The entire decade of Videocipher II piracy never had the publicity which the hack on DSS has had over the last 10 days. Read on for a story of intrigue as a bogus hacker spoofs one of Canada's top newspapers. It appears to be part of a counter-piracy offensive. It is a beautiful piece of work and succeeds admirably in its objectives.
It is January 30 and I have not put the Real Audio files online yet. Sorry. My hard drive crashed. It will be done
over the next couple of days so you can hear the articles and understand what we are talking about.
During the decade of VCII piracy which started in 1986 there was only ever one major article done on the subject and that appeared in WIRED 2.08. The mass media avoided the subject on the grounds that they did not want people to know how easy it was to obtain free satellite delivered programming. Even the satellite trade press found the subject distasteful and glossed over it.
In light of this, it is amazing to see the amount of press coverage given recently to the hack on the DSS digital satellite system. It started with an article in Canada's Financial Post on January 11 titled "Hackers Attack Satellite Firms." The Wall Street Journal did an article called "Crooks Crack Digital Codes of Satellite TV" on January 12. The January 16 issue of the Toronto Star features an interview with one of the "world's leading video pirates." The next day, a follow-up piece entitled "TV Piracy Called Broadcast Threat" appears in the same newspaper.
For those who are interested we will read all the articles and comment on them in the Real Audio portion of this update. You must hear the interview to understand what we are talking about. You may access this by clicking anywhere on the gif of all the articles.
The most interesting articles are the two which appear in the Toronto Star. The interviewed pirate boasts that he made $750,000 selling modified Videocipher II decoders and the direct-to-home dishes offer even more opportunity because he can make hundreds of thousands of dollars. He has made $20,000 tax-free in the past five weeks selling the paddleboard style fix for DSS which permits users to receive more than 100 channels free. The $20,000 is tax-free because he doesn't pay taxes. This gem appears in the first few lines of the article to capture the reader's interest immediately. He later confesses that he lives in fear of being nabbed, especially by the tax man. When his customers' pirate cards were shut off on New Years's eve he reprogrammed them free. Next time he may charge $50. "That's the way it's going to be, he boasted. " "One of the world's top video pirates" operates out of a cluttered office in a small industrial mall somewhere in southern Ontario. He also operates out of the Caribbean. It sounds like Ron MacDonald who was featured in the WIRED article.
The pirate says that regardless of what security measures DirecTV takes,
the hackers will defeat them and the Canadian
DBS startups will
not fare
any better. He even proposes a solution to the problem. "The only way to
stop the hackers is to root them out and lock them up. And that, he confidently
predicted will only happen when Canadian companies seeking a slice of the
action force policy regulators into action. "
When those involved in the DSS piracy business read the quarter page article which included a huge photo of the pirate DSS fix, they were dumbfounded. None of them had done the article. It appears to be part of an anti-piracy offensive. It was probably done by operatives of some of the billion dollar companies which have a stake in the DBS business or by undercover police.
The "Star" reporter must have been amused by "one of the world's top video pirates" who chose him to tell the government and all the people of Canada including Revenue Canada and other taxing authorities, and a variety of Police forces that he makes a very good living by breaking the law, doesn't pay his taxes and the only way to stop him is to jail him. The reporter for the Star is not a complete rube. He asks the pirate why he has consented to do the interview and he responds. "The more publicity this gets, the more people will want the cards. My business will blossom."
The interview successfully accomplishes several goals. It changes the public's perception of satellite pirates. It establishes them as the reason for the inability of Canadian firms to enter the DBS business and it sets a political agenda. It also obfuscates the real reason why Canadian DBS firms are unable to launch their businesses. Canadian programming is terrible and no one wants to watch it.
Canadians have not had a negative image of the DSS pirates. The pirates help people obtain programming to which they are not allowed to subscribe anyway. The only real victims of DSS piracy in Canada might be the monopolistic cable companies. The pirate in the interview changes this image. He is a wealthy, greedy, self-avowed criminal and braggart. He delivers a pirate manifesto. "This is the way it will be," he boasts. We are in control and we don't pay taxes. The public will now find DSS pirates an attractive target for law enforcement which they were not before.
The series of articles in the Toronto Star effectively politicizes DSS piracy in Canada. Otherwise it is a simple Police matter. In the January 12, Wall Street Journal article the president of DirecTV, Eddy Hartenstein said "we're leaps ahead of these guys " when he was asked whether hackers pose a significant financial threat to his company. He said that DirecTV can change security codes via satellite or swap out the cards. When all the pirate DSS cards were shut off on New Year's Eve, DirecTV proved that it can shut them off. It can shut them off again yet it chooses not to. In November, 113 of the pirate cards were seized at the Blaine WA border crossing and they were given to DirecTV for examination. We note that none of the clone masters of those cards have been shut off. Apparently it is in the political interest of DirecTV and DBS startups in Canada to use DSS piracy for their own political purposes rather than end it.
In the follow-up article in the Toronto Star entitled "TV Piracy Called Broadcast Threat" the chairman of Power DirecTV comments on the pirate interview. He candidly states that "we are not prepared to be in this business unless we can harness DirecTV and also compete with cable. " His company wants laws to make it illegal to import DSS systems into Canada. It wants laws against hacking DSS. It wants an end to gray market piracy. An estimated 50-80 thousand Canadians subscribe to DirecTV using bogus U.S. addresses. Traditionally the Canadian government has tolerated this form of piracy. It wants its competition, the DSS pirates eliminated and it wants one more thing. It wants the government of Canada to give it a financial subsidy to help it compete with the cable companies. That subsidy would be derived from the subscribers of those cable companies.
Approximately 50-80,000 Canadian homes subscribe to DirecTV programming. These people have purchased their satellite systems and they pay for the programming they receive. It is expensive, even in U.S. dollars. The Canadian DBS startups want to obsolete those systems and take away those citizens' choice of entertainment suppliers. The interview with the bogus DSS pirate in the Toronto Star was planted to further that goal.
The Extent of DSS Piracy
All the articles on DSS piracy state that there is currently a universe of approximately 5,000 pirate DSS cards. The 5,000 figure comes from Scrambling News. Approximately 1,000 are in the U.S. Part of the marketing strategy on these cards was to keep the quantity low enough so DirecTV would not swap them out. There are roughly 1.3 million subscribed DSS systems at this time. It would cost roughly $15 to swap out each card for a total of $19.5 million, or $3,900 per pirate card. While keeping quantities low, the developers of the fix are keeping the prices high so supply and demand are equal. Currently, the lowest retail prices for pirate DSS cards are in the $650 U.S. range. That price is so high that they really only appeal to individuals who are willing to pay a premium to be pirates. At this time it is more practical to pay for programming than to purchase a fix which could easily be shut off tomorrow. There is a new clone style fix available at a price around $400. More about that after our subscribers have read it.
[Editor : We appreciate it when you tell us about newspaper and other media coverage of video piracy. My E-mail address is dlawson@localnet.com. Your constructive comments and criticism are always welcome.Thankyou.]
It is Tuesday. I will have the real audio up by tomorrow.