Three Arrested For Conspiring To Violate the DMCA

jtcm writes "Three men have been charged with conspiring to violate the Digital Millennium Copyright Act after federal investigators found that they allegedly offered a cracker more than $250,000 to assist with breaking Dish Network's satellite TV encryption scheme: '[Jung] Kwak had two co-conspirators secure the services of a cracker and allegedly reimbursed the unidentified person about $8,500 to buy a specialized and expensive microscope used for reverse engineering smart cards. He also allegedly offered the cracker more than $250,000 if he successfully secured a Nagra card's EPROM (eraseable programmable read-only memory), the guts of the chip that is needed to reverse-engineer Dish Network's encryption.' Kwak owns a company known as Viewtech, which imports and sells Viewsat satellite receiver boxes. Dish Network's latest encryption scheme, dubbed Nagra 3, has not yet been cracked by satellite TV pirates."

Comments

Three arrested for conspiring to steal cable

[Anonymous Coward]

More apt headline.

Re:Three arrested for conspiring to steal cable

[Flea of Pain]

Wait wait wait...can someone please explain how the first post to the article was modded redundant? That just doesn't make sense to me...

Re:Three arrested for conspiring to steal cable

[Grishnakh]

Sorry, I don't see anything in the article summary saying that at all. They were simply attempting to reverse-engineer a way to receive and decrypt DishTV's signals, and presumably to sell equipment to do this to other people.

So first, no one is "stealing" anything, as stealing means to deprive someone of something by theft. People watching DishTV aren't stealing anything, though they are violating the DMCA law.

And second, there's no proof these men were going to watch unpaid-for programming themselves; they were going to sell the means of doing so to other people.

So your BS headline is much like saying radar detector companies are conspiring to exceed speed limits. It really doesn't make much sense.

I agree with the feds on this one

[seekret]

Serves them right, while I'm against the DMCA trying to profit off of someone else's work is not right. They deserve what they get.

Re:I agree with the feds on this one

[vertinox]

Serves them right, while I'm against the DMCA trying to profit off of someone else's work is not right. They deserve what they get

Sounds like entrapment to me.

(I posted this link because it sounds like the Feds did to the cracker the same thing they did to Mr. DeLorean)

Re:I agree with the feds on this one

[vertinox]

My bad. I read the summary backwards. It sounded like the FBI offered Kwak the money.

But I got modded up so I guess other people read it wrong too.

Re:I agree with the feds on this one

[geekoid]

Breaking encryption should never be a crime.

The satellite companies ahve a very weak business model. It involves sending information into everyoens house. If consumers find another way to view the data in their house, then tough tits for the satellite company.

Re:I agree with the feds on this one

[Animaether]

If consumers find another way to view the data in their house, then tough tits for the satellite company.

If businesses then go and market that way in the form of hacked decoder boxes... still 'tough tits' for the satellite company? In your legal frame of mind, I mean; it's obviously 'tough tits' for them in practice anyway and they have to introduce the next generation of encoding (or a different key.. whatever).

Re:I agree with the feds on this one

[whisper_jeff]

And if I find a way to get into your car that you parked on a public street and drive it away, tough tits for you.

Or would that be a crime?

Yeah. I thought so.

Re:I agree with the feds on this one

[iamhigh]

So by your thinking, it's "tough tits" for the cable company if I steal cable from my neighbor? If I find a way to hack cellular communication and use it for free calling? If I hack into a company that uses wifi?

Re:I agree with the feds on this one

[fishbowl]

>And if I find a way to get into your car that you parked on a public street and drive it away, tough tits for you.

What if I find a way to make use of the constant stream of cars that you put in my living room?

Re:I agree with the feds on this one

[Tanktalus]

Bad analogy. If I take his car that he parked on a public street, he is out a car. If I decode the signal broadcast into my house and view it, the satellite provider still has just as much signal as before, and their paying customers are not out anything. (I could argue that because I could then join in on water-cooler discussions on our favourite TV shows that it increases the value of the product they're marketing, but that's an extremely weak argument which I won't actually make.)

If you send out floppies with your software to everyone in a neighbourhood, and I reformat my floppy and use it for other purposes, that's tough tits for you. If you send out fliers that I subsequently rip up and make paper mache from, that's tough tits for you. If you broadcast something into my home uninvited, and I find a way to make use of that broadcast, that's tough tits for you.

There has to be a working business model here somewhere. I just don't think the current one is the right one. After all, it's far more trivial for the user to buy the official equipment than to build it themselves. And that's been true for many things: radios, TVs, computers, CB radios, HAM radios (I think - never looked into these). Still is true. Those who want to do it themselves? Cost of doing business, my friend. Compete with them like a grown capitalist.

