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sale terminal is also protected by a chip card, called a Security Access Module (SAM), which is used by the merchant. The user chip card protects against fraudulent customers, while the merchant chip card protects against fraudulent merchants.

The local architecture of the network is the link between the merchant system (i.e. the point-of-sale terminal) and the office of another participant to the system, called the acquirer. The role of the acquirer is to get the information of the chip card and route the proper financial information to the institution that has provided the chip card to the consumer. That institution is called the issuer of the chip card.

Original television networks were broadcast over the air in such a way that anybody with a television set was able to capture the signal. The revenues of the television broadcaster came from advertising or other resources directly received as the source, so there was no need to secure anything to protect the financial flows. In the 1980’s, the idea of providing private television channels caught on, whether through fixed lines (“cable”) or over the air. In both cases, the business case for providing the service required that the signal would only be decoded by the person having paid the associated dues. Again, the trusted smart card would become a key component of such systems. However, the case of encrypted signals over the air became a new capability to be provided by the cards, since the communication channel was one-way only, from the emitting station to the television set, with no return signal. No mutual authentication was possible. By this, we mean that it was possible for the user smart card to authenticate that the signal was indeed coming from the right broadcast station, and to use the proper decryption keys, but it was not possible for the broadcast station to know which user was actually viewing the channel. From a technological standpoint, this makes the feat of encrypted programming a very difficult task, because anyone can capture the encrypted signal and then try to decrypt it. This is a process with a good chance of success because the signal was, by necessity, encrypted by general means. This created a race between system implementers and hackers that continues to this day.

Within these television systems, the closed network is comprised of a decoding box and a smart card containing user parameters as well as other information that must be kept secret. If you have cable television or satellite television at home, the smart card is inside the box that your provider delivered at the initiation of the service. The local network is the link between the decoding box and the cable operator, in case of wired communications, or the broadcaster, in case of communication over the air. At the time of this writing, television networks have not evolved to global, roaming agreements like those found in telecommunication and banking. We’ll see shortly that this will probably happen in a very different setup.

Convergence

For as long as a phone was a phone, a merchant terminal a merchant terminal, and a television a television, dedicated industrial networks were perfectly suited to the tasks of their domain. However, things started to change when personal electronic devices started using protocols of general computer networks, like the universal serial bus and, as we saw before, Internet. Mobile handsets added capabilities by connecting to components of general use, for example memory cards, and Internet browsers. Similarly, merchant terminals started to be based on personal computer technology instead of specialized circuitry. And, as cable companies started to provide Internet services on top of their traditional television services so that their customers could browse the Web at home, we began to see companies in turn wanting to provide television services on top

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