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Satellite piracy: Hackers and broadcasters duel in Mexico. (Tech Talk).

Sick of those same old pay cable stations? Jealous of friends who always have the big game? How would you like every channel--sports, movies and pay-per-view--for a one-time only fee? Sound good? More and more Mexicans think so.

Just like many of their U.S. neighbors, thousands of residents south of the border are tuning in to the cheap and relatively easy option of pirating satellite television instead of paying for it.

"It's happening and it will continue to happen," says Raymond Lekowski, senior vice president and chief engineer for DirecTV Latin America, Mexico's second-largest satellite television provider.

Lekowski, who heads the company's anti-piracy efforts, estimates that 15% to 20% of DirecTV satellite viewers receive their signals illegally. In Mexico, as many as 300,000 viewers could be in on the act, using pirated equipment bought in the United States and installing it themselves in order to view U.S. satellite television. Consider that DirecTV has just 280,000 legitimate subscribers in Mexico, and one can easily understand the reason for alarm.

Sky, Mexico's largest satellite provider, declined to be interviewed for this story, but sources told BUSINESS MEXICO the company is just as concerned about the problem.


All told, piracy costs the industry about US$1 billion a year, analysts say. The temptation to "hack" satellite signals appears strongest in Mexican border-states, where the close proximity to the United States allows residents easy access to the necessary equipment. As of now, all one needs is a dish, a set-top receiver and a pirated access card to Receive signals, and bingo: free Tyson fights for life, or at least in theory.

Residents as far south as Mexico City are catching on as well, hooking up dishes and large antennas, and buying the equipment from friends up north or in specialty shops that advertise their illegal goods in local newspapers. Though the equipment is more expensive in Mexico City, viewers here can recoup the 5,000 to 15,000-peso cost of their pirated package after just a few months of viewing.

"I get everything; NBC, CBS, all the networks. This piracy is a wonderful thing," one Mexico City viewer told BUSINESS MEXICO.

So far, fighting satellite television piracy has proven tough. In Canada, for instance, DirecTV holds no broadcasting license, so viewers can point their dishes south and receive programming free of cost or threat of being caught. Mexican law, however, forbids viewers from receiving U.S. broadcasts not transmitted by Mexican networks. Catching them in the act, of course, is another matter.

DirecTV offers cash rewards to anyone providing information leading to the arrest and conviction of people stealing satellite signals. The company also sends a team of inspectors to Mexico to detect pirate viewers of the U.S. satellite system and report them to local authorities. Satellite providers can even electronically zap pirated receivers to jam the incoming signal. That's what happened last year, when DirecTV surprised about 200,000 U.S. viewers one week before the Super Bowl.


Luckily for Mexican viewers, the same tactic was not used during this year's World Cup. But the industry's strategy is not to concentrate on viewers.

"There are simply too many," says Lekowski.

Instead, companies are targeting the hackers themselves, engaging in a frustrating game of cat and mouse in which new anti-piracy methods are quickly met with ways around the system.

DirecTV has had better success in Mexico, where a new system using smart card technology was implemented this year, rendering tampered cards and equipment bought north of the border useless for viewing DirecTV's Mexican service. So far, hackers have yet to breach the system. Just how long it stays that way is another matter, And at the same time, television fans in Mexico continue to pirate DirecTV's relatively unprotected U.S. satellite service.

Still, DirecTV isn't taking any chances with its Mexican operations; it's already spending millions of dollars to develop new smart card technology to stay one step ahead of would-be hackers in the future.

"We don't wait to get hacked because we understand the nature of this business" says Lekowski. "There's a lot of money in this."

Stevenson Jacobs is a freelance writer and a reporter for a Mexico City daily.
COPYRIGHT 2002 American Chamber of Commerce of Mexico A.C.
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Author:Jacobs, Stevenson
Publication:Business Mexico
Article Type:Brief Article
Geographic Code:1USA
Date:Jul 1, 2002
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