NDS faces probe over TV hacking allegations

NDS, the pay TV technology company owned by media tycoon Rupert Murdoch, has been ordered to hand over documents amid allegations that it hacked into competitors’ decoding cards.

The company has been served with 31 grand jury subpoenas in the United States.

Canal Plus Technologies, a subsidiary of Vivendi Universal, had earlier this year accused NDS’ parent group News Corp of hacking its smart cards and publishing details of its pay TV technology on the internet.

CPT claimed it had lost 630 million in revenues as a result of others accessing its decoding information for free.

That case was dropped after News Corp agreed to buy debt-stricken Vivendi’s Italian pay TV unit. A condition of the deal was that the legal case was dropped.

But the row over Middlesex-based NDS has reignited with the serving of the subpoenas.

Two US broadcasters, EchoStar and NagraStar, have now filed lawsuits in San Francisco. The subpoenas ordering NDS to hand over documents are part of a federal criminal investigation into the allegations. NDS denies the allegations and a spokeswoman for the firm said it would co-operate fully with the investigation.

Abe Peled, the chief executive of NDS, said that the fresh allegations by EchoStar and NagraStar were a repetition of Canal Plus’ "groundless lawsuit" and "an attempt to harm NDS and thwart legitimate competition".

Analysts said that the television industry was far more vulnerable to such potential theft because its embrace of digital technology makes it a target for potential hackers and high-tech sabotage.

Investigators were first alerted to NDS in 2000 when one of its engineers, Christopher Tarnovsky, was informed by police that he had received two Canadian-mailed packages.

Court documents allege that one package contained a DVD player that had $20,000 (12,750) hidden inside. The other package contained a CD player that concealed 13,000. Mr Tarnovsky claims he was set up and has so far not been charged, but he remains a key figure in the civil case brought by EchoStar and NagraStar, who allege he broke into their encryption systems and then sent the top-secret codes to digital pirates.

According to papers filed on behalf of the plaintiffs, NDS was on the verge of losing a contract to NagraStar, so it hacked the NagraStar system and encouraged pirates to use it, discouraging customers from switching services.