Overview

As a departure from previous chapters, which focused on the algorithmic aspects of optical networking, this chapter addresses the network economics. A range of network studies are presented that investigate various properties of optical networks, especially with regard to the economics of optical bypass. The studies are intended to provide guidance on how best to evolve a network as traffic levels continue to grow, and also to shed light on some of the desirable properties for a system vendor s portfolio.

The results of any economic study depend on the topology of the network, the traffic set and traffic growth model, and, of course, the cost assumptions used in the study. To simplify the presentation, the results of most of the studies are shown for a single reference network and reference traffic set that are representative of realistic carrier networks. However, the studies have been performed on a range of networks and traffic sets to probe dependencies on these factors. If warranted, results from other topologies are also presented. References to previously published network studies, based on different topologies and traffic, are also provided where appropriate. The baseline network topology and traffic set, along with the cost assumptions, are presented in Section 8.1.

The first two economic studies arise from the fact that extended-reach transmission and optical-bypass-enabling network elements come with a cost premium. For example, Raman-based amplifiers are generally needed for extended optical reach as opposed to lower-cost Erbium-based amplifiers. Dispersion compensation, equalization, and transient controls are also needed...