The advancement in satellite networks (SatNets) offers vast opportunities for large-scale connectivity and flexibility. The intersection of inter-satellite communication (ISC) and the developments in rate-hungry enhanced mobile broadband (eMBB) services have resulted in potential ultra-dense deployments such as mega-constellations. The integration of inter-satellite links (ISL) with high spectrum bands requires a well-defined channel model to anticipate possible challenges and provide solutions. In this research, we address the key concerns for defining SatNets channels and establish a comprehensive node-to-node ISL channel model for the Markov state model. The model takes into consideration satellite mobility, celestial body radiation, and cumulative thermal noise. Using this model, we analyze the bit error rate, outage, and achievable capacity of various ISC cases and propose a state-based power allocation method to improve their performance.