The invention provides a 3-wire multiplexing system exhibiting high noise immunity, particularly suitable for industrial control applications. A master station provides AC power, and clocking and synchronization information, for a plurality of remote transmitter and receiver stations. A 3-wire cable links the master station and the remote stations. Two wires of the cable are power lines L1 and L2 and are isolated from each station by respective transformers. The third wire is a data line and is optically coupled to the remote stations. The remote stations are thus completely isolated from the cable, yet powered, clocked and synchronized therefrom without the need for local power supplies or local clocks. The signaling method switches the data line onto the power lines, and provides a high degree of data security by recognizing both the polarity and the position of a pulse on the data line within an AC cycle. The system further provides diagnostics in remote receivers including half cycle polarity and position decoding, error detection, fail state selection to fail OFF or fail ON or remain in the last valid state, and two scans alike detection.