Re:I agree with the feds on this one

[Anonymous Coward]

So by your thinking, it's "tough tits" for the cable company if I steal cable from my neighbor? If I find a way to hack cellular communication and use it for free calling? If I hack into a company that uses wifi?

I basically agree with you, however... I think the GP is trying to make the argument that the satellite company is spamming his private property with their signals (without his permission).

Here is my question to you: if satellite signal is not encrypted, should the broadcasting company be allowed to come after you if you pull down the signals from the air? You don't have a subscription, and you don't have a license to view the content. I think it would fall under the same morally-ambiguous area as unsecured wireless access points. I think that the circumvention is the only notable issue in this case.

Re:I agree with the feds on this one

[Anonymous Coward]

If businesses then go and market that way in the form of hacked decoder boxes... still 'tough tits' for the satellite company?

Yeah, unless the sat companies can figure out how to quit irradiated me with their signals, 'tough tits' to them for me using something they forced in against my will. I'd consider it reimbursement for my increased risk of cancer from sat signals. Thou I don't watch any TV, so I wouldn't do this anyway.

Re:I agree with the feds on this one

[Pandrake]

Breaking encryption should never be a crime.

Agreed.

The satellite companies ahve a very weak business model. It involves sending information into everyoens house.

Then what could be a stronger business model that delivers information (television signal, both satellite and non-satellite) into homes in a manner that is cheaper than competitors which doesn't involve encryption so that people cannot receive their service for free and offer their service to consumers as a competitor just as (or only a little more than) free?

If consumers find another way to view the data in their house, then tough tits for the satellite company.

I'm think'n the chip inside the receiver needs to be covered in epoxy, like the Nintendo game cubes used to to. You're not breaking the law trying to decrypt the chip, but you are breaking the chip - which simply prevents people from stealing the service and making it extremely difficult to decrypt the signal by any other means (which is the whole point of selling the receiver with encryption in the first place). What's your idea? Other than to let all delivery of TV signals slip into an unsustainable business model of "free for all" ideology, of course.

Re:I agree with the feds on this one

[ChaosDiscord]

That would be true, if they were an idiot. Fortunately I don't think the grandparent poster is an idiot.

Hacking into a wifi signal goes beyond decrypting a data stream. You are at that point sending data with the intention of having a remote computer (for the access point is indeed a little computer) and having it do work for you. You are now making use of someone else's property without their permission. Worse, if they're using even a lame 64-bit WEP, they have clearly indicated that you are not welcome to us it, a sort of digital "No Trespassing" sign, so you can't claim it was accidental.

Cell phones are similar, although with an interesting twist: you're not going to be able to make a phone call without some phone's identity. And whoever paid for that phone's identity is going to get hit with the charges for your calls. In essence, you're engaging in fraud against someone else, making charges in their name. We don't need special phone crime laws to deal with this, basic fraud (specifically identity "theft") covers it fine.

Now, this does suggest that you're free to quietly snoop on other people's wifi and cell phones. One can take an ethical stand that puts the onus of securing one's wireless communications on the transmitter and receiver, not the government and third parties. Or put another way, one might say, "Feel free to snoop on my wifi. I use a secure VPN."

Splicing into the cable companies lines is a different case. If the cable doesn't enter your property, you've engaged in trespass and tampering with someone else's property. But we'll be generous and assume the cable crosses your property; it's common enough. While the land is yours, the physical cable itself is not. In much the same way that if I park in my local grocery store's lot, they have no right to siphon some gas out of my tank, you have no right to cut or otherwise modify their cable.

Now, if you were to engage in some cleverness to read the signal off the cable without harming the cable, I think you'd see some support from those arguing the "tough tits" case.

(In all of these cases I'm ignoring what is actually legal, since I believe the point is to argue what is ethical, and thus what the law should be, not what it is today.)

Proprietary algorithms

[BigHungryJoe]

Is there a reason that Dish Network can't use an open algorithm and some open, established encryption 'scheme'? Wouldn't that actually be more secure? And cheaper to develop?

Re:Proprietary algorithms

[Idiot with a gun]

Depends on the algorithm involved. Often one way algorithms rely on certain actions being computably inconvenient, not impossible. ElGamel and RSA basically break down to the idea that it's easier to multiply really big primes, than it is to factor the resulting really big composite. But in an embedded situation like a dish network box, they might not have the computational power to outrun a hacker with a desktop, so a bit of obscurity helps in slowing down any attacks. There's a strong chance that it'll be hacked at some point, as witnessed by the fact that they're on Nagra 3, not Nagra 1, but the hope is to hold off any attacks as possible, and make attacks prohibitively expensive.

