Dish Network Sues News Corp. for Hacking Satellites

NDS, based in Middlesex, England, provides encryption technology for DirecTV Group Inc., Dish's largest U.S. rival.

Dish Network, through its lawyer, Wade Welch, alleges that NDS recruited satellite TV hackers and pirates to crack the security code of the smart cards used by Dish subscribers to receive television programs.

Welch said that NDS tried to undermine Dish's security system because between 1994 and 1997, pirates had greatly broken DirecTV's access codes.

Welch added in a statement that from 1998, NDS used its laboratory in Haifa, Israel, to first crack the secret Dish code.

"NDS used a hacker in California to make pirate access cards, which were distributed through a few dealers but Dish changed its access cards later after piracy information leaked in 2000," said Welch.

Dish said that replacing all the cards over a three-year period, cost Englewood, Colorado-based Dish, formerly called EchoStar Communications about $90 million.