The scheme is based on band-spreading in a coherent transmission system and a receiver that operates at the quantum limit of coherent detection. A pseudo-random cipher-stream is used to band-spread an optical carrier with coded data. A legitimate receiver can use the agreed upon key to modulate its local oscillator to uncover the band-spread signal and as resultantly decipher the message. Meanwhile, an eavesdropper without a key will find the spread signal with too low signal-to-noise ratio to perform any useful determination of the message sequence.
The receiver must be operating at or near the quantum limit to prevent successful interception and demodulation by an eavesdropper. While a classical stream cipher system may not be secure due to the large amount of ciphered text available to the analysts, the proposed scheme forces an adversary, without the key, to detect a much larger bandwidth of noise with power at least as large as the irreducible quantum detection noise. The differential signal-to-noise ratios between the user and the eavesdropper yield a Shannon Secrecy Capacity which can be made as close to the capacity of the user channel. Moreover, the system purposefully introduces errors into the transmitted data sequence so the communication system is operating just shy of capacity of the semi-classical white Gaussian noise channel, resulting in a highly secure scheme.