    • No, it mean that Rupert Murdoch should follow the most important rule of business - That's to give what the public wants.

  • 'Encouraged Piracy' (Score:5, Insightful)

    by Thomas M Hughes ( 463951 ) on Friday May 31, 2002 @08:11AM (#3616522)
    From the article:

    There's also a long-standing notion that piracy is good for the business. In an odd twist, tacitly allowing people to watch pirated TV is a way to gain market share, since many pirates eventually give in and convert to paying customers.

    I hadn't expected to hear that on MSNBC. In fact, I'm led to wonder if the 'higher ups' even know of this policy. The management of media companies seem to be more prone to saying things like "Ad skipping is theft!" "Napster costs us billions each year." etc, etc. One really has to wonder why big media is really cracking down on piracy, if they have people in their ranks who have been encouraging pirates all along.

    • Re:'Encouraged Piracy' (Score:2, Insightful)

      by jcoy42 ( 412359 )
      The management of media companies seem to be more prone to saying things like "Ad skipping is theft!" "Napster costs us billions each year." etc, etc.

      It's to guilt people into paying, and it works. That's why pirates eventually become paying customers.

      In general, the only pirates they are after are the ones profiting from it- they could care less about the little guys. Giving away free samples has always been a way to broaden the market share long term.

    • Re:'Encouraged Piracy' (Score:5, Insightful)

      by liquidsin ( 398151 ) on Friday May 31, 2002 @08:49AM (#3616716) Homepage
      Probably because making such a stink about it brings it to the attention of your average joe. I'm sure a lot of people didn't know about napster until it was all over the media for being evil. Wave it under their noses, show them it's there, then when they get hooked on the free stuff, take it away and they'll pay for your product to get it. Kind of like how a drug dealer works...

    • Re:'Encouraged Piracy' (Score:3, Interesting)

      by elgecko ( 540562 )
      There's also a long-standing notion that piracy is good for the business. In an odd twist, tacitly allowing people to watch pirated TV is a way to gain market share, since many pirates eventually give in and convert to paying customers.
      I hadn't expected to hear that on MSNBC. In fact, I'm led to wonder if the 'higher ups' even know of this policy.

      Of course they do. Back a few years ago when there were three office application suites that all had a decent market share for PC's (being WordPerfect, Lotus and MSOffice), Micro$oft released it's Office97 suite, and also offered $5-$10 try out that were nearly identical to the full suite, with exception of a 90-day expiration. This expiration was extremely easy for crackers to break (I believe as simple as altering a single byte), and downloadable patches were on the Internet within a day of the Office97 release.

      This cheap way to obtain the full suite for a few dollars, rather than paying for the more expensive and better protected competitors suites destroyed their market shares and in a matter of months Micro$oft have over 95% of all office application users utilizing their own software. By the '2000' release of their office suite, the copy protection was now nearly uncrackable, but they'd already secured their monopoly. Users, no longer trained in other suites, were stuck in using whatever Micro$oft provided.

      The MS part of MSNBC knows all to well the value of piracy in gaining initial pirated users who become paying customers later.
      • It could be said that Netscape's lax policy on piracy of their browser was what forced Microsoft to offer IE for free. This is the big dirty secret of all IP. Give it away for free to gain marketshare, then when the competition is dead, squeeze the users for cash.

        To be fair, MS has not turned around and started to charge for IE. But since it's bundled with the OS, it effectively DOES make them money. And it's not just the browser market they're trying to dominate. It's the web standards mindshare. That market's still not tied up.

  • Yeah, right..... (Score:3, Interesting)

    by BenJeremy ( 181303 ) on Friday May 31, 2002 @08:14AM (#3616530)
    So if I give people my competitor's service away FREE it somehow increases my own?

    Unlikely.

    • Re:Yeah, right..... (Score:4, Insightful)

      by JoshMKiV ( 548790 ) on Friday May 31, 2002 @08:18AM (#3616551) Homepage Journal
      No, but it can help bring them down, reduce revenues, and allow you to be in a better position. However, I think the number of people that would steal TV would not have a huge impact.

      I think the biggest impact would be the compromised system requiring replacement, which can be big $$$.
    • Sure, you take a short term hit, but the idea is to drive your competitor out of business - after all, they can't afford to pump out all those channels if no one is paying for them.
    • The point is that by releasing a hack for a competing smart card, especially if it is timed properly, you can hurt their negotiations with a satellite provider giving you the edge. Quick example if smart card company A and smart card company B are both vying for a contract for TV satellite provider Q and a hack for smart card company A comes out during a critical stage during negotiations then smart card company B has a decisive edge. Smart card companies need contracts in order to sell cards. Once they have the contract it might even be favorable to leak hacks for their cards, at the right time, in order to sell more cards. They could also take this as an opportunity to show how quickly they respond to hacking. It never hurts if you know how and when the attack comes. It gives you great chance to respond. This can increase your perceived value to the satellite providers.
    • no, but the lack of revenue will hurt the competition in the long run..

