The investigation began two years ago year when a Walt Disney Co. executive spotted a van with the logo “Cable Busters” tooling around his neighborhood. Disney alerted the Motion Picture Assn. of America and last month a Simi Valley businessmen was sentenced in Ventura Municipal Court after his conviction on three counts of violating the state’s cable theft law.
Itzhak Bejerano, 43, owned Cable Busters, a Simi Valley store that sold satellite TV dishes. According to prosecutors, he also sold illegal decoding equipment so that his customers could watch whatever cable TV programs they wanted without paying the cable companies for the service.
Bejerano was sentenced to 90 days in jail and ordered to pay a $15,000 fine. He is appealing the case.
Bejerano had an employee, Max Sarango, who also was charged with cable piracy. In July, Sarango pleaded no contest to a single count of violating the state’s cable theft law and later was sentenced to 60 days in jail and fined $5,000.
Ventura County Deputy Dist. Atty. Mike K. Frawley said the Bejerano case was one of the first in the nation in which satellite signal piracy had ended in a conviction.
It’s part of a fledgling national effort by the Motion Picture Assn. of America, the Federal Communications Commission and the cable industry to try to slow the theft of cable programming, which amounts to $1.4 billion a year in lost income. The problem is that TV-addled couch potatoes can go out and buy sophisticated electronics gear that illegally unscrambles cable TV signals that arrive via satellite dishes, or divert signals in homes already wired for cable.
In the past couple of years, there have been about 30 cases of cable piracy theft prosecuted by federal and local officials, according to James Allen, head of the National Cable Assn.'s office of cable signal theft.
Besides trying to put the makers of illegal cable decoding equipment out of business, Allen said, “we’re trying to educate consumers that if you participate in cable piracy, you may have to bear responsibility.” Some important federal cable piracy cases are winding up, and he hopes that the elaborate customer lists kept by cable decoding equipment sellers will be turned over to local cable franchises so they can try to collect unpaid fees from those who bought the illegal equipment.
But trying to stop cable piracy is like trying to stop an advancing army with a peashooter. The mathematics of cable theft is daunting. There are about 1 million satellite dishes in the United States today, and “as much as 50%" of the owners are pirating some cable programming, said Mark Harrad, spokesman for the Motion Picture Assn. of America.
The other thievery occurs in areas already wired for cable. Allen says 78 million American homes are cable-ready and in 12%, or 9 million of those homes, “there is some level of signal theft.”
It’s all the more appalling for cable companies because they have spent plenty trying to protect their product. Moved in part by the surge in satellite dish sales, in January, 1986, HBO and Cinemax began scrambling their signals and, since then, most cable companies have followed. So in theory, cable customers who want to watch, say HBO, have to pay a monthly fee for the privilege.
But where there is a will, there is a way. Anyone skimming through the pages of electronics magazines will find plenty of ads by elusive retailers, with 800 numbers and obscure post office boxes, offering to sell illegal cable decoding systems for $200 and up.
“We’re never going to develop a decoder box that’s 100% tamper-proof. It’s just a matter of time before electronic wizards out there trying to defeat electronic scramblers break through,” said Chuck Peters, security manager for Cox Cable in San Diego.
Curt Christenson, technical manager for United Cable, which has a cable franchise in the east San Fernando Valley, pointed out that 98% of his company’s programming is scrambled, including the visual and audio signals. Despite those precautions, “everything is defeatable by the average black market converter,” he said.
The Bejerano case, prosecutors say, helps explain how the system can be beat.
Neither Bejerano nor Sarango would return phone calls requesting comment on their cases.
Today, the way a satellite dish system is set up, if you buy a TV dish--presumably because you live in a rural area that doesn’t have cable--to legally watch most cable channels, you also need to buy a decoder (cost: about $400). A customer calls the individual cable company and signs up for the service and, via a satellite signal, the customer’s decoder box is electronically authorized to pick up the TV signal.
Terrence Luddey, director of security for a division of General Instruments in San Diego that is one of the prime suppliers of scrambling technology the cable industry, was called in by police to look over Bejerano and Sarango’s handiwork. He called it “very sophisticated.”
Luddey said Bejerano and Sarango removed circuit boards from legal satellite decoders, altered the one computer chip that contains the signal access code, then “reprogrammed the computer chip and reinserted it back into the board.”
The idea is to find an access code for a satellite dish customer who is paying for the cable programming, Luddy said. A cable pirate clones a computer chip with the same access code and installs it in another decoder.
Most of the undercover work on the Bejerano-Sarango case was done by Tom Sheil, an investigator for the Motion Picture Assn. of America. According to Frawley, Sheil called Sarango and said he was interested in buying a satellite dish and Sarango told him that it was possible to “fix you up with a descrambler. Pay one price and get everything.”
Posing as Buyer
So Sheil, with the cooperation of Simi Valley police, posed as a local homeowner and agreed to buy a satellite dish with all the illegal trimmings. Both Sarango and Bejerano showed up to close the deal with Sheil. After some last-minute dickering, Frawley said, Sheil agreed to buy a fancy satellite dish from them for $3,150 and, for another $1,150, he would buy their doctored satellite decoder.
The one caveat, Frawley said, was that Sheil was told that he’d have to pay for the $1,150 decoder in cash. Sheil duly paid it out, mostly in $20 bills, Frawley said, and Bejerano and Sarango were arrested in February, 1988.
After getting search warrants, police hunted through Bejerano’s store and went through Bejerano and Sarango’s homes, finding a variety of illegal satellite gear and computer chips essential for rigging a decoder, Frawley said. He said police also found $25,000 in cash in Bejerano’s home.
Although satellite dishes can be pirated, Luddey said homes already wired for cable make even easier targets.
But cable companies vary in how they cope with cable pirates. Cox Cable in San Diego has a 13-member investigative unit that actively hunts for cable theft in its territory, including using street patrols that look for unauthorized taps on cable lines and following up on tips that somebody has an illegal descrambler in his home.
Last year, the company says it hauled in $126,000 in unpaid fees from cable customers who were pirating signals.
But Christenson at United Cable says his company doesn’t bother with a serious anti-piracy campaign. “You have to weigh how much it costs,” he said.
Then there is the matter of overcoming public sentiment. Frawley said he had a tough time picking a jury for the Bejerano case.
One potential juror “had drawn up his own plans for a blueprint on how to make a descrambler,” Frawley said. “I asked a lot of people what they would do if they were offered an opportunity to get free signals, and they said they would do it. It’s so prevalent, it’s tough to get people to agree to follow the law.”