Murdoch empire faces new scandal, potentially far more damaging

This week's reports claim that News Corp operated a group of former intelligence and security operatives – known as Operational Security (OpSec) – who facilitated high-tech hacking of TV competitors' paid programming during the late 1990s and early 2000s.

The core technology at issue is the satellite TV set-top box. In order for satellite TV broadcasters to control access to their signal, they need to encrypt it so that only sets with corresponding decryption cards can unscramble the broadcast. The broadcasters make their money by selling customers the means to decrypt and access their signals, giving customers the ability to pick up the broadcasts on their set-top boxes. As such, it is critical to broadcasters that their decryption cards remain secure, since a hacked card will let a set-top box pick up any channel the broadcaster offers for free.

According to the reports by the AFR, the Independent, and Panorama, OpSec employed hackers to break the decryption of News Corp's satellite TV rivals and then disseminate the means of decryption to other members of the hacking community. The broader hacking community would then independently use that decryption to create pirate cards which could be sold on the cheap, undercutting the rival broadcasters' market share and thus devaluing their stock.

According to the AFR, News Corp and OpSec used this technique for a variety of purposes, including to drive rivals out of the market and to weaken them enough that News Corp and its subsidiaries could buy them out.

The AFR reports that at the time the hacking was going on, Australia had no effective laws against satellite TV piracy, so none of the hacking would have been illegal under Australian law. Other areas of law that could apply, such as international copyright law, were at a nascent stage at the time of the alleged events, which may preclude criminal charges or civil claims against NDS or News Corp on such grounds.

14,400 newly released emails

The AFR's report appears to be based on a newly released collection of 14,400 emails formerly held by Ray Adams, a former Metropolitan Police commander and top OpSec official in Europe, and other documents that AFR says "show NDS sabotaged business rivals, fabricated legal actions and obtained telephone records illegally." The AFR has published samples of the emails online.

The reports from The Independent and Panorama also appear to be based on evidence previously unseen. The Independent reports that according to documents it has acquired, Italian hacker Pasquale Caiazza – currently on trial for piracy in Italy – was being paid by News International, News Corp's British newspaper arm, to hack and disseminate code for Nagra France's decryption cards.

Much of the Panorama report's evidence comes from hacker Lee Gibling, who told the BBC that he was in the employ of NDS in the late 1990s. 

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