Who's Hacking Whom: There is a big underground market for pirated pay-TV. Basically, hackers figure out how to break the encryption on a pay-TV signal and then sell you a cheap card that slips into your set-top box which allows you to watch the signal for free (similar to pirating cable). Canal Plus, a division of media giant Vivendi and one of Europe's biggest pay-TV providers, has brought suit against NDS, another digital cable provider and mostly owned by Rupert Murdoch's News Corp (meaning Fox).

According to the complaint, Canal Plus became aware that counterfeit smart cards were being distributed in late 1999. The company investigated and "was shocked," according to papers it filed with the court, when the trail led straight back to NDS.

The investigation was carried out by Canal Plus technicians who developed contacts within the hacking community, according to a report in The Wall Street Journal.

Tips provided by the hackers indicated to Canal Plus that NDS had an Israeli lab crack the technology that was used in the smart cards. The company then distributed information on how to create or alter the smart cards on the Digital Reference website.

They are bringing a RICO suit which allows for all sort of lucrative damages. The latest is that hackers are sitting back and laughing at the two giants going after each other.

Meanwhile, TV hackers, who try to find ways to get fee-based TV services for free, claim it's not unusual for companies to leak details of competitors' security systems...

TV pirates also claim that the security systems of most smart cards, including Canal Plus' product, don't present a cracking challenge and can be successfully hacked without corporate funding or encouragement...

All of the pirates were puzzled by the digital TV companies' lack of interest in their activities, claiming that all the money and time that will be invested in Canal Plus' lawsuit could probably put a serious dent in the piracy industry.

The truth is out there. Or is it?