A phase shift modulator at the transmitter has a control input connected to a binary signal source. A high frequency carrier signal is applied to a carrier signal input of the modulator. The modulated carrier signal is transmitted to a receiver where it is mixed with a local oscillator frequency. At the receiver, a modulated signal is amplified by a limit amplifier to form the received signal into square wave pulses of a uniform height. The demodulator detects when the spacing between the edges of the square wave signal change in response to the phase shift modulation at the transmitter. When the spacing between the edges of the square wave IF signal is detected to be shorter than the normal spacing for a steady IF signal with no modulation, this signifies a first binary value. A longer than normal spacing between the edges of the square wave IF signal signifies a second binary value. Frequency drift compensation circuits are disclosed to overcome frequency variations in the carrier and the local oscillator.