# Nagra confirms Euro hack...



## Darkman (Apr 16, 2002)

Nagra confirms Euro hack
13.09.2005

by Chris Forrester

Encryption specialist Nagra Kudelski says its 'Aladin' smart card version has been compromised. There have been widespread reports of a hack, especially in Spain where it is the card of choice for Sogecable's DTH service Digital+. CEO Andre Kudeski confirmed two weeks ago that Aladin represents some 70% of its business, as of June 2005. The company's biggest customer is Echostar's DiSH DTH system in the US, while Canada's Bell ExpressVu is another major. Between them they have taken some 11.7m cards.

A report from investment bankers Credit Agricole Cheuvreux talked last week of Kudelski planning electronic counter measures to cure the hack: "It is still very possible that the hack will not stand up to the electronic countermeasures," said the bank's note. However, the bank warns of several negative implications for Kudelski, not least the firm's basic reputation given that much has been staked on this iteration, as well as churn amongst clients with players like NTL and Telewest planning on switching to the system.

( the source and the entire article: http://www.infosat.lu/Meldungen/index.php?msgID=17140 )


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## Danny R (Jul 5, 2002)

Its always just a matter of time. 

The whole idea of DBS encryption is silly anyway. It violates one of the cardinal rules of a good cipher... never transmit in code what is available in the clear. Since hackers know what the source material is, it gives them a big leg up in breaking or bypassing the latest and greatest encryption scheme.


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## SimpleSimon (Jan 15, 2004)

Danny R said:


> Its always just a matter of time.
> 
> The whole idea of DBS encryption is silly anyway. It violates one of the cardinal rules of a good cipher... never transmit in code what is available in the clear. Since hackers know what the source material is, it gives them a big leg up in breaking or bypassing the latest and greatest encryption scheme.


 TRUTH!


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## Lord Vader (Sep 20, 2004)

Danny R said:


> Its always just a matter of time.
> 
> The whole idea of DBS encryption is silly anyway. It violates one of the cardinal rules of a good cipher... never transmit in code what is available in the clear. Since hackers know what the source material is, it gives them a big leg up in breaking or bypassing the latest and greatest encryption scheme.


But is the source code really known? DirecTV's current P4 or D1 or P5--or whatever they're calling it nowadays--is completely secure and has been for a couple years now. Looks like DirecTV's piracy days are well behind them.


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## peano (Feb 1, 2004)

Looks like NDS has Kudelski beaten hands down. The P4 or P5 will likely never be compromised, yet the Nagra2 cards were broken before Dish even switched all the channels to the new encryption.


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## SimpleSimon (Jan 15, 2004)

Lord Vader said:


> But is the source code really known? DirecTV's current P4 or D1 or P5--or whatever they're calling it nowadays--is completely secure and has been for a couple years now. Looks like DirecTV's piracy days are well behind them.


 You miss the point. If you have the encoded data AND the desired result, the algorithm can be calculated, just the same as if you have the encoded data and the algorithm, you can calculate the desired result.


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## videobruce (Aug 13, 2004)

A victim-less crime. :nono2:


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## tsmacro (Apr 28, 2005)

videobruce said:


> A victim-less crime. :nono2:


Well I suppose if you mean no one is physically getting hurt, you're right. However paying customers bills go up because of this, so i'd say the fact that anyone who is pirating satellite is at the very least costing honest customers money and pi$$ing them off as well.


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## videobruce (Aug 13, 2004)

> However paying customers bills go up because of this


Why? It costs them the same to provide the service. Same BS cables companies use.


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## cdru (Dec 4, 2003)

videobruce said:


> Why? It costs them the same to provide the service. Same BS cables companies use.


It's denying them (Dish and the network) revenue. It's not a whole lot different then downloading a MP3 or photocopying an entire book. You may not be stealing their physical property but you are stealing their intellectual property.


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## tsmacro (Apr 28, 2005)

videobruce said:


> Why? It costs them the same to provide the service. Same BS cables companies use.


Well because they spend money to have an team to go after people who are stealing the signal. They have to spend money to prosecute people they do catch. Plus they spend money to develop new encryption to make it harder to steal the signal. Everything they have to spend money on translates to the bills we all have to pay for it. Oh and if they have more paying customers there's more people to spread out the costs on and therefore making it easier to keep the price down for each individual. Not that I expect that people who's morals allow them to think it's ok to steal to become paying customers, but one can only hope that maybe they'd see the error of their ways. It's sad that I actually had to give a mini-economics lesson here to make my point. After all it should be enough that it's just wrong to steal. :nono: Oh well.


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## James Long (Apr 17, 2003)

tsmacro said:


> After all it should be enough that it's just wrong to steal. :nono: Oh well.


The simplest stuff is the hardest to explain. 

JL


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## peano (Feb 1, 2004)

Well Bell ExpressVu is still secure, unlike Dish, and they just raised their rates by up to 37%.

So the argument that subscription rates will be lower with a secure system in principle sounds good, but in practice is overcome by corporate greed.


