sublyme2
February 7th, 2003, 01:40 AM
From the February 2003 issue, BC Business Magazine (http://www.bcbusinessmagazine.com/displayArticle.php?artId=265)
Subterfuge, espionage and genius … the multi-billion-dollar theft of TV satellite signals.
By John Pifer
They may not wear eye patches or wield swords whilst shouting “Avast Mateys” as their forerunners of centuries ago did, but there are some new swashbuckling pirates across North America whose haul is far greater than any legendary ship’s bounty. These buccaneers wear three-piece business suits, or loll about in tatty T-shirts and mangy sweatpants in front of home computers as they devote their time and energy to stealing something considered to be far more valuable than gold doubloons – satellite television signals.
In a 500-plus-channel universe, their thievery has mushroomed into a multi-billion-dollar underground business that involves sophisticated subterfuge, flashes of computer genius, corporate espionage, and a modified cat-and-mouse, David vs Goliath ‘game’ between the pirates and the big business interests that want them wiped out. The legal providers, such as Bell ExpressVu and DirecTV in Canada, maintain they are being cheated out of millions of dollars (in the U.S., it is billions) for stolen specialty-channels service, especially hardcore pornography and pay-per-view events, while some key hackers make millions by supplying – for a fee – the next generation of illegal-access methods.
The growth in piracy, and the bandits’ ability to crack any code, any system designed to end their access has prompted everything from police raids in various Canadian cities – Montreal, Toronto, Winnipeg, Kingston, Regina, Saskatoon and elsewhere, where illegal decoding equipment and computers were seized – to lawsuits against those who sell the encryption codes or decoder cards, apparently in order to make examples of a few, seeking to deter or to intimidate the many. Civil lawsuits against alleged hackers in Canada and the United States have been filed by DirecTV, which also took the unusual step last fall of sending threatening letters to thousands of consumers whose names showed up on data recovered from hackers who had been busted or sued. They were told to pay $4,500 to DirecTV to avoid being charged; some have complied, others are suing or waiting it out.
On the other side of the coin – and the law – are some very serious hackers who have found ways around every attempt by the satellite providers to shut them down and who do not consider their work to be particularly criminal. In the early days of taking a serious run at the piracy, Bell ExpressVu or DirecTV and other companies that were establishing and expanding their markets would simply issue new encryption cards to their paying customers, making pirated versions obsolete. Then, on the night of January 21, 2001, (aka Black Sunday), DirecTV Inc. and NDS Group PLC, its security arm, deactivated (or ‘zapped’, as the hackers call it) the vast majority of illegal access cards across North America, rendering them worthless.
Two days later, DirecTV sent out another electronic countermeasure (ECM) to zap any cards that might have survived as operational; and their main competitor, EchoStar Communications Group, fired off its largest-ever ECM to nail users of illegally-modified DISH Network cards. The companies’ executives were ecstatic, believing they had broken the back of the illegal trade.
Wrong.
Hackers began ‘auxing’ – making auxiliary cards from the zapped H cards and running them in an ‘emulation’ setup powered by old 486-vintage computers. The pirates are constantly monitoring and experimenting with new ways to sustain their banditry. In fact, in the two years since Black Sunday, more North Americans now are cheating with stolen satellite signals than were doing so on that infamous night. Every ECM that has been developed has been matched or bettered by the hackers who then sell their new codes for about $20 a month, and most of them are impervious to ECMs.
Hacker Mike Scott of Maple Ridge (obviously not his real name due to the nature of his work) explains: “The ECM blitz just made us more determined to show them they could not stop us, and they can’t.” A happily-married father of four, the former electronics service man devotes full time to his piracy ‘hobby’ now, and to supplying – for a fee, of course – an extensive list of ‘clients’ with the latest technical advances to combat the satellite companies’ ever-expanding efforts to stop the practice of being robbed daily, as they view it.
