The BBC has accused News Corporation company NDS of paying computer hackers to crack and freely distribute keycodes that would allow pirates to clone the pay-TV smartcards of a Sky rival.
BBC Panorama, first screened on the evening of 26 March, claims that the firm, itself a manufacturer of smartcards, hired hacker Lee Gibling to expand his website The House of Ill-Compute (aka THOIC), and discover and post the codes needed to open up pay-TV company On Digital's smartcards to cloning.
On Digital, which later became ITV Digital, was a UK terrestrial pay-TV rival to Sky in the late Nineties. It is believed that the wide distribution of pirated smartcards, which circumvented paid subscriptions, was a major contributory factor in the company's demise.
"The business had its issues aside from the piracy," said ITV Digital's former chief technical officer, Simon Dore, during the programme. "But those issues, I believe, would have been solvable by careful and good management.
"The real killer, the hole beneath the water line, was the piracy. We couldn't recover from that."
NDS, which formerly listed James Murdoch as a non-executive director, denies the claims made by Panorama and Lee Gibling. However, Gibling himself said in the broadcast that he hacked On Digital's smartcard under instruction. "They delivered the actual software to be able to do this, with prior instructions that it should go to the widest possible community," he said.
He also said THOIC was actually an NDS website, not his own. "It was NDS. It was their baby and it started to become more their baby as they fashioned it to their own design."
Sky uses NDS, but denies involvement in THOIC and has no influence on how the smartcard manufacturer is run.
The timing of these new revelations couldn't be worse for Rupert Murdoch's News Corporation. Not only is it still reeling from the phone hacking scandals, but Ofcom is currently examining whether the company is "fit and proper" to be a significant shareholder in BSkyB. It holds a 39 per cent stake in the satellite broadcaster and technology firm.
What do you think? Did NDS take down On Digital? Let us know in the comments below...