The modulation and allocation of optimized multiplexed subcarriers in short-range data networks, based on a directly modulated bandwidthlimited optical source, enables the transfer of 25Gb/s over 20km of fiber.Multicarrier modulation is a technique for increasing the amount of information that can be transported by a communication system (i.e., the capacity). The approach is based on splitting a high-bit-rate signal into hundreds of orthogonal sub-carriers, each with a very low symbol rate. The exploitation of this technique in short-range data networks can hugely increase the throughput of a single optical link, thereby removing the need for high-complexity and high-performance components. 1 Future low-cost, energy-efficient datacenters and access networks that employ this modulation technique could therefore operate at very high bit rates by using cost-effective and bandwidthlimited optical sources.For short-range data network scenarios, as well as for longand medium-range networks, optical communications represent the most promising solution for both professional and consumer applications. Compared with optical transport networks, however, short-reach networks are much more sensitive to cost, footprint, and power consumption. For these reasons, such networks require the use of cost-effective and energy-efficient optical sources-such as vertical-cavity surface-emitting lasers (VCSELs)-combined with direct intensity modulation (IM) and direct detection (DD). 2 In the near future, however, these requirements could be met by using standard and low-cost devices with limited electrooptical (E/O) bandwidths. Key to achieving this is a drastic increase in the spectral efficiency of the transmitted signal from the current standard (i.e., 0.5bit/s/Hz, achieved with on-off-keying transmission). Two different modulation methods-i.e., orthogonal frequency division multiplexing and discrete multitone modulation-have recently been proposed as a way to enhance the transported capacity. Both approaches enable modulated data to be carried on several parallel channels. 3 However, the complexity of the transmission Figure 1. Measured and theoretical fiber transfer functions after propagation through 10 and 20km of standard single-mode fiber (SSMF).systems, the need for massive digital-signal processing, and the non-idealities that arise during operation could limit the realistic exploitation of these methods in short-reach networks. 4,5 In our work, 6, 7 we propose a different multicarrier approach, based on frequency division multiplexing (FDM). Our technique retains the advantages of multicarrier modulation, but reduces non-idealities and transmission-system complexity by limiting the number of sub-carriers. We used a long-wavelength VCSEL, characterized by a very limited bandwidth (of around 5GHz), to highlight the huge enhancement to the capacity of transported information that our technique enables.Of all channel distortion types, we hoped particularly to mitigate chromatic dispersion. This type of distortion causes each spe...