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one of our instructors mentioned that the United States reduces the precision of the information supplied by their satellites for security and military reasons. Some GPS equipments, while the last war in Iraq, gave erroneous position readings of about 400m. It seems that it depends of each equipment. Some of them, specially some models mounted in cars, can correct such errors using "alternative ways", based in the known speed and an internal electronic compass.
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One of the alternative ways is a Differential Global Positioning System. A Differential Global Positioning System (DGPS) is an enhancement to Global Positioning System that uses a network of fixed, ground-based reference stations to broadcast the difference between the positions indicated by the satellite systems and the known fixed positions. These stations broadcast the difference between the measured satellite pseudoranges and actual (internally computed) pseudoranges, and receiver stations may correct their pseudoranges by the same amount. The correction signal is typically broadcast over UHF radio modem.