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## Nick (Apr 23, 2002)

The idea that corporate savings through greater operational efficiencies will somehow trickle down to consumers is a myth. Similarly, economies of scale seldom benefit the end-user. It's competition in the marketplace that tends to equalize prices, except in the case of monopolies like cabecos where there is little or no terrestrial competition.

In a competitive marketplace, when a satellite provider has to spend significant amounts of money in securing its signals, it's the shareholders who lose through reduced earnings.


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## LtMunst (Aug 24, 2005)

Nick said:


> The idea that corporate savings through greater operational efficiencies will somehow trickle down to consumers is a myth. Similarly, economies of scale seldom benefit the end-user. It's competition in the marketplace that tends to equalize prices, except in the case of monopolies like cabecos where there is little or no terrestrial competition.
> 
> In a competitive marketplace, when a satellite provider has to spend significant amounts of money in securing its signals, it's the shareholders who lose through reduced earnings.


Economies of scale seldom benefit the end user??? The "walmart effect" has kept inflation at record lows for some time now.


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## FTA Michael (Jul 21, 2002)

Nick may want to copy and paste this: I think Nick is 100% correct in his post. The Wal-Mart effect is competition. Wal-Mart makes a lot of money because its prices on many (not all!) products are better than its competitors. 

Economies of scale are only one factor in the way Wal-Mart has kept its expenses low. Wal-Mart has successfully fought off all efforts to unionize its workers, and it gives them smaller health care benefits than most grocery store workers, who are typically union members. Wal-Mart imports a lot of its products from China, where labor expenses are greatly reduced. Wal-Mart was a just-in-time pioneer among retailers. Its stores use skylights and automatically turn off electric lights when the sun is bright enough.

Wal-Mart has had a lot of bright ideas to cut every possible expense and find every possible revenue stream, but it was doing a lot of that long before economies of scale entered the picture.


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## James Long (Apr 17, 2003)

carload said:


> The Wal-Mart effect is competition.


That is the key difference that separates Wal*Mart from E*/D*. Wal*Mart has effective competition.

Wal*Mart spends a lot of money on loss prevention ... the category that signal theft prevention would fall in to. Their stores were on the cutting if not bleeding edge of wiring their stores with cameras and making it obvious to customers that their actions were on camera. Most stores of size have now joined Wal*Mart's level of electronic surveillance.

If Wal*Mart finally installed enough electronics to prevent all theft from their stores would you expect prices to go down? Nope. Prices won't go down because 1) they don't have to - people have become accustomed to the prices they are paying and 2) the criminals have not given up.

In many ways that is where E*, D* and other satellite providers are. They don't HAVE to lower their prices to survive and they still have criminals to fight.

BTW: To ask E* to give up the fight and not do their level best to protect their signals is like asking Wal*Mart to turn off their cameras, door sensors and other security and trust that no one will rip them off. While Wal*Mart's loss is physical - something taken that physically prevents them from collecting money on that item - E* is affected by even a low level of theft. Making hacking an easy way to get free TV would harm E*.

JL


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## Nick (Apr 23, 2002)

Walmart is not only a pioneer in retailing, it is an anomaly in the retail industry. It is the proverbial 600 pound gorilla that sleeps anywhere it wants to.

Walmart's success in the marketplace has more to do with their take-it-or-leave-it style of price negotiating with vendors, paying below-average wages and an unprecedented flood extremely cheap imported products, mostly from Communist China, has enabled WM to undersell the competition and totally destroy small local retailers wherever they open a store. My small community even lost a lot of local family-operated businesses and even a KMart store when WM came to town. Now, they have dirty floors, cluttered aisles and indifferent, demoralized employees that look down to avoid customers as they walk by on their way to the employee break room.

Economies of scale aren't what have made Walmart into the behemoth it has become today. Walmart has become what it is today by crushing vendors, gutting the American job market and flooding this country with cheap, inferior imported goods that appeals mainly to those on the lower rungs of the socio-economic ladder. The typical Walmart shopper in this area is an under-educated, flip-flop-wearing, morbidly obese mother of 4 or 5 hyperactive kids and waddling behind her shopping card filled with sugar-laden products.

No, Walmart isn't a model of economic-scale efficiencies, it's an anomaly, a dangerous, lumbering gorilla riding on the backs of poor, ignorant and clueless Americans.


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## James Long (Apr 17, 2003)

So tell us what you really think? 

OK ... back to DBS Talk.

James


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## ehren (Aug 3, 2003)

wow that was beautiful


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## Nick (Apr 23, 2002)

James Long said:


> That is the key difference that separates Wal*Mart from E*/D*. Wal*Mart has effective competition...


What are you smoking now, James? :eek2: In my area, WM has little competition, and what competition they do have is marginal at best.