  • Piracy and Trespassing (Score:3, Insightful)

    by swordboy ( 472941 ) on Friday May 31, 2002 @08:16AM (#3616538) Journal
    Hey - it is my property. I didn't give you permission to blanket it with satellite TV. I'll use your service unless you keep you damned dirty broadcasts out of my land!
  • This looks an awful lot like the plot from "Weapons of Mass Distraction," with Ben Kingsley and Gabriel Byrne.

    Great movie, albeit completely depressing, as the two media moguls don't back down from their feud until they've utterly destroyed the lives of their own families.

  • Canadian "Grey" market not so grey anymore (Score:5, Informative)

    by Dark Nexus ( 172808 ) on Friday May 31, 2002 @08:18AM (#3616549)
    One thing about the piracy in Canada that the article fails to mention:

    While the signals have been ruled public domain (and thus don't need to be payed for) since the American providers do not have a broadcast licensce in Canada, it HAS been ruled illegal to sell the equipment for those services.

    Best reference to this I could find can be found here [yahoo.com].

    Short version:

    Illegal to buy, but legal to use.
    • is it illegal to buy, or illegal to posses?
      so If I went and made such equipment, or if it was given to me as a gift?
      • Well..

        After digging a bit more, I've hit some conflicting information on usage - from saying it's OK, to it's illegal, to not mentioning it at all.

        But it has been made illegal to buy/sell the equipment in Canada.

        Well, for now. They're still in court.
        • > > illegal to buy, or illegal to posses? so If I went and made such equipment, or if it was given to me as a gift?
          >
          > [conflicting information on usage] But it has been made illegal to buy/sell the equipment in Canada.

          The original question was probably along the lines of: "Is it legal to download plans, PIC code, purchase discrete components, burn your own PICs, mount the components on a PCB, and hook it up to a TV?", and "Is it legal for a builder to give away such devices?"

          Personally, I'd like to see the answer to those questions be "yes", with a ban on commercial manufacture/sales.

          I think one of the coolest things that could happen would be for a complete design to "leak" its way onto the 'net. I've got no ethical problems with a guy building his own gear to l33ch TV. I do have an ethical problem with a guy who has the plans, refuses to share, and charges $500 for a p1r4t3 box.

          Paying a satellite company for service is giving a media company money for s scarcity that's only somewhat artificial. (On one hand, the signal's landing in everyone's backyard. On the other hand, someone spent $MEGABUX to launch the sats that provide the datastreams, so there's a high barrier to entry. Launch your own damn satellite if you don't like his ;-)

          But paying a DBS pirate reseller for devices based on plans and code developed through reverse engineering is merely buying into another artificial scarcity -- except that the reseller of h4x0r3d cards has a very low investment, and is thus price-gouging.

          The guy cracking DBS may be a genius, but the guy in the back room selling cards has no such mad sk1llz. He's just taking advantage of the fact that the code for the cards isn't widely-available on the 'net. In that sense, he's very much like the RIAA or MPAA exec; his business model is all about a device that costs him next to nothing to reproduce, and charging you for code he didn't write. His existence depends on making sure nobody else can get the code to burn their own PICs. It's not just an artificial scarcity, it's the definition of an artificial scarcity.

          If you continued to aggressively pursue the illegal sale of these boxes, but passed a law that explicitly permitted both the reverse-engineering of such datastreams and the free-as-in-beer downloading of plans and code, you could eliminate the commercial DBS piracy market in a month.

          The market would then come down to two people: (1) People who choose to pay money to a DBS provider for service, or (2) people with a few less scruples who choose to pay in time/effort keeping up with the engineering arms race for service.

          Is that as good for the DBS providers as a market where everyone who views, pays their share of the freight for the expenses involved in putting the sats aloft? No.

          Is it better than the current situation, where we still have slightly-unscrupulous people who choose to pirate, but who, in doing so, support a line of highly unscrupulous people (i.e. whose livelihoods are based on hoarding the reverse-engineered secrets?) IMNSHO, yes.

          • >The market would then come down to two people: (1) People who choose to pay money to a DBS provider for service, or (2) people with a few less scruples who choose to pay in time/effort keeping up with the engineering arms race for service.

            The funny thing is most people who build those devices for themselves were never interested in purchasing TV anyways (you'll find a lot of them have BUDs out back ;-)
            • My BUD sits proudly out front of my house just waiting for the RCMP to come raid me for my illegal activities, I also purchase programming from HBO and Starz for it, which according to some in Canada makes me a criminal.

