The Global Positioning System (GPS) is a world-wide 24 hour navigation positioning system operated by the US Department of Defence. It consists of a Ground Control Segment, a Space Segment and a User Equipment Segment. The User equipment segment is what is commonly known as a GPS receiver.
24 earth-orbiting satellites in six different orbits form the Space Segment . (There are also 3 or 4 operational spares in orbit at any one time.) Each satellite circles 10,900 nautical miles above the earth in orbits inclined at an angle of 55 degrees to the equator. Each satellite transmits precision timing signals (derived from onboard atomic clocks) on two frequencies, L1 and L2. A separate channel on each frequency is dedicated to each satellite.
The navigation messages broadcast on the L1 frequency contain two codes, one for civilian use, and another encrypted code for military use. The L2 broadcast contains a second set of navigational messages, which when combined with the encrypted code in the L1 frequency, can resolve positions to less than 20 meters. Known as the Precise Positioning Service (PPS), this service is available only to the US
The non-encrypted codes in the L1 frequency, (available to civilian users), provide the Standard Positioning Service (SPS).
When GPS was in its initial testing phases it was found that this service provided position fixes that were far more accurate than was originally intended, so SPS accuracy was intentionally degraded by the introduction of random errors in the timing signal--reducing the position fixing accuracy of GPS to 100 meters 98% of the time. This intentional degradation of the timing signal was known as Selective Availability (SA), and constituted over half the total GPS error prior to May 1, 2000. (The satellite clock need only be "dithered" by a few millionths of a second to create the desired effect. That is why, in spite of SA, GPS time is the most accurate clock you will have on board your vessel.)
However, recognizing the importance of GPS to the civilian economy, the United States Government removed Selective Availability on May 1, 2000. Now the single largest contributor to GPS error is interference with the broadcast signals caused by the ionosphere (a shell of electrically charged particles that surrounds the earth.) Now a GPS position is expected to be accurate within 20 meters.
Each satellite also broadcasts "Almanac" and "Ephemeris" messages. Your earthbound GPS receiver uses the almanac to determine which satellites are above the horizon and what channels they are broadcasting on. The receiver then locks on to the most appropriate satellites for fixing a position. Given the exact time the navigation message was broadcast, and knowing the time it was received, the GPS receiver determines the amount of time it takes for the coded signal to travel from the satellite to your antenna. From there it is a simple computation to determine the actual distance between the satellite and your GPS antenna.
From this point, the GPS receiver calculates a position in the same way as a human navigator using radar ranges. The ephemeris message tells the receiver the exact location of the satellite when the message was broadcast, and since the receiver now knows the distance to the satellite, it calculates that it must be on the surface of an imaginary sphere, centered on the satellite. Where that sphere intersects with the surface of the earth, a Circle of Position ( COP) is formed.
From two satellites the receiver calculates two COP's, which cross at two possible positions. To determine which position is the correct one, a third satellite range is needed. Thus, for a receiver at sea level, a minimum of three satellites are needed to determine a two-dimensional position. For aircraft, and vehicles on land, which operate above sea level, a fourth satellite is needed to determine a three-dimensional position (including altitude).
