This is one bad case of reporting that will finish up costing someone huge in the law courts…BBC as well as Fairfax in Australia will be at the receiving end of Murdoch’s lawyers. His tweets show he is rubbing his hands with glee at the prospect.
Austar boss John Porter bags AFR piracy claims
- by: Sally Jackson and Darren Davidson
- From: The Australian
- March 30, 2012 12:00AM
Austar United chief executive John Porter has rubbished claims that there was a secret unit in News Corp that promoted a wave of piracy in the 1990s . Picture: Renee Nowytarger Source: Herald Sun
THE chief executive of pay-TV group Austar United has rubbished claims in Fairfax Media’s The Australian Financial Review that a secret unit within Rupert Murdoch’s News Corporation promoted a wave of piracy in Australia in the 1990s that damaged Austar’s finances.
John Porter, who has led Austar since it launched in 1995, said it was also “completely unjustified” to try to draw a connection between those allegations and the $1.9 billion merger under way between Austar and Foxtel, the latter of which is 25 per cent owned by News Corporation subsidiary News Limited.
“From what I can tell, (the AFR story) is built on a series of 14,000-plus emails that somebody is trying to connect the dots on in a way that, in my opinion, is not legitimate,” he said.
Mr Porter’s rebuttal of the AFR report, by journalist Neil Chenoweth, came as News chairman and chief executive Rupert Murdoch, chief operating officer Chase Carey and News Limited chief executive Kim Williams denounced the AFR’s coverage of the media group’s News Datacom Systems unit. The AFR claims that NDS, which News sold to Cisco Systems this month, distributed hacked codes for its competitors’ pay-TV smartcard systems, behaviour the AFR alleged had “devastated News’s competitors”.
Mr Murdoch tweeted: “seems every competitor and enemy piling on with lies and libels”. He said it was “easy to hit back hard”, which the company was “preparing” to do.
Mr Carey said NDS had waged a war against pay-TV theft and copyright infringement and hit back at the BBC’s Panorama program, which also aired piracy allegations in Britain this week, saying it presented “manipulated and mischaracterised emails to produce unfair and baseless accusations”.
NDS executive chairman Abe Peled said the Panorama program, which Chenoweth helped produce, manipulated emails to make them appear to be correspondence generated by NDS when they had been forwarded emails sent to the company.
“Despite your on-air claims, this manipulated email is not evidence of NDS promoting or facilitating piracy,” Mr Peled writes in a letter to Panorama producer Alistair Jackson.
“To the contrary, in its original form, this exchange is clear evidence of NDS’s ongoing anti-piracy activities.”
An NDS spokeswoman confirmed a similar letter is now being drafted by NDS lawyers for the AFR, demanding a retraction.
Mr Peled added that allegations had previously been tested in the US justice system, with the Department of Justice, a federal court jury and a federal appellate court all clearing NDS.
In an email to News Limited’s 10,000 Australian employees yesterday, Mr Williams said the reports were “highly misleading” and urged employees to “consider the motives behind these stories”. News Limited is the publisher of The Australian.
The AFR is uploading to its website more than 14,000 emails it said were recovered from a laptop used by the former European chief of the NDS division Operational Security, who worked for the company between 1996 and 2002.
In a statement, NDS said the emails referred to in the AFR story were submitted in an earlier US court case and NDS had been cleared of any wrongdoing.
It said the emails from a stolen hard drive were submitted as evidence “during that trial and considered by the court that vindicated NDS”.
News said claims the operational security unit reported to the office of Mr Murdoch were “categorically untrue”.
AFR editor-in-chief Michael Stutchbury yesterday stood by the newspaper’s reports and said some of the emails had not been tendered in the US court cases.
Austar initially said it had not been contacted by the AFR before the reports were published. However, it later corrected this and said that a spokesperson had been contacted but had declined to comment.
Mr Porter said that hackers had cracked Austar’s system in 2001 and at that time pirate users accounted for about 5 per cent of its 350,000 subscribers.
