Theoretical performance characteristics are presented for a direct detection optical communication system that has peak power limited laser diode transmitters and avalanche photodiode photodetectors. The singal format consists of the transmission of a group of

binary source digits as a single light pulse at one of

nonoverlapping optical center frequencies (colors) in one of

possible time slots. The system achieves a given received symbol error probability at lower peak signal intensities with a less complicated receiver structure than can be obtained with an ordinary pulse position modulation system of the same alphabet size and source data rate.