‘Scott’ says the sophistication has grown to the point whereby computer circuit boards were created in conjunction with decoder cards to fool the satellite receivers into sending video and audio feeds to what they believed were legitimate customers. The hacking has spawned its own Internet range of sites devoted to piracy in one form or the other, too – from the Direct Satellite Service sites such as dsstester.com or dssHideaway.com and dssMafia.com, where advertisers such as Sureshot Satellite Descramblers tout their ability to FedEx their product overnight to the (illegal) user. There also is Decoder News, as well as an individualized network of hackers, complete with chat rooms or ‘forums’, where they share information about ways around every new company bid to zap them out of business. Code names abound, naturally, but the technical information and experimentation is as good as any legitimate IT centre.
Estimates of the number of hacker websites begin at 500 and spin off into the thousands, even to hacker websites that rate other hackers’ sites, 100 at a time, reports Satellite Business News. Dozens of free sites boast of having 20,000 to 30,000 members, while paid sites (about $100 a year) brag of membership lists of more than 100,000.
Scott says the main satellite providers have even hired some of these hackers, setting a thief to catch a thief, so to speak. He believes the pirates have taken that in stride, too, and will readily rise to any challenge to beat any new generation of legitimate access cards or other methods. “Sure, it is illegal, and I make a few bucks from it. But the thrill is in beating the system, in developing the ability to take anything they throw at us and overcome or override it. It’s like this continent-wide video game, taking it to the next level, and the next and the next. “I love it,” ‘Scott’ enthuses from the comfort of his new, lush $2,000 leather reclining lounge chair.
He acknowledges that there is a darker side to the hacking of the digital satellite material, in which some pirates tape pay-per-view pornography channels and then sell the cassettes in bars, at flea markets and anywhere they can find a customer. Some sports bars in Canada and in the U.S. have been busted for stealing pro-sports pay-per-view signals, or transmission of games that are blacked out in their markets. Theft of satellite security cards themselves has become a prize objective for thieves, too, with well-organized raids on warehouses and other facilities where the material has been stored. Often the receivers are left untouched, the access cards being the prime objective.
Until recently, other than considerable coverage of Black Sunday, mainstream media have devoted little effort or resources to examining just how massive the satellite-piracy industry has grown to become across North America. An April 26, 2002 decision in the Supreme Court against foreign broadcasting was covered, of course, but there has been little follow up in the nine months since. That court ruling stated that receiving a foreign encrypted signal from anyone other than a national licenced provider was unlawful. It also labelled as ‘contraband’ any devices used to acquire such signals.
It may come as no surprise in this increasingly litigious world that the Canadian court ruling is being called a violation of citizens’ rights as enshrined in the Canadian Charter of Rights and Freedoms. Website dsstester.com is championing a Charter challenge on the issue and is spearheading a fundraising effort to finance that challenge. In one November rant, the website posted an appeal for more funds (LegalRights.org) while raising the spectre of Canada as an Orwellian 1984 police state if the April ruling is not overturned. Its anonymous writer put his/her argument this way, as a “wake-up call” to Canadians: “Our country, which prides itself on multiculturalism, freedoms of speech and opinion, and religious freedoms, opted to institute the same law that countries [such as] China and Cuba now hold, regarding foreign broadcasting.”
That Charter challenge has received little, if any, major news coverage; but there may be changes afoot as the whole satellite piracy issue continues to escalate.
In the United States, for example, Canada has come in for some harsh criticism on this issue. In December 2002, USA Today, in a front-page report, lifted the veil a little, to reveal that at least one million, and possibly as many as three million households in the U.S., were stealing specialty, porno and sports channels and pay-per-view programs, while approximately 19 million paying customers for DirecTV and EchoStar were shelling out monthly fees for the same access.
And at the heart of writer David Lieberman’s report was a clear condemnation of Canada’s role in the whole affair. “Canada helped to build a marketplace for pirates,” he wrote. “For years, Canadians had several incentives to unscramble DirecTV and EchoStar, without paying. They didn’t have many authorized alternatives, [and] the country’s own satellite services were slow to launch.” Lieberman says it was unclear until that April 2002 Supreme Court of Canada decision whether our anti-piracy laws covered the U.S. companies because they were not authorized to serve the Great White North
According to DirecTV, that ruling, which found the anti-piracy laws did apply, made a big difference and turned the tide against hackers. According to the hackers, it is business as usual.
