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A system based on sequential decoding and utilizing binary phase-shift keying and 8-level quantized decisions is proposed for deep-space communication. Theoretical analyses augmented by a program of computer Simulation promise operation within 3-4 dB of the channel capacity of an infinite bandwidth additive white Gaussian noise channel. A low probability of erasure is achieved by the suggested use of occasional off-line decoding. A negligible probability of error is readily achieved. Channel coherence is examined and quadratic and decision-directed methods of achieving a phase reference are compared. Extensive symbol interleaving is suggested and an analysis included of the required phase reference signal-to-noise ratio.