The New York TimesThe New York Times TechnologyMay 9, 2002  

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  Welcome, malak

In Satellite Piracy War, Battles on Many Fronts

(Page 2 of 2)

The access cards are a valuable commodity. One Satan's Playhouse store was held up at gunpoint last year, said the owner, Mr. Dicker. The thieves made off not with cash but with hundreds of satellite cards worth tens of thousands of dollars.

To create the finished product, Canadians have had to look to the United States for the original cards. Last year the Canadians found a new source across the border for large volumes of low-priced cards: Wal-Mart, which like many retailers was selling DirecTV systems, which consist of a satellite dish and a black-box receiver, for a heavily subsidized $50.

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Canadians printed out maps of Wal-Mart locations from the Internet and headed for the border, said David Fuss, the president of Incredible Electronics, a major Canadian wholesaler. They bought the systems by the dozens and the hundreds. What Canadian dealers wanted were the included satellite cards, which could be hacked and sold for $150, a handsome profit.

DirecTV's accounting showed that hundreds of thousands of cards disappeared into the vortex of piracy during that period. Last fall the satellite company started shipping systems to Wal-Mart without the card. "It was costing us a lot of money," said Larry Rissler, the head of DirecTV's Office of Signal Integrity. Now subscribers who buy from Wal-Mart have to order the card separately from DirecTV.

Last year DirecTV hired five law firms to mail cease-and-desist letters to American addresses obtained from raids on dealers. To date it has mailed over 7,500 letters. "We are going after the users," Mr. Rissler said. "We are trying to teach them a lesson."

The company is also fighting fire with fire, with its engineers hacking to fight the hackers. The Office of Signal Integrity designs little bits of code with a name that evokes cold war weaponry: Electronic Counter Measures, or E.C.M.'s. The E.C.M.'s, which travel up to the satellite and down to the cards, are the equivalent of heat-seeking missiles. When they find a card that has been hacked, they destroy the programming on it.

A few months ago, DirecTV stepped up its E.C.M. attacks to two or three a week. Within minutes of each attack, dealers said, their phones would start ringing and people would begin lining up in front of the Windsor stores to get their cards reprogrammed.

"It's television," marveled Patrick Reid, manager of Pirate Satellite, another store in Windsor. "It's supposed to be entertainment. But for some people it's critical."

Some viewers have found a remedy to the E.C.M. attacks: they are buying the hardware to program and fix the cards themselves. The devices, called loaders and unloopers, hook up to a PC. After an attack, hackers devise a software remedy and distribute it on the Internet. Within a day, most people are up and running again.

With a PC and an Internet connection, anyone can now be a pirate. The price of hardware has plummeted as competing manufacturers have flooded the market. Equipment that used to cost several thousand dollars has dropped to $100 or $150.

"Everybody and their neighbor has a programmer these days," said Rod Freire, a satellite installer in Windsor who has five satellite dishes on his house.

Still, the Canadian Supreme Court decision on April 26 changed the picture. The ruling that it was illegal for Canadians to watch American satellite television came on a Friday, and over the weekend, satellite piracy in Canada came to a stumbling halt. Storefronts were shuttered and Web sites were pulled down. Apologetic signs went up. Customers panicked. What would they do without their satellite TV? On the Monday after the ruling, the shelves and tables in one Windsor store were bare. The owner had stripped out all his equipment over the weekend. But customers kept calling.

"I can't talk to you on the phone," the owner said. "You can come here and we can talk face to face."

Customers wandered into the store one by one. An older man pulled a small envelope out of his pocket and took out a card. "Do you still . . . ?" he asked.

"We don't program anymore," the proprietor said firmly. Well, at least not officially. The owner then asked the man to leave his name and number on a piece of paper.

"We'll contact you," the owner said. "We'll work something out." The owner, who spoke to a reporter on the condition that he not be identified, said he would probably start making house calls but that his prices would go up.

There is currently an injunction on the enforcement of the ruling. But no matter the outcome, satellite piracy will continue, dealers say, with Web sites moving to offshore servers and more viewers buying the hardware themselves. Decoder News (decodernews.com), for example, a site that had been operating out of Toronto, plans to move its server to the Caribbean.

"If you never give kids candy in the first place, they'll be O.K.," said Mr. Dicker, the owner of Satan's Playhouse. "But you can't give kids a bunch of candy and then take it away. The same is true for satellite."





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Bridget A. Barrett for The New York Times
DO-IT-YOURSELF - Satellite television piracy has spread with the aid of illicit unscrambling cards. Rod Freire of Windsor, Ontario, has five dishes on his house.


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Bridget A. Barrett for The New York Times
UNSATED DEMAND - Patrick Reid, manager of Pirate Satellite, a store in Windsor, Ontario. "For some people it's critical," he said of satellite programming.




John Hryniuk for The New York Times
Adam Dicker, whose company, Satan's Playhouse, sells American satellite dishes to Canadians.





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