In November the CRTC announced that satellite TV piracy was “a nationwide epidemic,” with more than 700,000 homes north of the border getting the signals either through setting up a false U.S. billing address (a “grey market” according to the CRTC), or through the black-market hacking into the satellite providers’ signals using illegal decoder cards.
CRTC chairman Charles Dalfen called for “a concerted effort from all players in the industry, all enforcement agencies and all branches of government to see that the law is enforced, and intellectual properties protected.” Dalfen maintained that signal theft was imposing a massive cost on the nation – with more than $400 million lost to the broadcasting industry alone, thus resulting in the loss of jobs, let alone stealing money from intellectual-property holders. Add to that the fact that cable and satellite carriers contribute a percentage of their revenue to a domestic film and TV production fund, and the illegal business means millions of more dollars that could be used for Canadian filmmakers are also lost.
Perhaps the most intensive and accurate examination of the piracy has been the investigation by Satellite Business News, which found that in the U.S. alone: the two principal providers were losing $120 million in gross revenue per month; hackers had as much knowledge of the companies’ security systems as the firms themselves; there is “an enormous subculture of consumers who view stealing [the signals] as both a hobby and a path to obtaining ‘free TV’,”; and serious questions are being raised about whether secure access cards have found their way to hackers because of a lack of due diligence by the companies, its vendors and customers – a polite way of saying spies were at work.
Indeed, corporate espionage is part of the mix of lawsuits, investigations, allegations and exhortations that swirl around the satellite TV piracy, beginning with a bright young American computer hacker with an alleged Canadian connection. Satellite Business News describes Christopher Tarnovsky, a former pirate, as a central figure in a civil lawsuit and a U.S. Justice Department investigation in California, where reports of espionage are turning into a PR and legal nightmare for Rupert Murdoch’s News Corporation.
News offshoot NDS, one of the satellite industry’s top anti-piracy firms, hired Tarnovsky in 1997, a move that appeared to backfire on the company, which received 31 subpoenas from the U.S. Justice Department in October 2002. Their investigation is to determine whether Tarnovsky (who had a fake identity at NDS to avoid detection by his former hacker colleagues) continued his pirating ways after being hired. NDS rivals claim Tarnovsky continued to filter information to websites frequented by cyber hackers, enabling TV thieves to create false smart cards and, ultimately, to access pay TV free.
The corporate spy received his early training in computer technology in the United States Army, where he had top-secret clearance as a satellite communications specialist in the mid-1990s while posted in Europe. Before joining NDS, Tarnovsky was reported to have been a programmer for Canadian counterfeiter Ron Ereiser, who openly sold bogus smart cards that allowed users to bypass satellite TV providers and access the service for nothing.
There is no reason to believe that such intrigue and espionage is any different here in Canada, but some editorialists are wondering if pursuing the pirates at all is a reasonable use of the RCMP’s resources, especially considering Canadian Security Intelligence Service reports that more than 50 terrorist groups could be operating in Canada, including the infamous al-Qaida, Islamic Jihad, Hezbollah and others.
In an editorial in the Windsor Star, after those aforementioned raids across the country, the newspaper stated that the sale of illegal satellite dishes and equipment “is not an issue of national security for the country.” It added that there was no pressing need for the RCMP “to waste time, manpower and money tracking down all of the illegal satellite suppliers – and possibly users – in Canada.
“The RCMP should be using as much time as possible to heavily monitor and crack down on the activities of the suspected terrorist groups that are operating [here]. Instead of spending time locating the so-called satellite pirates who are supposedly ‘terrorizing’ our airwaves. The RCMP must fully concentrate its efforts on finding the real terrorists.”
Mike Scott applauds that, of course, as his fellow hackers no doubt would. It is unlikely the satellite companies with their claims of losing billions are likely to subscribe to the paper’s point of view. They want the pirates to be viewed as thieves, not heralded as the swashbuckling adventurers of yore, or as slick spies who would put James Bond to shame.
