The BBC has picked up the gauntlet that News Corp CEO Rupert Murdoch threw down this week when his company charged that the broadcaster used manipulated emails in a critical documentary broadcast on Monday. A BBC1 show, Panorama, said that News Corp and a video software and content security provider it has controlled, NDS, illegally helped to sabotage Murdoch’s pay TV rivals. ”We stand by the Panorama investigation,” the BBC says in a statement. The emails cited in the program “were not manipulated, as NDS claims” and nothing in the company’s letter to the BBC demanding a retraction “undermines the evidence presented in the program.” Panorama and a separate report by the Australian Financial Review revived this week long-simmering allegations that NDS helped to crack encryption codes used by satellite and pay TV companies that competed with Murdoch-controlled services including UK’s Sky. The data found its way to the Internet, enabling consumers to easily pirate the TV services — and undermine the businesses. For example, the BBC show reported that security codes for ITV’s ONdigital TV smart cards were hacked as far back as 1998 contributing to its demise in 2002.
News Corp is fighting to disprove fresh charges that a video software and content security provider it has controlled, NDS, illegally helped to undermine Rupert Murdoch’s business rivals. News Corp COO Chase Carey said tonight that a BBC1 show that revived the allegations in a report on Monday “presented manipulated and mischaracterized emails to produce unfair and baseless accusations.” NDS chief Abe Peled demanded a retraction saying that the investigation that ran on the program Panorama showed “flagrant disregard to the BBC’s broadcasting code, misleading viewers and inciting widespread misreporting.” The allegations come at a sensitive time: They feed into the investigations into phone hacking and bribery at News Corp’s UK tabloids. Also, this month Cisco agreed to pay $4B for NDS. News Corp currently owns 49% of the firm.
There’s more controversy facing Rupert Murdoch’s News Corp, this time in Oz. After what it said was a 4-year investigation, The Australian Financial Review on Wednesday published a sample of over 14,000 internal emails from NDS -– the video software and content security firm in which News Corp holds a 49% stake and which is being sold to Cisco in a $5B deal. The Australian newspaper said the emails were from the hard drive of a former UK police commander, Ray Adams, who was once head of operational security for NDS in Europe. The report alleges the emails show that a secret NDS unit damaged News Corp rivals Austar, Optus and Foxtel by encouraging pirating of the companies. “NDS sabotaged business rivals, fabricated legal actions and obtained telephone records illegally,” the newspaper said. The piracy, says the report, cost the companies up to $50 million a year. Foxtel, in which News Corp is a shareholder, is now in the process of acquiring Austar. (The Australian competition authority will decide imminently whether that deal can go ahead.) A spokeswoman for the police in Australia told The New York Times she could not immediately confirm whether a criminal investigation had been opened over the allegations in the Financial Review report. News Corp’s Australian arm News Limited said, “The story is full of factual inaccuracies, flawed references, fanciful conclusions and baseless accusations which have been disproved in overseas courts,” according to Reuters. The allegations by the Australian paper follow
BBC1 promised that an investigative report tonight in its program Panorama would reveal “fresh hacking allegations striking at the heart of News Corporation’s pay-TV empire.” It was originally tipped to harken back to 2002: Canal Plus filed a lawsuit claiming that NDS – the video software and content security firm in which Rupert Murdoch’s News Corp currently holds a 49% stake — “spent large amounts of money and resources” to intercept security codes used on TV smart cards by Canal’s former Italian subsidiary Telepiu. But the bulk of the show centered on ITV, the UK rival of News Corp’s Sky. Security codes for ITV’s ONdigital TV smart cards were hacked as far back as 1998, the BBC show reported. Vital data to unlock the service’s encryption process then appeared on a website, The House Of Ill Compute, whose founder, Lee Gibling, claims he was paid by NDS as a consultant. The codes, according to the show, were then easily accessible to various and sundry, thus undercutting ITV’s business. The former chief technical officer of ONdigital, Simon Dore, told Panorama “The business had its issues aside from the piracy … but those issues I believe would have been solvable by careful and good management. The real killer, the hole beneath the water line, was the piracy. We couldn’t recover from that.” ITV Digital went under in 2002.