In light of the furore about the practices of News International, I thought I’d resurrect some history. News International (News Corp at the time) was accused of unethical behavior to destroy a competitor, but nothing was ever proved. My own conclusions are only speculation.
The UK was one of the first countries to introduce digital terrestrial television, launched in 1998. Six multiplexes or groups of channels were broadcast, with three allocated to the existing analogue broadcasters, and three bought at auction by a consortium called “British Digital Broadcasting”. The News International company BSkyB had been a member of the consortium, but was required to withdraw by the Independent Television Commission on grounds of “media plurality”. (Remember that?)
BDB launched with the service branded “ONdigital”. ONdigital used a subscription business model, offering 18 new channels for £199 a year. Their former colleagues in BSkyB introduced a digital satellite package with 200 channels for £159. That ought to have been enough to kill off ONdigital, but it was alleged that News International was not satisfied.
ONdigital’s subscription channels were encrypted with the MediaGuard system, but pirate cards became available so that people could view all channels without paying. The French channel, Canal+, also a user of MediaGuard, sued News International and its technology subsidiary NDS, alleging that NDS had deliberately released information onto the Internet that would allow pirate cards to be manufactured.
The lawsuit was dropped, (perhaps not) coincidentally after News International bought out a failing Canal+ subsidiary for £600 million. However, the details of the allegations are still in this Guardian article from the time [http://www.guardian.co.uk/technology/2002/mar/13/media.citynews].
Canal+ claimed that cracking the MediaGuard encryption had been an expensive and professional operation, involving highly sophisticated equipment, and had cost (someone) over $5 million. Peanuts to News International, of course.
ONdigital suffered from bad management and poor decision-making as well, and finally foundered after only two and a half years. An unexpected positive side effect, though, was that ex-ONdigital receivers may have given the current service, Freeview, enough initial market presence to get a foothold.