Subterfuge, espionage and genius … the multi-billion-dollar theft of TV satellite signals.
By John Pifer
They may not wear eye patches or wield swords whilst shouting “Avast Mateys” as their forerunners of centuries ago did, but there are some new swashbuckling pirates across North America whose haul is far greater than any legendary ship’s bounty. These buccaneers wear three-piece business suits, or loll about in tatty T-shirts and mangy sweatpants in front of home computers as they devote their time and energy to stealing something considered to be far more valuable than gold doubloons – satellite television signals.
In a 500-plus-channel universe, their thievery has mushroomed into a multi-billion-dollar underground business that involves sophisticated subterfuge, flashes of computer genius, corporate espionage, and a modified cat-and-mouse, David vs Goliath ‘game’ between the pirates and the big business interests that want them wiped out. The legal providers, such as Bell ExpressVu and DirecTV in Canada, maintain they are being cheated out of millions of dollars (in the U.S., it is billions) for stolen specialty-channels service, especially hardcore pornography and pay-per-view events, while some key hackers make millions by supplying – for a fee – the next generation of illegal-access methods.
The growth in piracy, and the bandits’ ability to crack any code, any system designed to end their access has prompted everything from police raids in various Canadian cities – Montreal, Toronto, Winnipeg, Kingston, Regina, Saskatoon and elsewhere, where illegal decoding equipment and computers were seized – to lawsuits against those who sell the encryption codes or decoder cards, apparently in order to make examples of a few, seeking to deter or to intimidate the many. Civil lawsuits against alleged hackers in Canada and the United States have been filed by DirecTV, which also took the unusual step last fall of sending threatening letters to thousands of consumers whose names showed up on data recovered from hackers who had been busted or sued. They were told to pay $4,500 to DirecTV to avoid being charged; some have complied, others are suing or waiting it out.
On the other side of the coin – and the law – are some very serious hackers who have found ways around every attempt by the satellite providers to shut them down and who do not consider their work to be particularly criminal. In the early days of taking a serious run at the piracy, Bell ExpressVu or DirecTV and other companies that were establishing and expanding their markets would simply issue new encryption cards to their paying customers, making pirated versions obsolete. Then, on the night of January 21, 2001, (aka Black Sunday), DirecTV Inc. and NDS Group PLC, its security arm, deactivated (or ‘zapped’, as the hackers call it) the vast majority of illegal access cards across North America, rendering them worthless.
Two days later, DirecTV sent out another electronic countermeasure (ECM) to zap any cards that might have survived as operational; and their main competitor, EchoStar Communications Group, fired off its largest-ever ECM to nail users of illegally-modified DISH Network cards. The companies’ executives were ecstatic, believing they had broken the back of the illegal trade.
Wrong.
Hackers began ‘auxing’ – making auxiliary cards from the zapped H cards and running them in an ‘emulation’ setup powered by old 486-vintage computers. The pirates are constantly monitoring and experimenting with new ways to sustain their banditry. In fact, in the two years since Black Sunday, more North Americans now are cheating with stolen satellite signals than were doing so on that infamous night. Every ECM that has been developed has been matched or bettered by the hackers who then sell their new codes for about $20 a month, and most of them are impervious to ECMs.
Hacker Mike Scott of Maple Ridge (obviously not his real name due to the nature of his work) explains: “The ECM blitz just made us more determined to show them they could not stop us, and they can’t.” A happily-married father of four, the former electronics service man devotes full time to his piracy ‘hobby’ now, and to supplying – for a fee, of course – an extensive list of ‘clients’ with the latest technical advances to combat the satellite companies’ ever-expanding efforts to stop the practice of being robbed daily, as they view it.
