Transparency of the optical layer offers the possibility to design a networ
k that operates at varying transmission bit rates, While variable bit rate
interfaces are being tested and will soon provide the possibility to optima
lly select the transmission rate for each optical channel, the potential ad
vantages of relying upon multiple transmission rates in the optical network
have yet to be fully explored, In this paper, we define the concept of Mul
ti-hop and Multi-rate (M&M for short) network in which the tributary signal
is transmitted over a concatenation of optical channels, with each optical
channel operating at its own transmission rate. The optimal rate of each o
ptical channel is determined by a number of factors including the end node'
s interface, amount of multiplexed traffic and cost of the network componen
ts. The potential advantages provided by the M&M network when compared to f
irst generation optical networks (i.e., SONET/SDH), to single- and multi-ho
p (constant bit rate) optical networks, are discussed in general and demons
trated numerically in a WDM ring, Presented results show that the network c
ost reduction achieved by the M&M design is a function of the cost ratio be
tween the optical bandwidth (wavelengths) and the optical terminals.