Spotlight on allegations that Murdoch firm leaked codes that let viewers tune in for free
The broadcasting watchdog Ofcom is to investigate claims that a subsidiary of Rupert Murdoch's News Corp helped to hasten the demise of one of its British pay-TV rivals through the activities of a piracy website.
The television regulator said yesterday that it would consider "all relevant evidence" after a senior Labour MP called for it to look into allegations by the BBC's Panorama that NDS, a London- based News Corp company specialising in satellite television technology, leaked codes that could have been used to create counterfeit smart cards for the now defunct ITV Digital.
It emerged earlier this month that Ofcom has already stepped up Project Apple, its investigation into whether Mr Murdoch's son, James, is a "fit and proper" person to sit on the board of BSkyB and whether News Corp should be allowed a controlling stake in the satellite broadcaster.
Any evidence that the toxic swirl of allegations of wrongdoing and criminality engulfing Rupert Murdoch's British newspaper business is beginning to taint News Corp's pay-TV operations, including BSkyB, will be particularly unwelcome in a company which has made satellite broadcasting the cornerstone of its global success.
NDS, which is being sold to computing giant Cisco for $5bn, has flatly denied the Panorama claims, describing them as "simply not true". It said: "It is wrong to claim NDS has ever been in possession of any codes for the purpose of promoting hacking or piracy."
Last night, further claims were published by an Australian newspaper alleging that NDS was also facing questions about tactics deployed against News Corp's pay-TV rivals in the country.
At the heart of the latest claims, which focus on the strenuous and expensive efforts of pay-TV companies to maintain the integrity of their encryption systems in a ruthless world of pirates, lies an elite strata of "super-hackers" whose genius was to be able to penetrate security codes which their manufacturers claim to be unbreakable.
The rapid expansion of satellite television in the late 1990s and early 2000s brought with it a shady sub-culture of middlemen and computer whizz- kids, many of them fitting the stereotype of lank- haired teenagers bent over keyboards in their garages, who enjoyed the sport of cracking the codes in the smart cards that customers into their set-top boxes to watch programmes.
Their work enabled a lucrative trade to spring up in illegal, pirated satellite smart cards from Asia to Europe and Australia to America. One such maverick was Oliver Kommerling, a German hacker adept at unlocking encryption cards, including that of Mr Murdoch's Sky TV in 1996.
Mr Kommerling told Panorama that after he targeted Sky TV, he was approached by …