‘Scott’ says the sophistication has grown to the point whereby computer circuit boards were created in conjunction with decoder cards to fool the satellite receivers into sending video and audio feeds to what they believed were legitimate customers. The hacking has spawned its own Internet range of sites devoted to piracy in one form or the other, too – from the Direct Satellite Service sites such as dsstester.com or dssHideaway.com and dssMafia.com, where advertisers such as Sureshot Satellite Descramblers tout their ability to FedEx their product overnight to the (illegal) user. There also is Decoder News, as well as an individualized network of hackers, complete with chat rooms or ‘forums’, where they share information about ways around every new company bid to zap them out of business. Code names abound, naturally, but the technical information and experimentation is as good as any legitimate IT centre.
Estimates of the number of hacker websites begin at 500 and spin off into the thousands, even to hacker websites that rate other hackers’ sites, 100 at a time, reports Satellite Business News. Dozens of free sites boast of having 20,000 to 30,000 members, while paid sites (about $100 a year) brag of membership lists of more than 100,000.
Scott says the main satellite providers have even hired some of these hackers, setting a thief to catch a thief, so to speak. He believes the pirates have taken that in stride, too, and will readily rise to any challenge to beat any new generation of legitimate access cards or other methods. “Sure, it is illegal, and I make a few bucks from it. But the thrill is in beating the system, in developing the ability to take anything they throw at us and overcome or override it. It’s like this continent-wide video game, taking it to the next level, and the next and the next. “I love it,” ‘Scott’ enthuses from the comfort of his new, lush $2,000 leather reclining lounge chair.
He acknowledges that there is a darker side to the hacking of the digital satellite material, in which some pirates tape pay-per-view pornography channels and then sell the cassettes in bars, at flea markets and anywhere they can find a customer. Some sports bars in Canada and in the U.S. have been busted for stealing pro-sports pay-per-view signals, or transmission of games that are blacked out in their markets. Theft of satellite security cards themselves has become a prize objective for thieves, too, with well-organized raids on warehouses and other facilities where the material has been stored. Often the receivers are left untouched, the access cards being the prime objective.
Until recently, other than considerable coverage of Black Sunday, mainstream media have devoted little effort or resources to examining just how massive the satellite-piracy industry has grown to become across North America. An April 26, 2002 decision in the Supreme Court against foreign broadcasting was covered, of course, but there has been little follow up in the nine months since. That court ruling stated that receiving a foreign encrypted signal from anyone other than a national licenced provider was unlawful. It also labelled as ‘contraband’ any devices used to acquire such signals.
It may come as no surprise in this increasingly litigious world that the Canadian court ruling is being called a violation of citizens’ rights as enshrined in the Canadian Charter of Rights and Freedoms. Website dsstester.com is championing a Charter challenge on the issue and is spearheading a fundraising effort to finance that challenge. In one November rant, the website posted an appeal for more funds (LegalRights.org) while raising the spectre of Canada as an Orwellian 1984 police state if the April ruling is not overturned. Its anonymous writer put his/her argument this way, as a “wake-up call” to Canadians: “Our country, which prides itself on multiculturalism, freedoms of speech and opinion, and religious freedoms, opted to institute the same law that countries [such as] China and Cuba now hold, regarding foreign broadcasting.”
That Charter challenge has received little, if any, major news coverage; but there may be changes afoot as the whole satellite piracy issue continues to escalate.
In the United States, for example, Canada has come in for some harsh criticism on this issue. In December 2002, USA Today, in a front-page report, lifted the veil a little, to reveal that at least one million, and possibly as many as three million households in the U.S., were stealing specialty, porno and sports channels and pay-per-view programs, while approximately 19 million paying customers for DirecTV and EchoStar were shelling out monthly fees for the same access.
And at the heart of writer David Lieberman’s report was a clear condemnation of Canada’s role in the whole affair. “Canada helped to build a marketplace for pirates,” he wrote. “For years, Canadians had several incentives to unscramble DirecTV and EchoStar, without paying. They didn’t have many authorized alternatives, [and] the country’s own satellite services were slow to launch.” Lieberman says it was unclear until that April 2002 Supreme Court of Canada decision whether our anti-piracy laws covered the U.S. companies because they were not authorized to serve the Great White North
According to DirecTV, that ruling, which found the anti-piracy laws did apply, made a big difference and turned the tide against hackers. According to the hackers, it is business as usual.
