Without a doubt, the networking performance advantages of coherent technology are considerable. With coherent detection, the phase information of the optical signal is preserved after electro-optic detection, allowing the optical distortion effects such as chromatic and polarization mode dispersion (PMD) to be compensated electronically. This is even more elegant in digital coherent detection schemes (the preferred embodiment in the optical industry), as the adaptive equalizer consists of a digital signal processor (DSP), typically implemented in CMOS ASIC technology, which is low cost to produce in volume.
However, as is typical in this industry, a “one solution fits all” idea that coherent technology wins in all applications is incorrect, nor is it likely to be in the near future.
Fundamentally, coherent optical systems require much more complex electro-optics than direct-detection schemes. Typical 40G/100G coherent systems use the polarization-multiplexed quadrature phase-shift keying (PM-QPSK) modulation scheme. This approach requires:
dual polarization nested Mach-Zehnder modulators (basically, four modulators)
four driver amplifiers
four balanced photodiodes
some optical passives for polarization beam combining/splitting and phase diversity.
Compare this to differential phase-shift keying (DPSK), which requires a single laser/driver amp/modulator/photodiode and delay interferometer plus a tunable dispersion compensator (TDC).
The increased complexity of coherent schemes simply translates into increased cost. One smart thing the industry is doing at 100G is to standardize the modulation scheme and integrated photonics in the OIF. This certainly helps the cost structure but, at least in the early years, not enough to offset the more complex transmit/receive design for coherent.
In some network applications, using coherent detection will still make sense, even though the transponder cost is higher. For example, the PMD tolerance of direct-detection schemes using 40G DPSK is around 3 ps mean, or around 8 ps if used with a PMD compensator or for a RZ-DQPSK modulation format. PMD beyond these levels can easily be satisfied using coherent detection. In addition, assuming a clean design with low implementation penalty, coherent detection should offer a 2- to 3-dB OSNR improvement, enabling greater distance for trans-oceanic submarine or terrestrial ultra long haul (ULH) applications.
Another application where coherent technology has an advantage is for low-latency connectivity. The use of coherent detection can completely eliminate the need for optical fiber based dispersion compensation, which reduces the distance, and hence latency, of the optical link. This has some advantages in the financial community and for gaming applications.
The bottom line, though, is that while there are network applications where coherent’s transponder cost premium can be justified by the reduction in OEO regenerators required at the network level, there are others where it can’t. The marketing and performance advantages of coherent detection make for an easy sell -- but economic reality means that there will be many metro, regional, long haul, and even submarine links where 40G DPSK or DQPSK will offer the best price/performance tradeoff.
Direct detection has dominated 40G deployments to date, with strong demand forecasts in 2011, 2012, and 2013. Coherent 40G technology will begin deployments in especially challenging applications such as very high PMD older fibers or trans-oceanic submarine. But wide-scale coherent technology is not likely to happen until 100G matures, where the performance advantages of coherent really become a “must-have” in the majority of applications.
For 100G coherent, the use of OIF integrated photonics is also expected to provide a competitive $/bit/s cost structure at a fairly early stage in the technology life cycle. Even after 100G availability, 40G direct detection is likely to survive as a dominant technology in metro/regional networks and smaller national networks where 100G pipes are still too big to fill efficiently.