FSS operators use satellites that are located in designated GEO slots 22,300 miles above the equator. The position of these satellites makes them appear to be at a fixed point above the earth. Receiving antennas, once pointed at a fixed satellite, need not be moved.

GEO slots are points on the GEO arc where satellites are permitted to operate. The number of orbital slots is limited. The right to use a GEO slot must be authorized under national and international regulatory regimes for the frequency bands in which a satellite will operate, and satellites operating in the same frequency bands must be sufficiently far apart to avoid interference with one another. Certain slots may not provide coverage over an entire market. Other slots may not be available for all of the frequency bands needed to make the slot commercially viable. Satellites operating at adjacent GEO slots at similar frequencies are generally separated by two or more degrees. Most of the GEO slots are either currently in use or already subject to filings for use. Once the particular frequencies at a GEO slot have been licensed and coordinated, the use is protected against interference from other operations at the same or adjacent slots.

The most important aspect of a GEO satellite is its ability to provide equally accessible coverage of a very large geographic area at once, in certain circumstances up to an entire hemisphere. Any antenna on the ground inside the satellite coverage area, or footprint, can receive the same transmission, and can be installed for the same incremental cost. GEO satellites receive radio communications from one or more origination points and distribute them to a single point or multiple receivers within the transmission range of the satellites' beams.

Through FSS, the Company lease transponder capacity to customers for various applications, including broadcasting, news gathering, Internet access and transmission, private voice and data networks, business television, distance learning and DTH and provide TT&C and network services to customers.

Through G2, the Company provide global satellite and related telecommunications services to the U.S. government, international government entities, and their contractors.

The Company provides satellite transponder capacity and other satellite and terrestrial services for the transmission of entertainment, news, sports and educational programming for over 300 content providers worldwide. The Company’s video services are comprised of four categories: Video distribution services, DTH television services, Full-time contribution services and Occasional use services.

The Company provides satellite transponder capacity and other satellite and terrestrial network services to telecommunications carriers, multinational corporations and network service providers for relaying voice, video and data communications globally. The Company’s network services are comprised of three categories: Private business network services, Internet services and Carrier services.

The Company’s G2 segment provides global satellite and related telecommunications services to the U.S. government, international government entities and their contractors. Through its G2 segment the Company provides a "one-stop shopping" resource for government customers to obtain satellite bandwidth, ground terminals and related services, either as stand-alone components or as a complete, end-to-end service offering. The Company offers transponder capacity on its satellites as well as other mobile and fixed satellite systems.

Total operating costs and expenses increased by $293,726 thousand to $689,980 thousand at September 30, 2004 from $396,254 thousand for the nine months ended September 30, 2003.

Income (loss) from operations decreased by $287,805 thousand to ($70,630) thousand at September 30, 2004 from $217,175 thousand for the nine months ended September 30, 2003.