  We propose a projection measurement onto encoded Bell states with a static
network of linear optical elements. By increasing the size of the quantum error
correction code, both Bell measurement efficiency and photon-loss tolerance can
be made arbitrarily high at the same time. As a main application, we show that
all-optical quantum communication over large distances with communication rates
similar to those of classical communication is possible solely based on local
state teleportations using optical sources of encoded Bell states, fixed arrays
of beam splitters, and photon detectors. As another application, generalizing
state teleportation to gate teleportation for quantum computation, we find that
in order to achieve universality the intrinsic loss tolerance must be
sacrificed and a minimal amount of feedforward has to be added.