              Frankly, I don't care what they think, if they ever did bust down the door to see what I'm watching on TV I will likely be exiting this country shortly thereafter, for somewhere else as I feel my freedoms are too restricted if the government decides what I can and cannot watch on television.
    • The NY Times had a very good article [nytimes.com] depicting this topic 2002/05/09. Here's one good site [cardman.com], selling the blank cards [cardman.com], and the hardware programmers [cardman.com] for them when they get zapped by the sat TV companies, etc. Check out the Usenet groups on this subject, e.g., alt.satellite.tv.crypt [news].

      To sum it up, the techie user can purchase blank cards, shipped to anywhere in the world; buy a card hardware-programmer to reset the card when it gets periodically zapped by the tv companies; you can easily get new programming updates to defeat said electronic zaps/bombs/bullets/pulses via the Web from fellow pirates^Wunathorized users. Oh, originally, blank cards where had by the layman from low-balled Walmart dss receiver [walmart.com] offers. Walmart specials [walmart.com], iow, where had for $100USD+, the cards were ripped out, and the receiver itself was discarded. Read the piece, it'll become clearer.

  • What, is Murdoch up with his evil schemes
    once again? No worries, just make a phonecall
    to the Phoenix foundation and MacGyver will
    take care of it like he always does.
  • I wrote "Couch Wars" more than a year. It's a good introduction to the current world of satellite smartcard hacking.

    http://www.wayner.org/books/f7.pdf [wayner.org]

    You're free to circulate it now because I've turned it into advertising ware for my latest two books Translucent Databases [wayner.org] and Disappearing Cryptography [wayner.org].

    If anyone has thoughts, comments, or suggestions, write me at p3@wayner.org.
  • It is interesting that both Murdoch and the company ERG come from Australia. ERG is a major player in smart card technology, and has big players on baord such as Visa, Amex and MasterCard. I wonder if the blunder, came from down under?
  • YOu know I haven't read such a riveting story in a while. That sounds soooo much like something you'd read out of a book or watch from a movie.

    It's really interesting what has been able to happen and *IF* NDS is responsible for this and the death, the big question is WHY? Why risk everything? I guess they're going on the Risk it all and reap the biggest rewards.

    And the part in the story saying that piracy helps their business and it's now just coming back to haunt them has me very intrigued. We always hear the RIAA complaining about these P2P services when an album comes out waaay before its supposed to be released.

    Come on now, think about it, if you kept better tabs on what you're doing then this won't happen. But it always begs the question in light of this article, is there some truth to this rumour and will we see it come out in this court battle?

    If it does come out, I wonder what this will mean for the other companies that do this.
  • If you're pirating satellite, you're still probably watching the ads!

  • This is what DMCA advocates... (Score:4, Interesting)

    by freeBill ( 3843 ) on Friday May 31, 2002 @08:58AM (#3616785) Homepage
    ...should be concentrating on instead of Napster. A couple of good triple-damages laws, some rigorous enforcement (featuring rewards for turning in corporate hackers, backed by a good witness-protection program), and so elite flying squads kicking in the doors of corporate labs in Israel (those scanning electron microscopes are neither cheap nor easy to hide, and this problem disappears.

    Either that or Newscorp disappears. Either way, a desireable outcome.

  • dr7.com (Score:4, Informative)

    by DrXym ( 126579 ) on Friday May 31, 2002 @09:08AM (#3616849)
    This link [archive.org] might help explore the background of this story.

  • Very US centric article (Score:5, Informative)

    by alistair ( 31390 ) <(moc.padltoh) (ta) (riatsila)> on Friday May 31, 2002 @09:10AM (#3616859)
    This is a debate which has been raging in Europe, and especially in the UK for a number of months. Here in the UK, On Digital, later ITV digital, were in direct competition with Rupert Murdoch's SKY satellite services. Yet the suspicion was that millions were being lost by ITV digital by the sale of pirate smart cards, which by the end of the service could be picked up at most car boot sales for about ten pounds, yet would unlock all the premium rate channels for the service. Normally these guys sell dodgy 3rd generation videos, so how did they mange to crack technology which was equivelant in security to the triple DES algorithm?. The following articles from The Guardian offer more information.

    How codebreakers cracked the secrets of the smart card [guardian.co.uk] and Murdoch security chief linked to TV piracy site [guardian.co.uk].

    The Guardian is a left leading broadsheet in the UK which carries influence beyond its half million (UK) circulation figure. Yet it even devoted an editorial to this subject whcih can be read here;

    Breaking the code - Piracy on the digital airwaves [guardian.co.uk].
  • So NDS is owned by the Flash?
  • There's a little something else about this that's fishy.

