Canada Seeks U.S. Help with Signal Theft

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Alarmed by reports of lost pay-per-view revenue and the
burgeoning international market of piracy tools via the Internet, Canadian operators and
satellite programmers have asked for direction from American experts to help curb signal
theft in their portion of the continent.

The Canadian Motion Picture Distributors Association, part
of the Motion Picture Association of America, has focused on videotape piracy. But that
country's Film & Video Security Office determined last year that tape piracy is not as
bad a problem as it is in the United States.

So the organization has decided to shift its focus, and it
will now spend 70 percent to 80 percent of its time tracking signal pirates, said Serge
Corriveau, national director of the Canadian Anti-Piracy Program.

There is evidence of pay-per-view theft in Canada. A recent
study by Astral Communications asserted that Ontario has two PPV thieves for every movie
buyer. The rate is also alarming in Quebec, where the ratio is one-to-one.

Corriveau said investigations to date have shown Canada to
be a hotbed for direct-broadcast satellite pirate technology. For instance, in November,
$15 million in doctored DirecTV Inc. smart cards were seized in one Canadian raid.

Pirate technology has surfaced for each of the
distributors, the official said, most recently including EchoStar Communications Corp.'s
hardware.

Piracy experts in the United States confirmed that Canada,
especially Vancouver, has become a significant point of entry for electronic gadgets used
in altering set-tops.

Many of those devices are now sold through the Internet
from distributors, mostly in the United States, but they are being bought in both
countries.

To learn more about the problem and possible solutions, the
Canadians held a meeting in February during which U.S. attorneys, investigators and
vendors educated Canadian operators, government officials and several members of the Royal
Canadian Mounted Police.

It appears that a lot of systems were formerly focused on
technological advances and their related cash flow. But now that more services are in
place, operators are acknowledging that the pipeline has become significantly more
expensive, said panel participant T.J. Tomsu, vice president of sales and marketing for
Frontline Solutions Inc., a U.S.-based system-auditing firm.

Tomsu noted that recent acquisitions such as AT&T
Corp.'s buyout of Tele-Communications Inc. have set system values at $3,200 per
subscriber.

"The value of each customer has significantly
jumped," she said. So operators everywhere are more cognizant of the bottom line.
Revenue losses previously written off as a cost of doing business are no longer tolerated,
she added.

"I think that they're starting off on the right
foot," said Geoff Beauchamp, an attorney with Wisler, Pearlstine, Talone, Craig,
Garrity & Potash in Pennsylvania, who also advised the Canadians.

Their comprehensive effort wisely includes the
intellectual-property-rights holders, he added. U.S. and Canadian investigators can work
together to better police the Internet and to share leads on criminals.

"Bottom line, I think that it will help,"
Beauchamp said.

Corriveau said the Film & Video Security Office already
has investigations under way, and, as in the United States, it hopes to bring criminal and
civil cases against suspects.

Part of that effort will include learning how to make a
good case: A few attempted prosecutions in Vancouver have already been thrown out because
they were not tightly crafted, he indicated.

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