NDS faces fresh claims over cracked pay-TV codes

The UK-based broadcast technology firm NDS has again found itself accused of distributing cracked codes for rivals' pay-TV smartcard systems.NDS, which Cisco is in the process of buying from News Corp and the private equity firm Permira for the sum of £3.

The UK-based broadcast technology firm NDS has again found itself accused of distributing cracked codes for rivals' pay-TV smartcard systems.

NDS, which Cisco is in the process of buying from News Corp and the private equity firm Permira for the sum of £3.2bn, has previously fended off similar allegations in court and continues to deny any such foul play.

However, a BBC Panorama investigation broadcast on Monday appears to have established that, in the late 1990s, the company was actively supplying the codes for ITV Digital — or ONdigital as it was known at the time — to a 'pirate' website that then distributed them widely.

At the time, News Corp had control of NDS, and its broadcast subsidiary Sky was a major customer of the technology firm. ONdigital launched in 1998 as a rival to Sky. According to ITV Digital's former chief technology officer, the struggling business was definitively sunk by people accessing its services for free.

As had already been established at least a decade ago via leaked emails, NDS had links with the hacker site, named The House of Ill Compute (THoIC). However, NDS claimed the links were only there so it could gather intelligence on how hackers operate. NDS maintained it did not know that THoIC was distributing ONdigital's codes.

Now, however, THoIC founder Lee Gibling has told the BBC that NDS provided and actively helped him distribute the codes. "They delivered the actual software to be able to do this, with prior instructions that it should go to the widest possible community," he told Panorama.

"Everything that was in the closed area of Thoic was totally accessed by any of the NDS representatives," Gibling said. "It was NDS. It was their baby and it started to become more their baby as they fashioned it to their own design."

The story comes at an inopportune time for News Corp, which is currently under Ofcom's scrutiny. The regulator has to establish whether James Murdoch and News Corp are "fit and proper" to take over Sky proprietor BskyB, in which it already has a 39 percent stake.

Murdoch was a non-executive director of NDS at the time of the THoIC affair, although no-one has suggested he knew about what was going on.

NDS told ZDNet UK on Tuesday that it "never used or sought to use the THoIC website for any illegal purpose".

"NDS paid Lee Gibling for his expertise so information from THoIC could be used to track and catch hackers and pirates," the company said. "It is simply not true that NDS used the THoIC website to sabotage the commercial interests of ONdigital / ITV Digital or indeed any rival."