NOVEMBER 14, 2002
SATELLITE-TV BUST A FIRST IN CANADA
RCMP raid shuts down St. Boniface electronics business (Bruce Owen, Winnipeg Free Press)

A St. Boniface electronics business is the first in Canada to be shut by the RCMP for allegedly making and selling computer equipment that pirates satellite-TV signals.

Mounties say XGEN Technologies at 1-150 Goulet St. allegedly supplied the tools needed for black market Direct TV satellite owners to essentially "steal" hundreds of mostly American television programs.

"The Supreme Court of Canada has been pretty clear on this issue," said Const. John Ryll of the federal enforcement section. "It is theft. If nothing is done it will eventually put (legitimate) broadcasters out of business. It's still stealing."

Ryll said the investigation against XGEN started five months ago after a complaint from the Canadian Motion Picture Distributors Association. The CMPDA is the agent for Bell ExpressVu and Star Choice, the two main providers of satellite-TV programming in Canada.

Ryll said it was capped Nov. 5 when police raided XGEN and seized boxes of electronic components used to assemble computer equipment needed to "program" satellite-TV access cards.

In much the same way a computer user burns downloaded music onto a blank disc, XGEN allegedly sold electronic programmers to Direct TV viewers that would let them descramble encrypted satellite-TV channels and watch for free.

For satellite TV, viewers need an access card for their receiver, and XGEN is alleged to have supplied the technology needed to reprogram those access cards so users would have unlimited access to American satellite TV. A user simply plugs the programmer into his computer, downloads from the Internet the information or coding needed to descramble a satellite-TV channel, and "burns" that information onto his access card. An access card is about the same size as a credit card.

"It opens the door to all those services without paying a fee," Ryll said.

Ryll said XGEN is believed to have sold the programmers, or "unloopers," for $74 each.

Mounties seized enough equipment to make 750 programmers.

The company, registered with the province last Feb. 6, is alleged to have sold programmers throughout North America and as far away as Mexico.

XGEN's Goulet Street store appears to be closed and all office materials have been removed.

RCMP did not name the two people behind XGEN, but provincial documents list them as Dan Saltel and David Lloyd, both of Winnipeg.

Their lawyer, Tim Killeen, said neither man would comment.

Ryll also said Mounties would not go after home satellite-TV viewers who are pirating American and pay-per-view channels, but would continue their efforts against businesses that violate Canada's telecommunications laws.

"We don't have the resources to go door to door," he said.

Asked about a recent report that said the pirating devices were used by RCMP officers stationed in remote communities, Ryll said these officers have been ordered to get rid of their Direct TV dishes and counterfeit access cards.

He declined to elaborate.

"That problem has been addressed and it no longer should be a problem," he said.

The use of counterfeit access cards is widespread in Canada, as satellite-TV owners would rather watch American programming than Canadian.

Many ethnic groups also use the cards to get TV shows from their home countries.

It was known as the "grey market" up until last April, when the Supreme Court of Canada outlawed illegal satellite programming.

The 7-0 ruling said only lawful Canadian distributors can deliver direct-to-home services.

Saltel and Lloyd each face one count under the Criminal Code of Canada of selling electronic components capable of unlawfully obtaining telecommunications and one count under the Radiocommunication Act of selling components capable of decrypting an encrypted programming broadcast.

The maximum penalties are two years in jail or a $25,000 fine.