News That’s Fit To Punt 28/Mar/2012

Please Explain, Rupert

It’s been an ugly few months for the Murdoch media empire, but this might be the moment when they finally take one on the chin without being able to duck. Of course, earlier in the day it was revealed that News Corporation had basically paid hackers to crack their opponents security and then made the hack available to people on pirate sites in order to cripple their competitors. I think Stephen Conroy is right. It’s time to call the police. This isn’t some regular bit of dastardly act that passes for corporate cunning to get ahead. This is a publicly listed company instigating and promoting piracy in order to destroy their competition so as to establish a monopoly.

The main news item can be surveyed here from the AFR who have made it available to the wider public. A really interesting tidbit is in this article:

The Panorama program aired emails that apparently showed that the codes of ONdigital were first cracked by a hacker named Oliver Koermmerling. He told the program he had been hired by NDS’s head of UK security, Ray Adams.

Panorama alleged the codes were publicised by the world’s biggest pirate website, the House of Ill Compute (THOIC).

Lee Gibling, who ran THOIC, said Mr Adams sent him the ONdigital codes so other pirates could use them to make thousands of counterfeit smartcards.
He said he was being paid £60,000 a year by Mr Adams and was given thousands more to buy computer equipment. The site had sent people update codes: ”We wanted them to stay and keep on with ONdigital, flogging it until it broke.”

ONdigital, later renamed ITV Digital, lost more than a £1 billion, and 1500 staff lost their jobs when it collapsed in 2002.

Mr Gibling said he and another employee later destroyed much of the computer evidence by smashing hard drives with a sledgehammer.

News Corp’s lawyers, Allen & Overy, denied the claims even before the program was aired. They told media organisations that the claims NDS ”has been involved in illegal activities designed to cause the collapse of a business rival” would be false and libellous and demanded they not be repeated.

NDS also issued emphatic denials: ”It is simply not true that NDS used the THOIC website to sabotage the commercial interests of ONdigital/ITV digital or, indeed, any rival.”

The company admitted Mr Gibling was in its pay but says it was using THOIC as a legitimate undercover device: ”NDS paid Lee Gibling for his expertise so information from THOIC could be used to trap and catch hackers and pirates.”

Uh, yeah, right. isn’t it schoolyard logic that “He who denied it supplied it”? These denials are looking pretty daft. Let’s say for the moment we let it stand that NDS paid Gibling for his expertise and information. Just what expertise and information would Lee Gibling be offering NDS but hacking information? And what were NDS going to do with this hacking information they paid Lee Gibling for?

The funniest thing today might have been News.com.au which didn’t have a single article on this explosive scandal now embroiling the Murdoch media empire.

This leads me to this item sent to me from Pleiades, penned by Stephen Mayne.

 While there have always been plenty of competitors and journalists who take pot-shots at News Corp, the key to its power has been an ability to keep compliant regulators and politicians on side. That all changed in the UK when everyone turned on News Corp over phone hacking. News of the World was closed, scores of employees have been arrested, the BSkyB mop-up takeover was abandoned and there are now serious prospects the company will be kicked out of Britain in disgrace.

Amazingly, News Corp’s share price has soared ever higher in recent months and jumped another 10c to $19.48 this morning, valuing the company at $US51 billion. The Murdoch family has a debt-free $6.5 billion stake in News Corp and appear to be financially unscathed from the British scandal.

But the family’s biggest single earner over the years has been US programming pumped out through the world’s most lucrative global pay-TV distribution channels. Thanks to Chenoweth’s revelations, there are now serious questions being asked as to whether these have been ill-gotten gains.

As for what happens now, I reckon Chenoweth’s package — there’s more to come — will pick up the Gold Walkley in 2012. The Murdochs will be kicked out of Britain, Foxtel won’t be allowed to buy Austar and Sir Rod Eddington, lead independent director of News Corp, will finally develop some spine and intervene to reduce this notorious family’s control over its unethical media empire.

This stuff makes the hacking scandal look like child’s play. Charges should be laid. They need to arrest these people.

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