C-QUAM is the method of AM stereo broadcasting used in Canada, the United States and most other countries. It was invented in 1977 by Norman Parker, Francis Hilbert, and Yoshio Sakaie, and published in an IEEE journal.
Using circuitry developed by Motorola, C-QUAM uses quadrature amplitude modulation (QAM) to encode the stereo separation signal. This extra signal is then stripped down in such a way that it is compatible with the envelope detector of older receivers (hence the name C-QUAM, i.e. Compatible QUadrature Amplitude Modulation). A 25 Hz pilot tone is added to trigger receivers; it is not necessary for the reconstruction of the original audio sources.
The C-QUAM signal is composed of two distinct modulation stages: a conventional AM version and a compatible quadrature PM version.
Stage 1 provides the transmitter with a summed L+R mono audio input. This input is precisely the same as conventional AM-Mono transmission methods and ensures 100% compatibility with conventional 'envelope detector' receivers.
Stage 2 provides the stereo mixed audio input and replaces the conventional crystal oscillator stage of otherwise AM-Mono transmitters. So as to not create interference with 'envelope detector' receivers, the stage 2 signal takes the mixed audio signals and phase modulates both, using a divide-by-4 Johnson counter and two balanced modulators operating 90 degrees out of phase with each other. Stage 2 is not amplitude modulated, it is phase modulated, and is made up of both a L+R input and a L-R input.
To recover the 'stereo' audio signals, a 'synchronous detector' is utilized to extract the L-R audio from the phase modulated quadrature portion of the signal created in stage 2. The L+R audio can be extracted from either the AM (stage 1) or the PM (stage 2) modulation component. From there, the audio can be readily de-muxed back to 'stereo', a.k.a. Left and Right channels.