Abstract: Processing payload systems are in development now and will soon be part of the satellite communications landscape. This paper shows that processing payload networks can revolutionize the VSAT market. VSAT service providers who recognize the tremendous potential of these systems will be able to offer a dramatically lower‐priced solution to their customers while realizing even greater profits than were possible with transponder‐based networks. The ability to provide full mesh connectivity, dynamic resource allocation, and statistical multiplexing of diverse traffic results in lower costs for existing VSAT networks and an easy migration path for these networks to expand their capacity, connectivity, and range of applications. The results demonstrate that processing payloads represent a superior solution for both today's VSAT networks and for the more sophisticated applications and network topologies inevitable in the future.