% each year. In comparison, the number of transistors on a computer chip doubles only every 18 months. There- fore, over a 5-year period, optical technology far outpaces silicon chips and data storage. New fiber networks are increasing long-distance transmission capacity incredibly quickly and relatively inexpensively. Chapter 11 Optical Networking Falling Prices in Optical Networking Developments in optical networking have caused the cost of transport to drop dramati- cally in recent years. Over the past decade, the cost of moving bits has dropped so dra- matically that if the automotive industry could match it, you could buy a BMW for just a dollar or two. The following sections discuss the factors driving the optical networking boom, what today's networks actually look like, and the abundance of bandwidth. Drivers of Optical Networking A number of factors are driving the interest in and deployment of optical network- ing. First, carriers want to boost capacity by orders of magnitude. Dense Wave- length Division Multiplexing (DWDM) enables multiple wavelengths of light to carried over a single strand of fiber, which allows for the elegant expansion of capacity. We're also seeing developments in the application of Frequency Division Multiplexing (FDM) to WDM systems, whereby we can combine more streams of traffic onto the same wavelength, promising a several-fold boost to the carrying capacity of fiber. (DWDM, FDM, and other multiplexing techniques are discussed in Chapter 1, "Telecommunications Technology Fundamentals.") Thus, we can extract more wavelengths, and over each wavelength we can derive more channels, and on each channel we can achieve more bits per second. Second, carriers want to slash costs. Advances are being made in eliminating the need for regeneration stations on long-haul networks. Because many optical networks still use electronic repeaters, every 200 miles (320 km) a light signal has to be converted back into an electrical signal in order to be reshaped, resynchro- nized, and retimed. Then 