An Improved Infrared Signal Communication System and Method Including Transmission Means Having Automatic Gain Control is disclosed. Also disclosed is system and method that adjusts signal transmission power in response to incident signal power amplitude. The preferred system includes a control signal loop within the signal receiving system, and the system further includes a signal transmitting system that is responsive to the control signal loop. The preferred system includes manual, semi-automatic and automatic modes of operation. Still further, the preferred method includes at least two Ir-enabled appliances "stepping" each other "down" in transmit power in response to directives issued by the other Ir-enabled appliance.

 
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