Part of Rupert Murdoch's News Corporation empire employed computer hacking to undermine the business of its chief TV rival in Britain, according to evidence due to be broadcast by BBC1's Panorama programme on Monday .
The witnesses allege a software company NDS, owned by News Corp, cracked the smart card codes of rival company ONdigital. ONdigital, owned by the ITV companies Granada and Carlton, eventually went under amid a welter of counterfeiting by pirates, leaving the immensely lucrative pay-TV field clear for Sky.
The allegations, if proved, cast further doubt on whether News Corp meets the "fit and proper" test required to run a broadcaster in Britain. It emerged earlier this month that broadcasting regulator Ofcom has set up a unit called Project Apple to establish whether BSkyB, 39.1% owned by News Corp, meets the test.
Panorama's emails appear to state that ONdigital's secret codes were first cracked by NDS, and then subsequently publicised by the pirate website, called The House of Ill Compute – THOIC for short. According to the programme, the codes were passed to NDS's head of UK security, Ray Adams, a former police officer. NDS made smart cards for Sky. NDS was jointly funded by Sky, which says it never ran NDS.
Lee Gibling, operator of THOIC, says that behind the scenes, he was being paid up to £60,000 a year by Adams, and NDS handed over thousands more to supply him with computer equipment.
He says Adams sent him the ONdigital codes so that other pirates could use them to manufacture thousands of counterfeit smart cards, giving viewers illicit free access to ONdigital, then Sky's chief business rival.
Gibling says he and another NDS employee later destroyed much of the computer evidence with a sledgehammer. After that NDS continued to send him money, he says, until the end of 2008, when he was given a severance payment of £15,000 with a confidentiality clause attached. An expert hacker, Oliver Koermmerling, who cracked the codes in the first place, says on the programme that he, like Gibling, had been recruited on NDS's behalf by Adams....read more