In November the CRTC announced that satellite TV piracy was “a nationwide epidemic,” with more than 700,000 homes north of the border getting the signals either through setting up a false U.S. billing address (a “grey market” according to the CRTC), or through the black-market hacking into the satellite providers’ signals using illegal decoder cards.
CRTC chairman Charles Dalfen called for “a concerted effort from all players in the industry, all enforcement agencies and all branches of government to see that the law is enforced, and intellectual properties protected.” Dalfen maintained that signal theft was imposing a massive cost on the nation – with more than $400 million lost to the broadcasting industry alone, thus resulting in the loss of jobs, let alone stealing money from intellectual-property holders. Add to that the fact that cable and satellite carriers contribute a percentage of their revenue to a domestic film and TV production fund, and the illegal business means millions of more dollars that could be used for Canadian filmmakers are also lost.
Perhaps the most intensive and accurate examination of the piracy has been the investigation by Satellite Business News, which found that in the U.S. alone: the two principal providers were losing $120 million in gross revenue per month; hackers had as much knowledge of the companies’ security systems as the firms themselves; there is “an enormous subculture of consumers who view stealing [the signals] as both a hobby and a path to obtaining ‘free TV’,”; and serious questions are being raised about whether secure access cards have found their way to hackers because of a lack of due diligence by the companies, its vendors and customers – a polite way of saying spies were at work.
Indeed, corporate espionage is part of the mix of lawsuits, investigations, allegations and exhortations that swirl around the satellite TV piracy, beginning with a bright young American computer hacker with an alleged Canadian connection. Satellite Business News describes Christopher Tarnovsky, a former pirate, as a central figure in a civil lawsuit and a U.S. Justice Department investigation in California, where reports of espionage are turning into a PR and legal nightmare for Rupert Murdoch’s News Corporation.
News offshoot NDS, one of the satellite industry’s top anti-piracy firms, hired Tarnovsky in 1997, a move that appeared to backfire on the company, which received 31 subpoenas from the U.S. Justice Department in October 2002. Their investigation is to determine whether Tarnovsky (who had a fake identity at NDS to avoid detection by his former hacker colleagues) continued his pirating ways after being hired. NDS rivals claim Tarnovsky continued to filter information to websites frequented by cyber hackers, enabling TV thieves to create false smart cards and, ultimately, to access pay TV free.
The corporate spy received his early training in computer technology in the United States Army, where he had top-secret clearance as a satellite communications specialist in the mid-1990s while posted in Europe. Before joining NDS, Tarnovsky was reported to have been a programmer for Canadian counterfeiter Ron Ereiser, who openly sold bogus smart cards that allowed users to bypass satellite TV providers and access the service for nothing.
There is no reason to believe that such intrigue and espionage is any different here in Canada, but some editorialists are wondering if pursuing the pirates at all is a reasonable use of the RCMP’s resources, especially considering Canadian Security Intelligence Service reports that more than 50 terrorist groups could be operating in Canada, including the infamous al-Qaida, Islamic Jihad, Hezbollah and others.
In an editorial in the Windsor Star, after those aforementioned raids across the country, the newspaper stated that the sale of illegal satellite dishes and equipment “is not an issue of national security for the country.” It added that there was no pressing need for the RCMP “to waste time, manpower and money tracking down all of the illegal satellite suppliers – and possibly users – in Canada.
“The RCMP should be using as much time as possible to heavily monitor and crack down on the activities of the suspected terrorist groups that are operating [here]. Instead of spending time locating the so-called satellite pirates who are supposedly ‘terrorizing’ our airwaves. The RCMP must fully concentrate its efforts on finding the real terrorists.”
Mike Scott applauds that, of course, as his fellow hackers no doubt would. It is unlikely the satellite companies with their claims of losing billions are likely to subscribe to the paper’s point of view. They want the pirates to be viewed as thieves, not heralded as the swashbuckling adventurers of yore, or as slick spies who would put James Bond to shame.