    In the UK there are/were four prominent pay-television services:

    • Sky Digital
    • ntl:digital
    • Telewest Broadband
    • (now deceased) ITV Digital (formerly onDigital)

    ITV Digital shut up shop [bbc.co.uk] recently due to financial problems most people have attributed to their overinvestment in football broadcasting rights (my personal belief, having been an ITV Digital customer at one point) is that there was simply a lack of choice of good channels, but that's irrelevant).

    Fundamentally, it's worth noting that SECA, the system employed by Canal Plus is also the same system that was employed by onDigital - as noted in this Google cache of Hackwatch [google.com]. Cracks relevant to Canal Plus were also relevant to onDigital.

    In the UK Sky Digital employ the OpenTV system as opposed to SECA. Companies who also follow in this vein are ntl:digital and Telewest Broadband.

    This all poses some interesting questions.

    • And lets not forget the same Rupert Murdoch has just been allowed to bid for one of the five *main* channels in the UK (channel 5).

      Kind of offtopic but the most interesting question posed to me by the whole UK digital TV fiasco is what the hell happened to non-subscription digital TV?

      I remember all the hype about how they're planning on closing down non-digital terrestrial transmissions and move everyone onto digital reception (by 2005 was it?). Apparently in Scotland they recently started to advertise a digital decoder without smartcards but the only ones I can see on sale in the UK are subscription based deals.

      There were quite a few extra digital channels that were non-subscription (there are even more now itv digital has gone under) so why is nobody selling a normal digital decoder box to watch them? It seems to me the only people with access to these channels are people who paid for ITV/ondigital boxes. Or is it just because I don't live in London or Manchester that we can't buy them.

      It's also annoying how my friends in Holland get to watch bbc news 24 for free whereas I pay for it (tv license fees) and can't see it except in a 2" square at 2fps via their website (and I have to pay British Telecom for this pleasure).

      Is digital TV going to help define ripoff Britain? I really hope not.
      • > what the hell happened to non-subscription digital TV?

        There were mutterings regarding the BBC trying to take on the licenses [bbc.co.uk] for digital broadcasting that onDigital/ITV Digital once held. I'm guessing this has something to do with limited throughput on a single multiplex.

        All of this appears to have been delayed [bbc.co.uk] however, whilst the Broadcasting Commission wait to see if anyone else is interested in purchasing those licences.

        This doesn't, however, get around the fact that we still have to pay TV licence fees.

        > and can't see it except in a 2" square at 2fps via their website

        On the subject of BBC News 24 - I still have my onDigital box. After cancellation ITV Digital said they'd come and collect it, but failed to turn up. The BBC channels are still coming through fine - including News 24. If you have an onDigital box anywhere and want to use it, it's still available for you.

        • "All of this appears to have been delayed however, whilst the Broadcasting Commission wait to see if anyone else is interested in purchasing those licences."

          ahh, waiting for ****echelon auto-munge**** to cough up the backhander eh ;)

          On the subject of BBC News 24 - I still have my onDigital box.

          yeah this is what I was getting at. The channels are being broadcast but unless you brought an ondigital box you can't actually see them. I was under the impression that the all the UK TV transmission was moving onto digital to free up bandwidth for mobile phone companies. So why can't I find a digital decoder anywhere except with a monthly subscription fee?

          I may just be ranting pointlessly, I do live in the South-West so it may be that digital decoders are on sale but not here yet. Any other UK'ers seen a non-ITV/onDigial box on sale?

          I kinda suspect that we're gonna end up having to pay the BBC's license fee's and a subscription fee to some digital provider just to get any TV.
      • You can now pick up decoder units for around £100 from places like Currys and Comet. There appear to be 2 separate manufacturers making these; Pace and someone else. These only went on sale during the past month or so.

        Additionally there are new televisions available with in-built DV3 digital decoders that will also pick up all free-to-air channels.

  • Included in the article are conspiracy theories, a suspicious death and a look at the shady characters working for both sides.

    ah... the staple of most fun stories that don't go anywhere. I stopped watching X-Files a coupla years ago when it became apparent that there wasn't really much of a coherent larger story being told. Still, post-partum fans who go in for that sort of thing can use this satellite story as a fix, I suppose.

  • Doesn't Murdoch own Fox?

    Isn't Fox one of the major proponents of Digital Copy protection and CBDTPA?

    http://bpdg.blogs.eff.org/

    Things that make you go hmmm....

  • To wit, who should I despise more? Rupert Murdoch? Or the French?
  • From the article, this is being heard in Federal court in San Francisco. NDS is a UK company, Canal+ is French, and Nagra is Swiss. So, why is this in a US Federal court? Granted, DirecTV and Echostar are US companies, but they are not involved in the suit... yet.
  • If they use a crackable device, they cant scream blody murder when somebody manages to crack it.
    There is a reason why we have PKI and PGP.
    Use the crypto Luke!
    bruj0

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