Sources of latency in optical systems used by financial customers

Every optical-transport function that is intended to contribute to the successful beaming of traffic across fiber connections can inject small amounts of latency into the process. Today’s financial network manager must be cognizant of all of them.


Color conversion (“Transponding” and “muxponding” ) are two common sources of delay. When traffic is readied for transport across a Wavelength Division Multiplexing (WDM) optical network, it’s converted to a color of light to be carried across the glass fiber. This is transponding.
Additionally, in many cases, lower-speed traffic, such as a 1 Gbps information feed, is aggregated into a higher-speed signal such as a 10 Gbps transport link. When multiple feeds are muxponded, significant latency can occur
Optical amplification also can produce latency in a financial network. The “Erbium-Doped Fiber Amplifier” (EDFA) can introduce microseconds of latency, so financial network managers should instead demand amplifier designs that have been specifically engineered for the contemporary low-latency challenge.
Dispersion compensation is another potential source of latency. At higher speeds, such as 10 Gbps, optical data signals sometimes smear into a rainbow of colors within a fiber cable. It’s an effect called “chromatic dispersion” and its effects can include an increasing degradation of the data signal over distance.
There are fiber Bragg gratings (FBGs) that have been designed to offset dispersion while introducing only negligible delay. In some cases the alternative is to rely on hundreds of kilometers of dispersion-compensating fiber (DCF) that is ill-suited for low-latency applications.
Electrical signal regeneration likewise introduces additional latency. Conventional regeneration techniques may yield hundreds of microseconds of delay. State-of-the-art low-latency techniques will introduce latency of only nanoseconds.