Abstract: A downhole telemetry system for use in a wellbore including borehole fluid. The system includes a stator including flow channels though the stator and a rotor including flow channels though the rotor. The rotor is rotatable on a drive shaft by the force of the borehole fluid flowing through the rotor. The rotation of the rotor creates pressure variations in the borehole fluid related to the movement of the rotor channels relative to the stator channels, thus forming a carrier wave. A regulating system adjusts the amount of fluid force on the rotor for a given flow rate of borehole fluid to maintain the frequency of the carrier wave within a range of a target frequency. Also, an alternator drivable by the rotation of the drive shaft provides power to the system. The system also includes an encoder capable of adjusting the rotation of the rotor to modulate the carrier wave.