We have improved the hardware and software of our autocompensating system for quantum key distribution by replacing bulk optical components at the end stations with fiber-optic equivalents and implementing software that synchronizes end-station activities, communicates basis choices, corrects errors, and performs privacy amplification over a local area network. The all-fiber-optic arrangement provides stable, efficient, and high-contrast routing of the photons. The low-bit error rate leads to high error-correction efficiency and minimizes data sacrifice during privacy amplification. Characterization measurements made on a number of commercial avalanche photodiodes are presented that highlight the need for improved devices tailored specifically for quantum information applications. A scheme for frequency shifting the photons returning from Alice’s station to allow them to be distinguished from backscattered noise photons is also described.
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