Abstract: A communication system for simultaneously transmitting ancillary codes and audio signals via a conventional audio communications channel using perceptual coding techniques is disclosed. An encoder monitors an audio channel to detect "opportunities" to insert an ancillary code such that the inserted signals are masked by the audio signal, as defined by the "perceptual entropy envelope" of the audio signal. An ancillary code containing, for example, an ID or serial number, is encoded as one or more whitened spread spectrum signals and/or a narrowband FSK ancillary code and transmitted at a time, frequency and/or level such that the data signal is masked by the audio signal. A decoder at a receiving location recovers the encoded ID or serial number.