Behind the Satellite Piracy Lawsuit

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.

Comments

What are we going to do tonight Rupert?

[bobdown2001]

Same thing we do everynight Pinky.......Try to take over the worlds media!

'Encouraged Piracy'

[Thomas M Hughes]

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'

[liquidsin]

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'

[elgecko]

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.

Yeah, right.....

[BenJeremy]

So if I give people my competitor's service away FREE it somehow increases my own?

Unlikely.

Re:Yeah, right.....

[JoshMKiV]

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 $$$.

Piracy and Trespassing

[swordboy]

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!

Canadian "Grey" market not so grey anymore

[Dark Nexus]

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.

Short version:

Illegal to buy, but legal to use.

Re:Canadian "Grey" market not so grey anymore

[Tackhead]

> > 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.

If you want background, here's an old article.

[peterwayner]

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

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

If anyone has thoughts, comments, or suggestions, write me at p3@wayner.org.

This is what DMCA advocates...

[freeBill]

...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

[DrXym]

This link might help explore the background of this story.

Very US centric article

[alistair]

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 and Murdoch security chief linked to TV piracy site.

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.