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According to: http://www.phrases.org.uk/bulletin_board/17/messages/380.html

The term five by five refers to the two measures of signal strength and readability; it is derived from older HAM radio instruments that were scaled from zero to 10 with 10 being the strongest. A five by five would be interpreted as 50 percent signal strength and easily readable, perhaps with some static or band clutter. A 10 by two would have a strong signal, but be broken and hard to understand, while a two by 10 would contain a weak signal, but be perfectly clear. A 10 by 10 would be very strong and crystal clear.

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Q: Where did the term 5 x 5 in communications come from?
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