In this paper, different aspects of the application of the second‐order ionospheric term (abbreviated as I2) and its impact on geodetic estimates are studied. A method to correct the GPS observations from this effect is proposed. This method provides a more accurate correction to the GPS measurements (in some cases, it can even be 50% better) with respect to other ways of computing such effect. Moreover, this method can be applied routinely to estimate geodetic parameters. Applying the I2 correction to subdaily differential positioning, several relationships between the deviation of the parameter estimates and the I2 term are derived in the context of a new global approach to the problem. In particular, it is shown that the effect in receiver position mainly depends on the differential value of this term between GPS receivers, while the satellite clocks are directly affected by the undifferenced values. Data from the International GNSS Service (IGS) global network of receivers have been gathered over a period of 21 months. These data have been used to study the I2 effect on the geodetic estimates, such as receiver positions, satellite clocks, and orbits. The most important effect appears for the satellite clocks, and it can be greater than 1 cm depending on the geographical location, comparable to the IGS nominal accuracies. The effect on orbits consists of a global contribution of several millimeters (which confirms the geocenter displacement detected by other authors) plus a subdaily contribution, also of several millimeters, that is geographically dependent, also comparable to the IGS nominal accuracies. As for the position of receivers, the obtained shifts are, in general, at submillimeter level and are directed southward for low‐latitude receivers and northward for high‐latitude receivers. These results will be explained in detail since they are not completely in agreement with the ones presented in previous works.