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It was very nice to see my story about the riding high in the "most read" list of stories on Tuesday, but I'm not so naive as to think this was just because of my incisive writing.

The truth is that a headline which reads "" is going to attract readers looking for information on a chap called and a relentless crowd of killer robots.

But I hope these "misdirected" visitors will have stuck around long enough to learn something new about the UK's biggest space project.

The goes back to 1969 - long before it was used to describe the self-aware computer system in The Terminator movie franchise.

In its latest guise, the satellite system is absolutely top-notch, and incorporates a range of leading technologies (some of them classified) to provide a secure, high-bandwidth voice and data transmission to UK forces across the globe.

What has attracted much attention, however, is the way the Skynet 5 system was set up and funded.

In a standard procurement, the Ministry of Defence would have bought the entire programme - from the satellites in the sky to the control centres on the ground, including the antennas on ships and dedicated vehicles.

But Skynet 5 is a . Instead of buying the system outright, the MoD merely buys a telecommunications "service" sold to it by a company called .

It is Paradigm which has commissioned the satellites and the ground infrastructure and paid for it through City loans.

Paradigm has taken on the risk, but it makes this all work by charging the MoD more than £200m a year for its service. This is guaranteed income from a contract that runs now until 2022.

And although the MoD is entitled to most of the capacity on the satellites, any spare bandwidth can be sold to "friendly forces".

This is a gain-share arrangement that enables Paradigm to boost its income further, and for the MoD to earn a bit on the side which might just limit the eventual total cost of the PFI - calculated at one stage to be £3.6bn by the National Audit Office.

All of which makes Tuesday's announcement very interesting.

The Skynet 5 system was initially supposed to comprise just two satellites. But when the build was initiated a number of rocket failures sent insurance prices spiralling and it was decided that it would be cheaper simply to build a third satellite than pay an over-the-top premium for the first two.

By the time the Skynet 5A satellite arrived at the launch pad in 2007, its Ariane 5 launcher had got past its technical woes and had become a highly reliable, very accurate rocket.

All three Skynet platforms - 5A, 5B and 5C - went into orbit without a hitch. Not only had Paradigm and the MoD saved themselves a packet on insurance, they had a huge amount of capacity on orbit.

But even as the third satellite was climbing into the sky, discussions were under way about pulling together components held in reserve to make a fourth satellite. Tuesday's announcement was the decision to go ahead with 5D, again financed by City money.
The key driver here is the data-hungry military machine. You've probably seen pictures of in the US remotely piloting Reaper drones flying over Afghanistan. All that video goes through Skynet and the Super High Frequency (SHF) "data pipe" needs to be extremely wide.

UHF (Ultra High Frequency) is also a big draw right now. The frequency supports "comms on the move". It is voice communications in forward deployments - SAS soldiers with backpack radios, that kind of thing. The MoD wants more of it and Paradigm can't sell enough to its third-party customers.

The new Skynet 5D satellite will therefore be reconfigured to increase its UHF capacity.

PFIs don't always get a good press. We've all heard the stories where it's gone wrong in the building of schools and hospitals. But clearly something must be going right with Skynet if all the sides in the deal - MoD, Paradigm and City financiers - want to build a new satellite so soon after launching the first three.

The success has prompted many to wonder whether the model could also now be applied to other space activity in the UK, and I've spoken before about the suggestion of a national Earth Observation PFI dubbed "Skysight".

As with Skynet, this Skysight programme would have the UK government as its "anchor tenant". The difference would be that government would be purchasing Earth imagery not bandwidth. And as with the Skynet model, spare capacity on the system would be sold to third parties.

There are other key differences, as well. Skynet is relatively simple in that there is one big customer within government - the MoD; whereas with Skysight, the demand would be spread across a range of departments - from environment and international development, to foreign and home offices.

The major benefit is that the UK would have an independent capability and British industry would get to build a new fleet of spacecraft, creating lots of highly skilled jobs - not just in satellite manufacturing but in support areas such as image processing.

We will see the government give its response to the before the month is out. Expect to see in that response some sort of commitment to study Skysight.

Incidentally, although Paradigm currently owns the Skynet satellites and their associated infrastructure, at the end of the contract all the assets are passed to the MoD for the sum of £1.

Watch this space (or "I'll be back", whichever you prefer)

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