News Corp in fresh scandal to scuttle pay-TV competition in UK: BBC report

MUMBAI: Even as the dust on phone hacking controversy has hardly settled, another scandal is rocking Rupert Murdoch?s News Corporation that has put the company?s business operations in that country at risk.

According to a BBC documentary, a company part-owned by News Corporation carried out hacking by obtaining codes belonging to ITV Digital and posted them to allow viewers to watch for free which finally led to the demise of Sky?s main digital TV rivals ITV Digital.

Lee Gibling, who had set up a website The House of Ill-Compute or Thoic in 1990s, said News Corp-owned NDS had funded expansion of the Thoic site and later had him distribute the set-top pay-TV codes of rival ITV Digital.

ITV Digital?s former chief technical officer, Simon Dore, told the programme that piracy was the killer blow for the business. "The business had its issues aside from the piracy... 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,? he stated.

NDS, which was recently acquired by Cisco for $5 billion, though denied the allegation by saying that Thoic was legitimately used to gather intelligence on hackers while Gibling worked as a consultant. NDS manufactures smartcards for all News Corp pay-TV companies across the world.

Incidentally, James Murdoch was the non-executive director of NDS when the scandal took place. However, BBC did not find any evidence of his involvement. The Junior Murdoch had recently stepped down from all posts of controversy-ridden News International, the UK publishing business of the company.

The company?s justification notwithstanding, Gibling has said that although Thoic was in his name the website actually belonged to NDS, which according to Gibling was also used to defeat the electronic countermeasures that the ITV used to try to stop the piracy.

Furthermore, the new codes created by ITV Digital were also sent out to other piracy websites so that consumers don?t buy even a single card.

"We wanted people to be able to update these cards themselves, we didn?t want them buying a single card and then finding they couldn?t get channels. We wanted them to stay and keep with On Digital, flogging it until it broke,? Gibling revealed further.

No sooner did the allegations surface calls for probe started growing louder with Tom Watson, a member of parliament and who has been examining the phone-hacking scandal, being the leading voice.

"Clearly allegations of TV hacking are far more serious than phone hacking," he said. "It seems inconceivable that they (Ofcom) would not want to look at these new allegations. Ofcom are now applying the fit and proper person test to Rupert and James Murdoch. It also seems inconceivable to me that if these allegations are true that Rupert Murdoch and James Murdoch will pass that test."

Already, television regulator Ofcom is scrutinising whether James Murdoch and News Corporation are "fit and proper" persons to be in control of BSkyB, the company that runs Sky TV.