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The nation’s biggest provider of satellite television programming, DirecTV, last year declared war on potential signal pirates. Now the alleged pirates have answered back, filing a suit in a Los Angeles County court charging DirecTV with wrongfully accusing thousands of innocent people of stealing its signals and threatening them with litigation. According to papers filed by DirecTV in response to the suit, the company has already sued more than 600 alleged skyhackers. But, before filing those cases, the purveyor of satellite dish television embarked on an aggressive letter-writing campaign targeting “end users” — people it believed had purchased black-market satellite TV signal-decoding equipment — threatening them with prosecution and demanding that they surrender their equipment and pay DirecTV a monetary penalty. In what is intended to be a class action, Jeffrey N. Wilens of Mission Viejo, Calif.’s Lakeshore Law Center charged the company with extortion and with using unfair business practices. In his complaint, Wilens said, “Here, defendant’s legitimate concerns about piracy of satellite transmissions does not come close to justifying their carpet-bombing, collateral-damage-ignoring, heavy-handed campaign of intimidation and extortion, accusing thousands of innocent persons on the possibility that a few guilty persons may be uncovered.” On Nov. 22, DirecTV answered the case, filed in October, by filing a motion to dismiss under California’s anti-SLAPP law. (SLAPP stands for Strategic Lawsuits Against Public Participation.) SLAPP suits are usually, but not always, intended to crush public opposition to corporate or government action by chilling free speech and discouraging petitions for redress. DirecTV has told the court that its right to send letters to people it believes are pirates is being threatened by Wilens’ would-be class action. The anti-SLAPP motion, which will be argued in January, has halted discovery in the class action and has provided DirecTV with expedited review as well as a chance to recoup its attorney fees. At the heart of the dispute is the end-users’ allegedly unlawful possession of a variety of electronic gadgetry that DirecTV asserts has only one purpose: the theft of its satellite signals. Because satellite TV signals are encrypted, reception requires two essential pieces of equipment: an outdoor dish antenna and a signal descrambling box that sits atop the television. Within that set-top box is a removable credit-card sized “smart” card containing a microchip. Embedded in that chip is the code needed to unscramble a DirecTV signal. A lawful satellite TV subscriber’s smart card would be encoded to descramble only those signals for which the subscriber has paid. But, according to attorney Larry E. Rissler, a former FBI agent who heads DirecTV’s office of signal integrity, at least three different types of decryption devices can be bought on the Internet. Those devices can enable a basic-satellite-service subscriber to gain access to premium channels, and enable a nonsubscriber to gain access for free. Originally, hackers primarily used smart-card programming devices to alter decryption chips, Rissler said. But, in January 2001, the company transmitted an electronic pulse designed to destroy such illegally reprogrammed chips. However, the pulse proved to be a boon to the hackers, triggering “a hardware explosion,” Rissler said. Soon ads for other devices began to appear on pirate Web sites. Each was designed to bypass the damage caused by the DirecTV pulse. The company changed its tactics. Using rights created by the 1998 Digital Millennium Copyright Act and other federal laws, the company began civil prosecution of the pirate sites, closing them down or taking over and converting them to anti-piracy sites. DirecTV also seized sales records, getting the names of thousands who had purchased decryption equipment. Those names became the fodder for the company’s letter-writing campaign. ‘HAM-FISTED’ Calling the Web sites “small-time operations run out of private homes,” Wilens said that they didn’t have the resources to fight DirecTV, so they shut down. “It’s the same tactics being wielded against the consumers.” Swept up in the letter-writing campaign, he said, are many subscribers who are legitimately paying for the signal. Wilens called the company’s tactics “ham-fisted,” adding, “You ordered a smart-card programmer. That’s all they know. They don’t cross-reference it with their client base.” Possession of a smart-card programmer alone is not grounds for civil or criminal prosecution without proof that it has been used to intercept a signal, Wilens said. He added that he does not believe DirecTV can meet that burden. Rissler countered that the simple possession of certain kinds of satellite-signal decryption equipment has been outlawed by federal wiretapping laws. Wilens also rejected the assertion that his case is a SLAPP suit, arguing that most of the letters sent by DirecTV were sent only to intimidate, were not truly related to litigation and were not protected by the anti-SLAPP law. Citing a Wall Street Journal article in which a company spokeswoman allegedly said DirecTV would mail 100,000 letters at a rate of 1,000 per month, he asked “how can they sue all those people? “If they’re suing people indiscriminately, they’re leaving themselves open for malicious-prosecution liability. If they don’t sue people, then they’re screwed for having sent the letters in the first place,” he said. More than 300 letter recipients have contacted him about the class action, Wilens said. Dale H. Oliver, a partner at Los Angeles’ Quinn Emanuel Urquhart Oliver & Hedges, is lead counsel for DirecTV. He declined to comment on the case, referring inquiries to the company’s in-house legal department. DirecTV’s assistant general counsel, Christopher Murphy denied that the company had ever set a target of 100,000 mailings and defended its tactics. “When we file, we have a good-faith belief that we have sufficient evidence to prevail,” Murphy said. He also said, “If we are mistaken, [the defendants] can have their day in court.” None of the hacker cases has been tried or otherwise decided on the merits so far and none has been dismissed.

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