Smart card piracy involves the illegitimate use of conditional access smart cards, in order to gain, and potentially provide to others, unauthorised access to pay-TV or even private media broadcasts. Smart card piracy generally occurs after a breach of security in the smart card, exploited by computer hackers in order to gain complete access to the card's encryption system.
Once access has been gained to the smart card's encryption system, the hacker can perform changes to the card's internal information, which in turn tricks the conditional access system into believing that it has been allowed access, by the legitimate card provider, to other television channels using the same encryption system. In some cases, the channels do not even have to be from the same television provider, since many providers use similar encryption systems, or use cards which have the capacity to store information for decoding those channels also. The information on how to hack the card is normally held within small, underground groups, to which public access is not possible. Instead, the hacking groups may release their hack in several forms. One such way is simply to release the encryption algorithm and key. Another common release method is by releasing a computer program which can be used by the smart card user to reprogram their card. Once complete, the now illegally modified smart card is known as a "MOSC." (Modified Original Subscriber's Card). A third such method, more common in recent times, is to sell the information gained on the encryption to a third party, who will then release their own smart card, such as the K3 card. This third party, for legal reasons, will then use a fourth party to release encrypted files, which then allow the card to decode encrypted content.
Along with modifying original cards, it is possible to use the information provided by the smart card to create an encryption emulator. This, in turn, can be programmed into a cable or satellite receiver's internal software, and offered for download on the internet as a firmware upgrade. This allows access to the encrypted channels by those who do not even own a smart card. In recent times, many underground forum websites dedicated to the hobby of satellite piracy and encryption emulated Free To Air (FTA) receivers have been set up, giving up to date information on satellite and cable piracy, including making available firmware downloads for receivers, and very detailed encryption system information available to the public.
Upon gaining the knowledge that their system has been compromised, the smart card providers often have several counter measure systems against unauthorised viewing, which can be put in place over the air, in most cases causing virtually no disruption to legitimate viewers. The simplest form of counter measure is a key change. This simply halts viewing for those viewing without authorisation temporarily, since the new key can easily be accessed in the hacked card, and implemented. There are often other more complicated procedures which update a part of the smart card in order to make it inaccessible. These procedures can also, however, be hacked, once again allowing access. This leads to a game of "cat and mouse" between the smart card provider, and the hackers. This, after several stages of progression, can leave the smart card provider in a situation where they no longer have any further counter measures to implement. This leaves them in a situation where they must perform a card and encryption change with all legitimate viewers, in order to eliminate the viewing of the service without permission, at least for the foreseeable future.
Such has been the success of implementing new smart card systems, that another form of smart card piracy has grown in popularity. This method is called card sharing, which works by making available the smart card decoding information in real time to other users, via a computer network. Police monitoring of unsecured card sharing networks has led to prosecutions.
Virtually every common encryption system is publicly known to have been compromised. These include Viaccess, Nagravision, SECA Mediaguard and Conax. The MediaCipher system, owned by Motorola, along with Scientific Atlanta's PowerKEY system, are the only digital TV encryption systems which have not publicly been compromised. This is largely thanks to there being no PC card Conditional Access Modules (CAMs) available for either encryption system.
Despite the unauthorised decryption of media being illegal in many countries, smart card piracy is a crime which is very rarely punished, due to it being virtually undetectable, particularly in the case of satellite viewing. Laws in many countries do not clearly specify whether the decryption of foreign media services is illegal or not. This has caused much confusion in places such as Europe, where the proximity of many countries, coupled with the large land mass covered by satellite beams, allows signal access to many different providers. These providers are reluctant to pursue criminal charges against many viewers as they live in different countries. There have, however, been several high profile prosecution cases in the USA, where satellite dealers have been taken to court resulting in large fines or jail time.