A brief summary of the principal features of waveguide characteristics is given and with the help of the main conclusions a system assessment is carried out. The effect of attenuation and dispersion is discussed and a new approach to mode conversion-reconversion phenomena is proposed, by treating the phenomenon as a form of noise.Criteria for repeater spacing and their characteristics are examined in the light of the modulation system used. It is shown that for short-distance applications there are a number of possible modulation systems, but that for long distances only quantized systems can be considered; of these only pulse-code modulation has received any detailed attention, but the analysis given is applicable to any quantized system.It is shown that it is not necessary to use perfect regenerative repeaters, but if repeaters incorporate non-linear amplifiers such that the random amplitude and time jitter can be decreased by a factor of about two there will not be any limitation on the overall circuit length. Design criteria for such amplifiers are given.