In recent experiments1 the phenomenon of two-photon interference has been studied, and apparent nonlocal interference effects have been convincingly demonstrated.2 In all these experiments interference effects are not manifest in the singles count rates but appear in the coincidence rate or rate of detection of pair events and are a result of entanglement of the pair photon wavefunction. Modulation of the coincidence rate provides the basis of various covert communications schemes. We have previously demonstrated a free-space propagation communication system using a classical time shift coding out to ranges of 200 m using light levels 1/1000th of ambient daylight levels. This has been extended to a fiber (200-m) based system that exploits nonlocal interference using a scheme first proposed by Franson? With high visibility interference effects single photons can be used to code individual bits of information leading to extremely secure communication.