Wavelength-division multiplexing (WDM) is a photonic technology that couples many optical channels (wavelengths) in a single fiber. Each wavelength represents a separate optical channel at a fixed bit rate. Thus, to increase the aggregate transportable bandwidth per fiber either the channel density must be increased or the bit rate per channel, or both. As a result, the signal quality for a given fiber length suffers due to the nonlinearity of the medium. Therefore, engineering and provisioning of WDM links to meet signal quality objectives is a complex task. Despite advancements in bit rate increase, not all applications require such high rates, as many applications require granularity finer than optical carrier n (OC-n) to increase efficiency. As a consequence, bandwidth efficiency, fine bit rate granularity, and diverse traffic type will be necessary characteristics of the next-generation WDM networks. We propose a WDM transmission method by which a highbandwidth-capacity wavelength bus supports many clients, more than the number of wavelengths, each at different rate and of different traffic type. In addition, the method uses low bit rates and cost-effective transceivers. We examine strategies to minimize linear and nonlinear impairments over a given span, strategies to enhance the quality of signal and increase the fiber span, and strategies to reduce cost of transported bandwidth-kilometer in a variety of dense WDM (DWDM) applications. We also examine the applicability of the method in various network topologies, and aspects of network protection and restoration. © 2004 Society of Photo-Optical Instrumentation Engineers.