BBC Panorama links computer hacking to collapse of ONdigital, Sky TV's big rival
Further challenges ahead for News Corp in the UK: a BBC Panorama programme on Monday is set to allege that a unit of the Murdoch empire used computer hacking to undermine the business of its chief TV rival in Britain.
Britain's top pay TV channel
A software company NDS, owned by News Corp, is said to have cracked the smart card codes of rival company ONdigital - owned by the ITV companies Granada and Carlton. The company eventually went under, says the Guardian, "amid a welter of counterfeiting by pirates".
The company's demise left the pay-TV field clear for Sky.
The allegations on the Panorama programme are said to stem from apparently incriminating emails the programme-makers have obtained.
The Guardian says there are " on-screen descriptions for the first time from two of the people said to be involved, a German hacker and the operator of a pirate website secretly controlled by a Murdoch company."
The allegations, if proved, cast further doubt on whether News Corp meets the "fit and proper" test required to run a broadcaster in Britain, said the paper. Broadcasting regulator Ofcom has set up a unit called Project Apple to establish whether BSkyB, 39.1% owned by News Corp, meets the test.
Panorama's emails are said to indicate that ONdigital's secret codes were publicised by a pirate website, called The House of Ill Compute - THOIC for short- after they were cracked by NDS.
Later thousands of counterfeit smart cards appeared , giving viewers illicit free access to ONdigital, then Sky's chief business rival.
The "potentially seismic nature of these pay-TV allegations" was underlined over the weekend, said the Guardian, when News Corp's lawyers, Allen & Overy, sent round denials and legal threats to other media organisations.
They said any forthcoming BBC allegations that 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 does not dispute that it got its own hands on ONdigital's secret codes, which was not itself illegal. NDS says there is an innocent explanation "as part of the fight against pay-TV piracy".
On the programme, former Labour minister Tom Watson, a critic of News Corp, says Ofcom could not conceivably regard the Murdochs as "fit and proper" to take full control of Sky, if the allegations were correct.