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In a WDM system, each of the wavelengths is launched into the fiber, and the signals are demultiplexed at the receiving end. Like TDM, the resulting capacity is an aggregate of the input signals, but WDM carries each input signal independently of the others. This means that each channel has its own dedicated bandwidth; all signals arrive at the same time, rather than being broken up and carried in time slots. The difference between WDM and dense wavelength division multiplexing (DWDM) is fundamentally than does WDM, and therefore has a greater overall capacity.The limits of this spacing are not precisely known, and have probably not been reached, though systems are available in mid-year 2000 with a capacity of 128 lambdas on one fiber.These include the ability to amplify all the wavelengths at once without first converting them to electrical signals, and the ability to carry signals of different speeds and types simultaneously and transparently over the fiber (protocol and bit rate independence).

WDM increases the carrying capacity of the physical medium (fiber) using a completely different method from TDM. WDM assigns incoming optical signals to specific frequencies of light (wavelengths, or lambdas) within a certain frequency band. This multiplexing closely resembles the way radio stations broadcast on different wavelengths without interfering with each other (see Figure 1-7). Because each channel is transmitted at a different frequency, we can select from them using a tuner. Another way to think about WDM is that each channel is a different color of light; several channels thenmake up a "rainbow."

DWDM mesh networks, consisting of interconnected all-optical nodes, will require the next generation of protection. Where previous protection schemes relied upon redundancy at the system, card, or fiber level, redundancy will now migrate to the wavelength level. This means, among other things, that a data channel might change wavelengths as it makes its way through the network, due either to routing or to a switch in wavelength because of a fault.

The situation is analogous to that of a virtual circuit through an ATM cloud, which can experience changes in its virtual path identifier (VPI)/virtual channel identifier (VCI) values at switching points. In optical networks, this concept is sometimes called a light path.

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