An extensive report in today's Australian Financial Review claims that a secret operation inside News Corporation, part owner of Foxtel in Australia and BSkyB in the UK, promoted pay TV piracy.
Why, with News Corp's extensive interest in pay TV companies across four continents, would the company seek to promote pay TV piracy?
The answer is complex and multifaceted.
On the one hand, pay TV piracy, it's alleged, was used to undermine the financial position of News Corp's competitors, either sending them bust or allowing News Corp to buy said competitors at significantly reduced prices. The AFR attributes at least some of the blame for ITV Digital's collapse in the UK at the feet of piracy.
Another part of the story is that NDS, a News Corp subsidiary that Cisco intends to acquire for US$5 billion, is one of four major makers of smart cards used in pay TV boxes.
It was within NDS that an operational unit was initially set-up to combat piracy of the cards it produced. In time, the report states, its role broadened to include helping hackers compromise the security of its smart card rivals.
In addition to the bigger corporate goals listed above, this activity allowed NDS to displace its rivals as the smart card vendor of choice both within the News Corp pay TV empire and without.
You can read a blow-by-blow account, including emails, of how News Corp and NDS allegedly facilitated pay TV smart-card hacking via websites and forums that it funded, dealt with its rivals in both the pay TV and smart-card sectors, and turned in various hackers at opportune moments.