Abstract: Apparatus and method for signaling within a drill hole without disturbing an ongoing drilling operation. High data rates are achieved by using phase and/or amplitude modulation techniques which enable information transfer rates well in excess of the data bit rates being transmitted. The modulation technique provides a multi-level signal which makes optimum use of the amplitude/phase space available. The ability of the invention to substantially increase the carrying capacity of the communication channel is based upon the dispersive characteristics of electromagnetic propagation in a bore hole, wherein the lower frequencies propagate at a slower velocity, and with less attenuation than the higher frequencies.