I'm not sure but I know enough cryptographic theory to take a guess.
There is no two way communication going on outside of your telephone call.
This is just guess based on how I would do it but it is pretty straightforward. I may be wrong but this would seem to be the simplest way.
The satellite broadcasts channels digitally encrypted. Lets call it CHANNEL_1. Lets say it requires KEY_A to decrypt. You can not decrypt these channels without the secret key, KEY_STATION.
Your satellite radio receiver has a serial number and a secret key associated with it. Lets call it KEY_RECEIVER.
You call up the satellite company, you tell them your serial number and they look up KEY_RECEIVER associated with it.
(There may be some variation of the following but this would be the gist of it.) They also have a public radio channel that goes through all the receivers that are subscribed and tells them the secret key. Lets call this CHANNEL_2. So this channel goes one by one and telling, "Hey, radio serial number xxxx, Listen Up. Here is the key for the station KEY_STATION, but first I'm going to encrypt it with your specific key, KEY_RECEIVER, so you are the only one who can decrypt this key addressed specifically to your unit.
So KEY_STATION is wrapped inside KEY_RECEIVER. I guess it would take about 6 minutes to loop through all of the satellite radio receiver serial numbers and key information, which would explain the lag time.
So your radio receiver never actually talks to the satellite, it just listens. But this way they transmit the secret key to unlock the station just to you and the people who paid for it by only sending it in a way that only the people who paid for it can receive it.
They probably change the KEY_STATION pretty regularly and if you keep paying the bill they will keep broadcasting to your receiver the current KEY_STATION but if they stop paying they can take your receiver and its key out of the public channel.
Of course that is just a basic guess from my limited knowledge of cryptography but that is how I would do it.
- Person Calls Satellite Company and tells them Radio Receiver Serial Number
- Satellite Company looks up KEY_RECEIVER from database
- Satellite wraps KEY_STATION in KEY_RECEIVER to make ENCRYPTED_BLOB
- Satellite sends out Attention Radio Receiver Serial Number here is ENCRYPTED_BLOB
- Radio Receiver takes ENCRYPTED_BLOB and uses KEY_RECEIVER to decode it to get the original KEY_STATION
- Radio Receiver takes KEY_STATION to tune into the desired station and decrypt that.