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In recent literature the advantages of an idealized narrow-width pulse-position modulated (PPM) optical communication system, using coherent sources and direct photodetection, have been shown. In this paper the practical design of such an operating PPM link is considered. System performance in terms of error probabilities and information rates is derived in terms of key parameters, such as power levels, number of PPM signals, pulse width, and bandwidths. Both background radiation and receiver thermal noise are included. Design procedures utilizing this data are outlined. Whenever possible, optimal design values and parameter tradeoffs, in terms of maximizing information rate or minimizing transmitter power, are shown. The effect on performance of photomultipliers and their inherent statistics is also presented. Although the basic analysis is derived in terms of photon "counts," the necessary system optics equations are introduced to allow for overall optical hardware design. The primary underlying assumption is that synchronization is maintained at all times between the transmitter and receiver.