A rate 0.964 forHard error correcting (FEC) code is integrated into the loa-speed tributaries of a 565-Mbit/s lightwave system as an exploratory sjstem design approach to relax requirements on laser sources in dispersion-limited operation. Experimental and simulation studies show that FEC can increase allowed spectral width up to 70 percent and wavelength offset up to 60 percent at 565 and 1200 Mbit/s. FEC is shown to qualify a mode-hopping, nearly single mode laser for use at 1200 Mhit/s under conditions that otherwise prohibit use of this laser due to a severe error-rate floor. By virtually removing error rate floors, regardless of their cause, FEC is shown to provide an increasing ahantage in conditions of greater degradation and to be effective against MPN, mode jumping, and reflection impairments. The experimental FEC code is implemented in a standard gate array. The FEC code is described and its performance is analyzed. A new system design strategy is suggested for low-cost gigahit lightwave systems using FEC. A reservation of overhead for an FEC option in the new SONET standard is suggested by the findings of this work.