> ...If Wal*Mart finally installed enough electronics to prevent all theft from their stores would you expect prices to go down?...JL


In my previous locale, I was acquainted with the assistant merchandise manager of the nearby Walmart. He confided to me that only ⅓ of those ubiquitous black camera pods actually had working cameras in them, and what was even more amazing, he said their security room is mostly unstaffed during non-peak hours to help hold down on labor costs. Even when they happen to spot someone shoplifting, he said they seldom make an effort to detain the suspect. Seems, the store's GM didn't want other shoppers to see someone getting arrested, and he definitely didn't want blue-light specials outside the store's entrance even though a newly-built DeKalb county police precinct was within 200' (in view) of Walmart's front doors.

In the almost five years I shopped at that store, I never saw police cars out front, except one time when the robber of an area bank drove his getaway car about a mile to the Walmart. He parked on the perimeter of the crowded lot and ran into the store to get a change of clothes. Soon surrounded by the cops and refusing to surrender, the gun-wielding bandit was literally shot to death by the cops right there in middle of the men's clothing department.

It was never determined if the crook had intended to pay for his new duds with the stolen loot from the bank heist.

Amazing!


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## James Long (Apr 17, 2003)

Nick said:


> In my area, WM has little competition, and what competition they do have is marginal at best.


Think bigger. Not every town has dried up because Wal*Mart came to town. Wal*Mart isn't everywhere.


Nick said:


> In my previous locale, I was acquainted with the assistant merchandise manager of the nearby Walmart. He confided to me that only ⅓ of those ubiquitous black camera pods actually had working cameras in them, and what was even more amazing, he said their security room is mostly unstaffed during non-peak hours to help hold down on labor costs. Even when they happen to spot someone shoplifting, he said they seldom make an effort to detain the suspect. Seems, the store's GM didn't want other shoppers to see someone getting arrested, and he definitely didn't want blue-light specials outside the store's entrance even though a newly-built DeKalb county police precinct was within 200' (in view) of Walmart's front doors.


I wonder what national policy is. Our Wal*Marts often have a police car or two parked outdoors and there are plenty of reports in the police blotter in the paper of arrests, and I've seen them go down (as quietly as the customer wants to be taken down).

(In my town, the police prosecute shoplifting as a felony - a city commisioner lost his position over a pack of cigarattes taken by mistake from a supermarket. He was convicted and you can't be a commissioner here if you have a felony conviction.)

The "who is watching is the camera there" issue is beside the point. It still costs money to install plastic domes and hang real cameras and the entry way TV set ... plus they recently added the electronic tag detectors at the entrances of our area stores. The greeters are security, not window dressing.

Perhaps your friendly manager needs to be brought up to speed by somone at the home office. Perhaps he already has. It isn't typical.

JL


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## Mike Richardson (Jun 12, 2003)

SimpleSimon said:


> You miss the point. If you have the encoded data AND the desired result, the algorithm can be calculated, just the same as if you have the encoded data and the algorithm, you can calculate the desired result.


How do you have the desired result? Unless you have a legal box that has Nagra2 and you can get the decoded result from it somehow then you don't have the true decoded result. Sure, you can look at the Discovery channel on your digital cable, and you know what the result should look like graphically, but their MPEG data will be different because of different bitrates, codec differences, even a minor fluctuation in the conversion of the analog cband Discovery channel signal into the digital one, would cause a different bitstream.


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## James Long (Apr 17, 2003)

Mike Richardson said:


> How do you have the desired result?


Many hackers (or at least the profiteering ones making money off of other hackers) have the service they are assiting others to steal. Besides, as long as they are buying off-the-shelf encryption there will be a shelf to look at.

JL


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## SimpleSimon (Jan 15, 2004)

James Long said:


> Many hackers (or at least the profiteering ones making money off of other hackers) have the service they are assiting others to steal. Besides, as long as they are buying off-the-shelf encryption there will be a shelf to look at.
> 
> JL


 Correct.

IMO, details as to just how this benefits the bad guy is not appropriate to discuss here.

Mike R, you raise a proper point, but know that the necessary form of "desired result" IS available.


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## kenglish (Oct 2, 2004)

Why don't the satellite companies just give away their programming for free? There's really no need to scramble anything. The broadcasters do it all the time, and they stay in business.

_( Hey! I couldn't resist saying it.)_


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## tsmacro (Apr 28, 2005)

kenglish said:


> Why don't the satellite companies just give away their programming for free? There's really no need to scramble anything. The broadcasters do it all the time, and they stay in business.
> 
> _( Hey! I couldn't resist saying it.)_


Because Kurt Bazedow (sp?) doesn't pay them enough! :lol:


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## Jacob S (Apr 14, 2002)

The broadcasters get paid by the cable companies and satellite companies (really us since we pay them) so there is no difference. They dont make all their money from the ads although many channels could probably still turn a profit with just the commercials.


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## FTA Michael (Jul 21, 2002)

_Some_ OTA broadcasters get paid by cable/DBS companies. Stations that might otherwise be left out of the locals package can invoke must-carry, which gets them in the system but without getting paid.

Stations that go without cable/DBS payments must be turning a profit through commercials or pledges or appreciation or something. I haven't heard of significant numbers of stations folding for lack of funds.


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