A major source of propagation outages on microwave LOS links is multipath fading caused by steep negative refractive index gradients. The advent of highspeed digital transmission over the DCS microwave LOS links brings into concern the possible degrading effects of frequency-selective fading associated with such multipath. The present study extends previous results by CNR on channel modeling for multipath fading on LOS links and the consequent degrading effect of such distortion on digital modems and diversity combining. Two 2 bits/sec/Hz modems were examined. One technique used a baseband modem utilizing the conventional radio with a frequency modulator and frequency discriminator in the receiver. The other technique used an IF modem and involved coherent receiver processing. While the theory developed is applicable to all the DCS links, two particularly difficult links were singled out for study: the Hohenstadt-Zugspitze link in Germany and the Swingate-Houtem link across the English Channel. Considerable SNR degradation was found to be possible for some propagation conditions. In addition, it is shown that conventional diversity switching can produce loss of bit count integrity, but a modified diversity switching plan can alleviate this problem. (Author)