The Missing Link in Satellite Communications

By Deering, Ann M. | Risk Management, October 1990 | Go to article overview

The Missing Link in Satellite Communications

Deering, Ann M., Risk Management

The Missing Link In Satellite Communications

A severe hurricane knocks out several satellite communications stations throughout the Southeastern United States. The transmission of information from all over the globe - stock trades, ATM transactions, inventories, shipping instructions - that thousands of area businesses depend on ceases. For some businesses, particularly those without the foresight to have a backup, getting the information flowing again and the downtime until that happens can cost millions of dollars.

Although hypothetical, this situation, or even worse a satellite failure in orbit, can easily occur, especially as more companies rely on satellites to help them transact business. Satellites have been used for nearly two decades for international broadcasting and telephony; however, business applications, such as data exchange and teleconferencing, are just emerging. Already, several hundred companies have networks in place, including K mart Corp., Farmer's Insurance Group, Cargill, Days Inn of America, Domino's Pizza, EDS Corp., Frito-Lay, Prudential Bache and Chrysler Corp.

As with terrestial, or ground-based, communications and any new technology, there are several unique risks associated with satellite communications. Satellite users and their risk managers must become familiar with the technology and the risks it poses, how to quantify and avoid the financial consequences of a network failure and how to design a contingency plan that would allow the company to continue operating under adverse conditions.

Unfortunately, as with many other developments, the risk manager is often among the last employees to know that his or her company has embarked on a venture into the world of satellite communications. Yet the risk manager should be involved in the company's satellite communications program before it gets off the ground, beginning with the initial stage of network design. He or she should interact with engineering, legal and financial personnel to identify and help eliminate potential risks. Those risks that cannot be eliminated should be quantified and, in many cases, transferred contractually prior to the signing of equipment sale, lease and service contracts. Furthermore, the risk manager should anticipate network outages by spearheading the development of a disaster recovery plan, which he or she will implement when necessary, and obtain transponder failure insurance to cover potential business interruption and extra expense exposures.

Assessing Risk

Many companies that purchase equipment and services from satellite operators for the first time are unfamiliar with the risks associated with spacecraft and earth station technology. As they switch to satellite-based systems, they must be aware of the various types of network failures that may occur.

Though rare, transponders and satellites have failed after satellites are operating in orbit. Earth-related satellite problems include failure of the master hub earth station or multiple remote earth stations and signal interference due to poor weather conditions or other terrestrial communication systems. Failures resulting in space include problems with one or more transponders and satellite subsystems, temporary or permanent failure of part or all of the satellite and interference from other satellites.

Whether or not a company has an exposure and the extent of the exposure depends on several factors such as the type and duration of the outage, nature of the satellite application, the availability of alternative communications methods, including terrestial systems, and the contractual obligations for service restoration with the satellite service provider.

Transferring Risk

Satellite users rely heavily on information supplied by service providers regarding equipment and system reliability. Users can contractually define the service provider's obligation to maintain satellite equipment at a specified level of service.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)


1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

Cited article

The Missing Link in Satellite Communications


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.