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A prominent technique, for reducing the effect of phase-induced intensity noise (PIIN) in spectral-amplitude-coding optical code-division multiple-access (SAC-OCDMA) systems, is proposed. In this technique, each user is assigned two orthogonal code sequences, selected from a minimum cross-correlation code set. In addition, two-level M -ary pulse-position modulation (MPPM) scheme is adopted, where each level corresponds to a code sequence. This technique decreases the effect of PIIN and allows transmission at high data rates. The bit error rate (BER) of the proposed system is derived, taking into account the effects of PIIN, shot noise, and thermal noise. Two performance measures of this system, namely the BER and maximum achievable number of users, are compared to that of traditional systems adopting complementary and non-complementary keying. Our results reveal that the proposed technique allows each user to transmit at high data rates, compared to traditional techniques, while keeping the BER well below a prescribed threshold. Finally, our results are extended to higher levels of MPPM schemes with multicode modulation.