## 1. Introduction

[2] Electromagnetic induction studies with satellite magnetic data may ultimately provide important new constraints on the electrical conductivity of Earth's mantle. In contrast to the spatially sparse geomagnetic observatory data, which provide the basis for most of our present knowledge about deep Earth conductivity [e.g., *Banks*, 1969; *Olsen*, 1998; *Fujii and Schultz*, 2002], data from a satellite cover the Earth completely over the course of some months. However, at any fixed time, sampling by a polar orbiting satellite is restricted to a single meridian. Interpretation of the time varying external fields in terms of Earth conductivity thus requires simplifying assumptions about the longitudinal structure of external sources. Most studies to date [e.g., *Olsen*, 1999; *Constable and Constable*, 2004] have assumed that long period external magnetic variations are due to a symmetric magnetospheric ring current, and are hence describable on the Earth's surface by an external geomagnetic axial dipole *Y*_{1}^{0}. This simple model would appear to be supported by the observation that on the Earth's surface geomagnetic variations for periods beyond about 5 days are very well approximated (at least at mid-latitudes) by a *Y*_{1}^{0} source [*Banks*, 1969; *Fujii and Schultz*, 2002]. However, this conclusion is based on geomagnetic observatory data, which are sampled in a reference frame that rotates with the Earth. Non-axisymmetric source structure of degree *n* will result in variations of frequency *f* ≈ *n* cycles per day (cpd) in this rotating frame, so any low frequency (*f* ≪ 1 cpd) variations observed in the Earth's frame will inevitably be nearly zonal.

[3] In fact it is well known that magnetospheric current systems are not symmetric with regard to the Earth's rotation (or geomagnetic dipole) axis [e.g., *Campbell*, 1997; *Daglis and Kozyra*, 2002]. For example, recent quantitative models of magnetospheric fields [*Tsyganenko*, 2002] incorporate a partial ring current which is driven by azimuthal variations of plasma pressure, and closes via Birkeland currents through the auroral ionosphere. It would thus be somewhat surprising if the resulting magnetic variations seen by a near-Earth satellite were purely zonal at any period. Indeed, *Constable and Constable* [2004] found significant differences between amplitudes of long period variations inferred from dawn and dusk Magsat passes, clearly showing that there is significant non-axisymmetric structure in the source fields. In this paper we show that estimates of induction transfer functions (TFs) obtained from CHAMP scalar data under the *Y*_{1}^{0} source assumption depend systematically on local time (LT), and are thus significantly biased by these non-axisymmetric currents. Extending the simplest *Y*_{1}^{0} source model to include a quadrupole (*Y*_{2}^{1}) source term that is temporally varying, but spatially fixed in a magnetospheric frame, qualitatively explains the observed LT effects.