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The purpose of this paper is to consider the theoretical error performance of several digital formats suitable for use with a mode-locked laser source, to discuss the problems of implementing these formats, and to consider the design of an illustrative system. Several techniques for time multiplexing are also described. It is assumed that the transmission medium introduces only additive noise and that the detection process is signal shot noise limited. Among the formats examined the practical choices which can achieve highest information rates with lowest probabilities of error are binary, differential phase shift keying, and binary pulse position modulation. For purposes of illustrating state-of-the-art performance the design of a 4000-mile repeatered binary pulse code modulation intensity modulated system is outlined.