It's not surprising considering age of Iridium. Also I believe they don't make lot of money, so any development (also security related) is pretty much ceased.
Which I'm sure they're selling at absurd prices thanks to Sept 11.
Editorial retraction, mea culpa, #2 [conflated the hell out of ARSOF, again, see below. The economic analysis + usage of Iridium still holds.] C-37 is USAF aircraft - this dude seriously compromised his personal security by making this talk [and implicitly, his identity] public. He's going to have the pleasure of having SSSS scribbled onto every airline ticket he purchases from now on, I'd wager.
Iridium was such a brilliant buy. ROI at must be absolute insanity.
@Dasmoth - 64 billion dollars in grey-money was allocated for "Overseas Contingency Operations" by the Omnibus bill last December. I'm sure SAIC/Northrup/whoever gets the contract to 'fix this hole' is going to be enjoying the 800 million they secure from the Pentagon to basically modify transmissions/upgrade the firmware of the phones to use Diffie-Hellman handshakes and AES haha.