cloak and dagger in the us of a’s pay-tv arena
Whoever said that one had to be a member of the mafia or the cia in order to dabble in stashing cash inside equipment to avoid detection, clandestine rendezvous, secret codes and pass phrases, certainly didn’t pay the
One would be able to excuse the Californian judge reading papers filed in the case of EchoStar versus NDS for thinking he is reading a spy novel, since that is exactly what it sounds like!
In essence, NDS, partly owned by Rupert Murdoch’s News Corporation group, was the manufacturer of smartcards for an American pay-tv company, who found themselves in a spot of bother when the smartcards were hacked and distributed over the internet, leaving the pay-tv company feeling like the SABC, with the nightmare of thousands of pirate viewers. Without a not-so-clever “it’s the right thing to do campaign”, the pay-tv company was forced to replace all their clients’ smartcards at a cost of several million dollars.
This posed a serious dilemma for NDS, since the pay-tv company started looking around at some other companies to manufacture their smartcards and encryption technology – the main contender of which was involved with EchoStar. In order to tackle this dilemma, NDS (allegedly) went about a campaign to compromise EchoStar’s smartcards and encryption technology.
The (alleged) campaign plays out like a serious spy-novel, in great 007-fashion. NDS (allegedly) recruited some of the hackers who initially hacked the NDS smartcards from
The campaign started to unravel in 2000 when US Customs agents found US$40 000 worth of cash stashed inside electronic equipment such as DVD players and the like, shipped to one of the (alleged) hackers (an engineer on NDS’ payroll) in California from Canada via Texas. Just prior to that, a german hacker, who had been able to get hold of the encryption codes and schematics for the EchoStar system (and who NDS confirmed they offered a job, which he had rejected) disappeared from his home and was later found dead, hanging from a belt in a local park. The death was ruled a suicide, however there was indications of foul play, such as the deceased feet touching the ground when he was found.
EchoStar realised that their smartcards had also been hacked when they met the pay-tv company who wanted to switch from NDS to EchoStar. EchoStar claims that NDS was behind this hack in order to discourage pay-tv companies to switch from NDS to EchoStar.
During all of these events, EchoStar wasn’t the only company faced with hacked smartcards. The French company, Canal Plus, also instituted action against NDS for allegedly hacking its smartcards. This case was eventually dropped when Canal Plus’ holding company and NDS’ holding company struck a deal in Italian pay-tv services, which included a condition that Canal Plus drops its claims against NDS.
On the flip side, NDS is denies all of the allegations and maintained that they were reverse-engineering EchoStar’s smartcards in order to understand their competition without distributing the information. In an email statement to wired.com, NDS declared: “The hacking of EchoStar was the result of inferior technology arising from inadequate investment in research and development by [EchoStar]. NDS, on the other hand, invests heavily in research and development … we reinvested over 30 percent of our revenues into R&D — the result is that we have zero piracy and the platforms of our customers are completely secure.”
Strangely enough, this case has received very little media attention in the
* apologies for the (alleged) in the article – at this stage none of the allegations have been proven in court and since br!ghtshark is no 008, he’d better play it safe at this stage.
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