We describe a new method for quantum key distribution that utilizes phase m
odulation of sidebands of modulation by use of integrated electro-optic mod
ulators at the transmitting and receiving modules. The system is shown to p
roduce constructive or destructive interference with unity visibility, whic
h should allow quantum cryptography to be carried out with high flexibility
by use of conventional devices. (C) 1999 Optical Society of America.