Re:Proprietary algorithms

[BigHungryJoe]

I get it, so it's about how they secure the key, not really about the algorithm used.

Re:Proprietary algorithms

[ivan256]

A satellite broadcaster has, for the most part, a one-way stream. If the encryption was completely open, all you would need to do to pirate the signal is to share a valid key with as many people as you'd like.

Paying customers need to be able to decrypt the stream, but they are not trustworthy credential holders.

Re:Proprietary algorithms

[fuzzyfuzzyfungus]

It could be that the proprietary algorithm makes things weaker(certainly wouldn't be the first time); but it is also possible that the algorithm wasn't the issue. Any DRM system, no matter the algorithm, consists of giving the device the key(so that actual subscribers can play whatever the material is) while ordering the hardware to keep the key away from them. This is true whether the key is to some crap proprietary algorithm, or the finest in vetted standards. If you attack the hardware cleverly enough, you can get the key from a given piece of hardware. (whether or not a single key is of much use is another question, and does come back to the quality of the design)

Good

[whisper_jeff]

I'm (very) rarely a fan of the DMCA but, in my opinion, this is a good example of why it was set up - to stop commercial abuse of IP. These guys were knowingly circumventing copyright protection methods in an effort to make a profit. These exact situations are what needs to be stopped, not the teenager posting a mashup on youtube...

I have mixed feelings about this.

[Zombie Ryushu]

I consider the DMCA to be one of the most unjust and cruel laws the USA has. I sympathize with the people doing this to the following limited extent: If you are a subscriber to a service, you should be able to use any compatible QAM enabled equipment you wish.

This is a little different because people who violate the DMCA like this usually are doing so to secure their fair use rights. These people just wanted to outright steal the service. So thats bad. However, two things.

Why are police involved in this sort of thing? Well, really, although in theory, violating the DMCA is a civil action, but around 2003, the government decided that all copyright infringement was criminal. Because the Intellectual property 'scam' is all that the US has against the Chinese, the US has decided to criminalize copyright infringement to create laws to fight the Chinese with.

The DMCA needs to be repealed, but I don't see that happening unless there are large demonstrations. People are generally too stupid to care. (I really would like to see anti-DMCA slogans with people marching by the millions.)

Re:Wait

[tsm_sf]

This statute is used to prosecute conspiracy to commit a federal crime

I know this has been used to put serious criminals away, and is probably a great tool in preventing crime, but prosecuting for conspiracy is still a nasty idea. I think that if I had to describe the boundary between acceptable government behavior and police state, it would be right after this.

Crime depends on who you are...

[gillbates]

I'm thinking that if a security researcher had done the same thing, he would not be in jail. Nor would a large corporation.

But a set top box importer does it, and suddenly it's a federal crime.

The most troublesome part about this is that engineers routinely reverse engineer the work of others for the sake of creating compatible products - an exemption the DMCA explicitly allows. Perhaps the company wanted to offer a cheaper STB to Dish, and undercut the competition. Or perhaps they planned to sell directly to the black market, engaging in fraud. The act of reverse engineering a component tells us nothing about the company's intentions.

I mention this because this very thing was done to Lexmark printers a few years ago. Instead of getting arrested, the manufacturer of competing cartridges was sued under the DMCA; the case went all the way to the SCOTUS, and Lexmark lost. It would appear this would set precedent regarding the legality of reverse engineering for the sake of creating interoperable products, but strangely, the FBI seems not to follow precedent. I find it odd that an activity which was legal and sanctioned by the DMCA - and even supported by the Supreme Court, is now interpreted as being illegal according to the very same law.

If anything, this shows the illegality of an action depends more upon who you are than what you do. Best not to offend our corporate overlords, lest they have the FBI arrest you.

Re:Whiskey Tango Foxtrot...

[DaveV1.0]

This is not for interoperability. The goal of this operation was to create smart cards that allowed people to view channels they did not pay for and to allow people who do not have an account to view the channels. The goal was to facilitate theft of service, not interoperability.

I disagree with the Feds on this one, 100%

[Jane Q. Public]

The sole purpose of the DMCA Act and its friends was to protect certain particular corporate interests. While you may say that copyright infringers "deserve what they get", the fact is that there are perfeclty legal uses for a device that unscrambles encrypted signals... like time-shifting, for example. Why should you be forced to buy or lease a "DirecTV-approved" DVR, for example, when they would be cheaper on a competitive market?

When you have competitive markets, you see lower costs, and improved technology. Sure, it leads to companies having their encryption broken, and being forced to re-invent the wheel... which they should be doing anyway. In the long run, it drives improvements in the market and technology.

