DirecTV Gets Aggressive on Signal Theft. (Media & Technology).

The fight to stamp Out satellite television piracy, which has been directed at manufacturers and distributors of illegal devices, is moving to a new frontier: the living rooms of rogue remote control jockeys.

The El Segundo-based DirecTV unit of Hughes Electronics Corp. has filed more than 100 lawsuits this year against individuals it accuses of bringing 400-plus channels into their homes -- courtesy of the company's six, $250 million satellites -- without paying for the programming.

The company would not put a number on revenues lost to piracy, but Bob Scherman, editor and publisher of industry trade magazine Satellite Business News, estimated that stolen signals cost the industry as much as $300 million a year. That's based on an estimate of 500,000 people in the U.S. and Canada stealing service valued at $50 per month.

DirecTV and its pending merger partner, EchoStar Communications Corp., have a combined 15 million subscribers in the U.S.

While the litigation it has brought is still pending, DirecTV, through its Office of Signal Integrity, has been expanding its efforts to stem the piracy tide by using traditional targets of anti-piracy investigations -- businesses -- to smoke out the new ones -- homeowners. Authorities who raid suspected piracy facilities comb databases at the sites to identify who's buying illegal satellite reception devices.

"The largest source of end user names has been gleaned while doing civil seizures from distributors," said Larry Rissler, a former FBI agent now vice president of signal integrity for DirecTV.

Rissler wouldn't disclose his budget, but pointed to the 10 people in his office, a network of private investigators around the country, three law firms on retainer and personnel in DirecTV's engineering and legal divisions as proof of the company's commitment to controlling piracy.

"It's a significant effort," he said. "We think it's a serious problem."

When DirecTV finds people it suspects of stealing its feed, the company sends out a letter demanding they relinquish illegal devices and sign a document vowing never to steal the feed again. The letter also requests restitution of about $2,400, which Robert Mercer, a DirecTV spokesman, said is the annual charge for the top 10 percent of DirecTV's legitimate subscribers.

Easy pickings

Anyone can go to Circuit City, Fry's Electronics or Best Buy and purchase the hardware to get DirecTV, but the service is no good without an access card set up to deliver a specific package of programming.

Access cards, the size of credit cards, come with an imbedded computer chip that is easily programmed with the help of a circuit board and decryption software downloaded from the Internet. Once modified and inserted in to the box, the rogue viewer is undetectable.

"The only way our systems talk back to us is via a phone line and that's only billing information," said Mercer. "There's no way for us to tell whether a person is using a hacked card."

As a result, manufacturers and distributors of illegal devices, along with access card hackers, operate in the open with little regard for getting caught.

"These people are very brazen. They'll advertise through Web sites, in (classified) shoppers," Mercer said. "They'll even set up at electronics trade shows."

In addition to tracking theft of signal, DirecTV has started to hit pirates through electronic countermeasures. The company studies how seized access cards are programmed and fashions an electronic signal to disable the card and sends it out through the feed. That's what happened on "Black Sunday," the week before Super Bowl XXXV, when an electronic countermeasure "killed" hundreds of thousands of illegally modified cards.

"It's a short-term solution," Mercer said. "These hackers are very smart, very resourceful, and find a way around it."

Cards can be returned to the seller and reprogrammed or simply plugged into something called a boot loader, which overrides the damage done by the electric countermeasure.

Another fix, called an unlooper, undoes an electronic counter measure that causes the access software to "chase its own tail." Of course, all those fixes cost more money.

Legitimate hardware -- dish, set-top box and access card -- can be had for as little as $50, plus the monthly fee. A hacked access card costs between $150 and $300. Fixing damaged cards hit by electronic counter measures can cost that much again.

"Consumers deceive themselves because it's not really a good deal for them," Scherman said. "By the time you get done you could have bought the product legitimately."

Rissler said stealing satellite feeds violates four federal and multiple state and local statutes. The offense is punishable by fines up to $10,000 plus imprisonment.

Despite the efforts to stem theft of what amounts to 3 percent of the overall market, Scherman, the publisher, said DirecTV can't possibly be serious about running down significant numbers of end users.

"I think they're trying to send a message," Scherman said. "You can't afford to go after 100,000 consumers, both from a PR perspective and financially. What business wants to sue a customer?"