This paper proposes a dynamic spectrum controlled (DSTC) channel allocation algorithm to increase the total throughput of satellite communication (SATCOM) systems. To effectively use satellite resources such as the satellite's maximum transponder bandwidth and maximum transmission power and to handle the propagation gain variation at all earth stations, the DSTC algorithm uses two new transmission techniques: spectrum compression and spectrum division. The algorithm controls various transmission parameters, such as the spectrum compression ratio, number of spectrum divisions, combination of modulation method and FEC coding rate (MODCOD), transmission power, and spectrum bandwidth to ensure a constant transmission bit rate under variable propagation conditions. Simulation results show that the DSTC algorithm achieves up to 1.6 times higher throughput than a simple MODCOD-based algorithm.