“We realised we did have a problem — as did Foxtel — and it took approximately a year and a half to fix it,” he said.
“But it wasn’t material from a financial standpoint.
“It’s the nature of our business that people try to crack our encryption systems.
“We’re constantly trying to stay one step ahead — people at NDS would know that’s the way the system works.
“So for them to hack our system for some commercial advantage — no one in the industry would contemplate that as a tactic, legitimate or otherwise.
“We’ve had over 150 prosecutions for piracy that we’ve been involved with at both state and federal level. We’ve never, ever heard of any involvement by NDS or anyone else for that matter.”
The AFR also alleged that NDS’s activities “assisted News to bid for pay TV businesses at reduced prices including . . . Austar”.
“Somebody’s trying to draw that story but there is no factual connection,” Mr Porter said.
“Foxtel was as damaged as Austar was by piracy in the early days of pay TV. The fact is, neither of us has had our system meaningfully hacked in over a decade so it’s a story that is completely irrelevant to whatever transaction is happening today.”
The Australian Competition & Consumer Commission, which is currently examining Foxtel’s takeover bid for the regional pay TV operator, said it had no comment to make on the allegations.
Mr Porter said the Austar shareholder vote on the bid would go ahead as scheduled today.
“There is no reason for the ACCC to even contemplate this story,” he said.
“I don’t think they believe it’s relevant at all, either, and they’re sticking to the process that is under way.
“They’re very busy administering the Trade Practices Act and not worrying about speculation in the media about events that happened 13 years ago.”
* This article has been updated from the original
THE Australian Financial Review’s claimed expose of pay-TV piracy by a “secret unit” of NewsCorp is a total and embarrassing crock.
It was an exercise in breathless and repetitive – endlessly, endlessly repetitive – sliming that lacked even the most minimal requisite slime, and which damned only one organisation. The AFR and Fairfax Media.
What’s more, even more self-damningly, the AFR admitted as much on its own front page, that it had a crock, on the very same day as it was launching its saturation slimage last Wednesday.
It made the tell-tale admission in a way that should be – that should have been – obvious to any journalist of even the meanest intelligence, even after consuming the requisite diet of ABC-Fairfax anti-NewsCorp Kool-Aid.
The AFR headline screamed “Pay-TV piracy hits News”. Followed by “Secret emails reveal scandal”.
So what would one expect to see on the front page?
Either a tear-out of one of these “secret emails” that were so “revealing.” Or at least a quote from such an email.
Originally posted on Dear Kitty. Some blog:
By Patrick O’Connor:
2 April 2012
Rupert Murdoch’s News Corporation has been accused of orchestrating a global pay television piracy operation that successfully undermined its rival networks in Britain, the US, Europe and Australia.
The allegations were aired last week on the BBC’s “Panorama” program and in a series of articles published by the Australian Financial Review. They follow the phone hacking scandal in Britain that remains the subject of a criminal investigation. The accusations of pay TV piracy are potentially even more damaging to News Corporation. While Murdoch’s newspapers are central to his political power, his international pay TV interests generate the largest and fastest growing component of News Corporation’s profits.
The BBC and Australian Financial Review (AFR) focussed on the activities of NDS (News Datacom Services), an Israeli-based software company owned by News Corporation. In the 1990s, NDS established an “Operational Security” group tasked with ensuring the security of Murdoch’s burgeoning pay TV interests. It aimed to prevent hackers and criminal gangs from cracking the encrypted codes and “smart cards” that are used to allow paying customers access to certain programs and channels.
Part of this work involved NDS recruiting hackers to crack its competitors’ codes and security systems—in itself, not necessarily an illegal activity. NDS employees, however, are alleged to have also distributed the cracked codes on the internet and encouraged the production of illegal smart cards that would allow people to access pay TV networks for free. As a result, it is alleged, News Corporation’s rivals lost enormous revenue streams, forcing several of them into bankruptcy.