Abstruct-A multichannel modem allows a customer to possess multiple “virtual” channels on a single physical link. In order to accomplish this compression, time division or frequency division multiplexing may be used. Implementing an FDMbased modem for a multichannel application, requires a bandwidth allocation strategy. That is, one must decide how to allocate total bandwidth to individual channels such that a) the desired aggregate rate can be achieved and b) the desired individual channel bit rates can be achieved. It is our goal to determine an optimal strategy for bandwidth allocation. This document will make use of the multitone channel result to specify a scheme to allocate four separate channels (extension beyond four is straightforward using similar procedures). The allocation strategy assigns each subchannel an equalsized constellation to that of an equivalent single band modem operating at the aggregate rate. In this manner, bandwidth is allocated proportional to the desired bit rate on a particular subchannel. Power allocation will be done to maintain a constant probability of error between all channels. Thus, the technique outlined in this document will allow the user to split total bandwidth to meet error performance objectives provided that the desired aggregate rate does not exceed the maximum bit rate allowed by channel conditions.