The DMCA is detrimental to the economy. The DMCA works to stifle innovation, in AMERICAN markets and for AMERICAN products.

Protectionist policies, like this one, are seldom a good idea. The free market always did better.

I am not blaming enforcement for enforcing the law, but it's a bad law. A very bad law.

Re:I disagree with the Feds on this one, 100%

[seekret]

You are missing my point. I am against them trying to make a profit off of someone else's services. If they were just cracking the encryption for fair use acts (what most of us here consider fair use I mean) then I wouldn't care. But these guys were doing this in order to sell it to people who just didn't want to pay for the television service. If they didn't want to pay for the television service they should just get an internet connection and use the LEGALLY available free streaming sites such as Hulu or Joost etc... I am in full agreement that the DMCA is a violation of individual rights, but I think these guys need to be punished for whatever legal term is used to describe the selling of someone else's services without their permission.

Re:I disagree with the Feds on this one, 100%

[Actually, I do RTFA]

Protectionist policies, like this one, are seldom a good idea. The free market always did better.

Ummm... 1929? Market failure in farmland ownership/food growth, massive bank failures due to poor loans?

Re:I disagree with the Feds on this one, 100%

[Jane Q. Public]

I do not agree.

That is to say, of course I agree that satellite makes good competition for cable, especially in the rural areas. What I don't agree on is whether the DMCA is or was necessary to keep the satellite companies around.

Back in the day, not so long ago, when it was not very difficult to bypass the scrambling of a satellite signal, only a small fraction of customers were actually doing so. There were even articles in mainstream electronics magazines on how to unscramble satellite... yet the number of people doing it remained at a tiny percentage. Yet even that small percentage made the satellite companies furious.

Yet they continued to grow and be very profitable. Unscrambling did not stop them or even slow them down. Dishes and receivers continued to get cheaper. And satellite programming slowly but steadily continued to get more expensive (just like cable).

I am not convinced that unscramblers harmed the satellite companies in any significant way. Now, they did have to do research... I remember for example when the Videocypher systems were replaced with Videocypher IIs. The satellite companies were trying to beat those darned hackers. And for the most part they kept ahead of the game. The number of people cracking the system were kept small, the satellite companies still continued to profit and grow, and satellite programs still slowly but steadily continued to get more expensive...

Personally, I believe that the reverse-engineers kept the industry on its toes, and HELPED, rather than hindered, its progress.

What has the DMCA done for the consumer? It is just as illegal to unscramble a cable signal as it is to unscramble a satellite signal. Now you are forced to buy equipment that is all "compatible" with a particular version of the satellite company's hardware (your DVR, for instance). You have to pay their prices for it. You do NOT have a choice. Today you can't for example, just get one kind of DVR and use it with either cable or satellite... you need a different one for each. You can't use one kind of unscrambler (adapter box) with either cable or satellite... you should be able to use a satellite receiver, and a separate decoder for both. But no. Duplication of hardware, and replication of similar technologies, all the way around.

How is this efficient? How has that kept prices down? Hint: it hasn't.

So now we have had some perfectly legal and very educational hobbies (building descrambler projects for fun) turned into crimes... and our prices are NOT lower, our products are NOT cheaper, our products do NOT interoperate...

The free market did it better.

Re:I disagree with the Feds on this one, 100%

[torkus]

You clearly have no idea how heavily regulated the banking/finance sector is. The problem is more like the unregulated tidbits swimming among the sea of regulation. Of COURSE those tidbits will get the focus of greedy market manipulators.

The finance sector, if it was actually unregulated, should not be lawless either. Introducing general laws around open disclosure, honest accounting, direct responsibility, etc. would go much further towards fixing out financial system. Unfortunately that means companies would have to be more honest and THAT means less profit. Less profit means shareholders suffer - not the 'i have 50k or 250k invested' people but the 'my 3 portfolios total 350million or we manage 20billion in portfolios' who have direct lines to politicians, lawmakers, judges and so on. It's not tin-hat conspiracy, it's people using the means available to protect their own and not caring who else it hurts.

Re:Sounds like my friend

[Anonymous Coward]

you will never be an executive...

Compaq wouldn't exist

[Anonymous Coward]

To make the first PC clones, Compaq publicly hired 30 systems engineers to reverse engineer the IBM BIOS chip... so what was that, high treason compared to this?

Except

[Snaller]

"If you broadcast something into my home uninvited, and I find a way to make use of that broadcast, that's tough tits for you."

No - by living where you do you accept the law - if you don't you can get out of the country, or they'll throw the book at you - and then its tough tits for you in jail.