  To implement the BB84 decoy-state quantum key distribution (QKD) protocol
over a lossy ground-satellite quantum uplink requires a source that has high
repetition rate of short laser pulses, long term stability, and no phase
correlations between pulses. We present a new type of telecom optical
polarization and amplitude modulator, based on a balanced Mach-Zehnder
interferometer configuration, coupled to a polarization-preserving
sum-frequency generation (SFG) optical setup, generating 532 nm photons with
modulated polarization and amplitude states. The weak coherent pulses produced
by SFG meet the challenging requirements for long range QKD, featuring a high
clock rate of 76 MHz, pico-second pulse width, phase randomization, and 98%
polarization visibility for all states. Successful QKD has been demonstrated
using this apparatus with full system stability up to 160 minutes and channel
losses as high 57 dB [Phys. Rev. A, Vol. 84, p.062326]. We present the design
and simulation of the hardware through the Mueller matrix and Stokes vector
relations, together with an experimental implementation working in the telecom
wavelength band. We show the utility of the complete system by performing high
loss QKD simulations, and confirm that our modulator fulfills the expected
performance.
