by B. Mikkelsen, C. Rasmussen, P. Mamyshev, F. Liu, S. Dey, F. Rosca

Introduction
Increasing the data rates by a factor of four has historically reduced the cost for the transmission of a unit bandwidth by approximately 40%. As the next natural increase in data rate, 40 Gb/s has been the focus of extensively investigation in research and development labs around the world for several years [1-9]. However, despite the obvious potentials, 40 Gb/s systems have not yet been commercially deployed, in part because 40 Gb/s is associated with a number of misconceptions, e.g., that 40 Gb/s technology is not mature and that the transmission distance is severely limited by fiber dispersion. In this paper we address the practical requirements that 40 Gb/s systems must meet to become commercially deployed. We show that seamless migration to 40 Gb/s per channel is possible with correctly designed line cards. Moreover, we discuss the technologies needed to implement different modulation formats, and the corresponding trade-off between complexity/cost of line cards and the achievable fiber transmission distance.