MURDOCH'S PIRATES,
by Neil Chenoweth, Allen
& Unwin, 402pp.
Reviewed: December 2012
If you believe that democracy and private enterprise are, on the whole, better systems than others for the delivery of human welfare, it is always chilling to read how self-destructive uncontrolled capitalism can be.
A decade ago, Rupert Murdoch's News Corporation mobilised high-tech intelligence resources against its competitors in the global PayTV business. Financial journalist Neil Chenoweth has hounded News Corporation for many years, and this latest chronicle of misdeeds reads like a spy novel. But the combatants
work for private corporations, not states.
There are no innocent parties, only winners and losers, in a world where
law is seen as a tool and business ethics are for wimps. And because it is true, the story raises
serious questions over the ability of national governments to provide a
business environment in which rule of law can be taken seriously.
The competition was for control of the credit-card sized smart cards that give access to
satellite PayTV. The security of those
cards is the key to billions of dollars in PayTV revenues. Since the inception of pay television, independent
hackers and organized pirate rings have repeatedly broken the codes to provide
unauthorized access via a black market in forged smart cards.
PayTV companies fought
back to defend their revenues, but then used the same capabilities to attack their competitors. News
Corporation's card
security development company - News Datacomm (later NDS), was based in Israel
NDS infiltrated the internet chatrooms where
hackers would boast about their achievements, developed contacts, and recruited
agents. They employed former police
detectives and intelligence operatives for many nationalities, including a
former head of Scotland Yard’s criminal intelligence bureau. These agents used their contacts with state
agencies, bugged phones, burgled homes, set traps, and employed every device
familiar to readers of crime fiction – with apparent disdain for the law. In the heat of it, some star European and
American hackers seem to have been double agents, triple agents, or simply
playing all sides for as long as they could.
Eventually two competitors, Canal+ and the US Echostar system,
sued NDS for sabotaging their security codes. The claims were for hundreds of millions in
lost revenue, let alone any share price implications or criminal liability. News Corporation had twenty lawyers in the California
Tales like this explain why democracy is in decline in the developing world. When high principle in Western societies is so undermined by corruption and political pragmatism, why should leaders of less stable societies behave any differently? We can learn more about realpolitik by reading 16th Century European histories than by believing the speeches of venal "democrats".
Richard
Thwaites was working on broadcasting policy issues while Australia
