Illegal decoders cost UK cable TV companies millions

Illegal decoders that are attached to set top boxes and can access premium cable channels for free, are costing the UK cable TV industry millions of pounds per annum.

Decoders such as the versachip, designed by a couple found guilty this week of "fraudulent activity, enable people to avoid paying their cable TV company for premium channels by decoding the signals.

Gary Spooner, investigations manager for Telewest Communications, said that the problem was a countrywide one. If everybody who had a settop box used such a decoding device, it could potentially cost the industry unrealised earnings of £32 million each year, based on people not having to pay £74 for the premium package each month.

He claimed that Telewest was "aggressively tackling the problem" by making unannounced visits to customers' premises to check for such devices and by taking manufacturers to court. While he said the firm did not usually sue customers, "where we find decoders in homes, we disconnect them."

Last week, Telewest carried out Operation Jackal in the Birmingham area, targeting the addresses of existing customers. "It was very successful," Spooner said.

The company is also campaigning as a member of the Telecoms UK Fraud Forum to try and change existing legislation. The aim is to make it possible to prosecute the makers of illegal decoders under the Telecommunications Act of 1984, which carries a maximum prison sentence of five years for the first conviction.

Under existing law, however, decoder manufacturers cannot be prosecuted under this act because a cable network is defined as a private network when used to transmit television.

But if fraudulent activity is carried out on the same network and used for telecommunications purposes, it is deemed a public network. As a result, offenders can be prosecuted under the Act and can expect a stiffer sentence.

Spooner said, however: "I can't see there's a difference."

But he added that the scope for fraud using decoders would be limited by 2006 when Telewest and its rivals would be obliged to migrate to digital technology from analogue. "Decoders like the versachip only work on analogue. When we move to 64bit encryption, it will alleviate the problem."