In this paper we address the problem of host to host communication. In particular, we discuss the issue of efficient and adaptive transmission mechanisms over possible physical links. We develop a tool for making decisions regarding the flow of control sequences and data from and to a host. The issue of compression is discussed in details, a decision box and an optimizing tool for finding the appropriate thresholds for a decision are developed. Physical parameters like the data rate, bandwidth of the communication medium, distance between the hosts, baud rate, levels of discretization, signal to noise ratio and propagation speed of the signal are taken into consideration while developing our decision system. Theoretical analysis is performed to develop mathematical models for the optimization algorithm. Simulation models are also developed for testing both the optimization and the decision tool box.