E Questions That News Will Not Answer War of Words the Pay TV Piracy Story As Told by News Limited
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The Australian Financial Review www.afr.com l Friday 13 April 2012 FEATURES 49 The questions that News will not answer War of words The pay TV piracy story as told by News Limited All that News saw fit to print The Australian News Ltd CEO found for EchoStar on three of six Optus head of ‘Anti-piracy expert’ Kim Williams charges; judge entered permanent Television Michael Speck newspaper has ‘I saw no injuction to prevent NDS pirating (1998-2001) Speaking to The Australian on April 5 dismissed allegations EchoStar. EchoStar failed to prove the Mike Lattin ‘It looks like a complete beat-up. evidence.’ extent of damages; forced to pay $19m about pay TV piracy What The Australian legal costs. ‘It’s fantasy, pure It doesn’t raised by The didn’t say: rubbish. It’s just a convince at Mr Williams did not Telstra CEO beat-up. I was right many levels.’ Financial Review in a join Foxtel until (1999-2004) at the forefront of it. But Mr Speck told series of articles. December 2001, after the events I know Foxtel was the opposition the Sydney reported by the AFR. Ziggy Switkowski ‘It never occurred but there was no evidence of it.’ Morning Herald on The Australian has March 29: ‘There is NDS executive as far as I was What The Australian didn’t say: The [an] element of quoted various chairman concerned.’ AFR has not suggested Foxtel was in convenience in any way involved in pay TV piracy. executives involved in Abe Peled What Mr Switkowski pirates focusing on your competitors ‘NDS was told the AFR: Foxtel took up 5 per cent rather than yourself . this appears to the pay TV industry in of my time. It was a rounding error. Optus Vision CEO be very low-level activity by an isolated vindicated by 2009 Geoff Cousins dismissing the He also told the AFR, in the context of pocket of executives.’ trial of piracy (1995-1996) When questioned by the AFR about the allegations. claims brought by the relationship between the Foxtel partners (Telstra 50 per cent, News Ltd ‘Never heard of apparent inconsistency in his US satellite broadcaster 25 per cent, Consolidated Media anything remotely observations, Mr Speck said he had But The Australian EchoStar, describing $19m Holdings 25 per cent) that: “They [the been speaking hypothetically when like the allegations responding to the SMH. has been, at best, payments (to NDS) as costs and allegations] are just another matter at the time I was at Optus.’ damages awarded.’ that would have coloured our judgment. selective in its use of Frankly, not too much would have What The Australian didn’t say: those quotes: What The Australian didn’t say: surprised us.” Mr Cousins left Optus Vision two years No damages were awarded; the jury before the events alleged by the AFR. to influence the sale to Foxtel of Austar 12 their activity would have gone unnoticed by the time, before he went on to head Sky Freudenstein was its deputy chief executive. years later. This is to confuse the long-term – by those around them.” Italia, which is also now embroiled in a Freudenstein makes a number of effects of helping piracy get a foothold, with Piracy operations were about trying to criminal trial of a hacker and an anti-piracy innocuous appearances in the emails from intent. understand your criminal opponent: “In the expert, both of whom were on the NDS 1999 to 2002 in correspondence with OpSec Michael Speck, described by The past, clearly – clearly, that has presented an payroll. UK chief Ray Adams. Australian as a piracy expert, explained the opportunity for some to overstep the mark.” There is no suggestion that Mockridge, BSkyB executive Sharon Southwell-Gray logic of NDS’s reported operation in a taped It was highly unlikely to occur now. now running News International in Britain, oversaw the relationship with OpSec. The interview with The Sydney Morning Herald’s But a week later, when he spoke to The knew about these activities – that’s the point money BSkyB provided to OpSec to fight Lia Timson: Australian, Speck gave a different account. of running a covert operation, and Foxtel piracy included half the budget for the fund “I can’t speak to the specific allegations, There was no logic to the alleged operations, and Sky Italia were the victims in these cases. for “payments to police informants”. however, there is [an] element of convenience he said: “It looks like a complete beat-up.” However, the new head of Foxtel, Richard But Freudenstein told the AFR this week: – element of convenience in pirates focusing Asked about his change of views, he said Freudenstein, has waded in to dismiss the “I was not the executive responsible for the on your competitors rather than yourself. his earlier comments had been reports. He was in London at the time, but Sky/NDS relationship in relation to “. This appears to be very low-level “hypothetical”. unlike Williams, he had met members of the management of piracy and I have no activity by an isolated pocket of executives. The obvious person to ask for comment Operational Security team. As well, the team knowledge of the payments referred to in your Um, and to a large extent the minutiae of would be Tom Mockridge, head of Foxtel at was partly funded by BSkyB when email.” Trouble on the tables plagues a former `RSL club on steroids' the stories was Peter Grimshaw, then the chief On February 2, Vaikunta was sacked. He smear campaign against a sexual harassment hearing, which concluded on Wednesday. Echo media adviser to NSW Premier Barry O’Farrell fled overseas as the story broke. The gaming victim. The company, in turn, after initially released texts in which Grimshaw told his and a former media and government relations authority launched a fresh investigation on denying it was the source of the leaks, said it girlfriend that O’Farrell, then NSW Opposition adviser at the casino for 16 years. February 16 into the circumstances was protecting its commercial interests in the Leader, wanted to “smash” The Star. In different circumstances, those suspicions surrounding his departure. face of a sustained negative media campaign. Grimshaw resigned after giving evidence. might never have been aired publicly. The James Packer chose February 25 to It gave Packer a free kick at Echo’s Only then did the focus shift back to The casino regulator told the Gaming Minister announce he wanted to build a $1 billion hotel management, and he called for heads to roll. Star. Mullin, who took the stand on George Souris on December 15 that it had and casino complex at Sydney’s Barangaroo The texts revealed Grimshaw and his Wednesday, appeared to smirk when asked found The Star should keep its licence. development. As part of the plan, he needed to girlfriend had plotted for months about how to about the change in culture at the casino under It seemed a return to business as usual. But, seize control of Echo, which has Sydney’s remove Vaikunta from his position, although his management. One witness described it as unbeknown to the regulator, The Star was in exclusive casino licence until 2017. there is scant evidence the pair followed “pussy, podium dancers ... [and] sport stars”, the midst of a scandal. Two days earlier, Mullin O’Farrell was effusive about the proposal. through with any of their plans. accusing Vaikunta of having a drug habit had received a phone call in Hawaii informing The controversy at The Star appeared to Grimshaw texted his girlfriend on November which led him to be nicknamed “Sniffing Sid”. him that two women had accused Vaikunta of recede until, on March 2, Echo leaked texts and 23, as the casino regulator neared the end of its Vaikunta denies ever taking drugs. sexual harassment. emails between Grimshaw, O’Farrell’s chief licence review, that he was confident Vaikunta, Mullin said the changes had been The Star kept a lid on the controversy until a media adviser, and his girlfriend, who, it whom he dubbed “Mr Nasty”, would lose his misrepresented, adding outside the hearing six-week internal investigation substantiated transpired, was one of two women who had job. that Echo was not “at war” with the O’Farrell the claims, including an incident involving complained about Vaikunta. A former human The casino regulator widened its review on government and he did not believe the brand serious physical touching and a series of resources executive at The Star, she was sacked March 26 to consider the revelations. was damaged irreparably. comments, all but one of which were found to days after Vaikunta. Grimshaw spent a damaging two days in the Time will tell, and Packer will be reading be sexual in nature. O’Farrell accused the casino of waging a witness box at the regulator’s five-day public intently when the regulator reports on April 30. FBA 049.