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The standard pulse-code modulation (PCM) telemetry system for a Skylark sounding rocket provided insufficient bandwidth for the high data rate expected from a new, exceptionally large, X-ray astronomy experiment. Several methods of data compression were used to cope with the erratic variability of the chosen source to maximize the returned information. A computer program simulation was used to optimize the variable parameters included in the electronic design to the expected variability of Cygnus X-1 the target X-ray source. The system performed exactly as intended during the actual flight.