Lasers and LEDs used in telecommunication applications are modulated using one of two methods: direct modulation or external modulation.

• In direct modulation (Figure 8-27), the output power of the device varies directly with the input drive current. Both LEDs and lasers can be directly modulated using analog and digital signals. The benefit of direct modulation is that it is simple and cheap. The disadvantage is that it is slower than indirect modulation with limits of less than approximately 3 GHz.
  
  

  Figure 8-27  Direct modulation

• In external modulation (Figure 8-28), an external device is used to modulate the intensity or phase of the light source. The light source remains on while the external modulator acts like a “shutter” controlled by the information being transmitted. External modulation is typically used in high-speed applications such as long-haul telecommunication or cable TV head ends. The benefits of external modulation are that it is much faster and can be used with higher-power laser sources. The disadvantage is that it is more expensive and requires complex circuitry to handle the high frequency RF modulation signal.
  

  Figure 8-28  External modulation

External modulation is typically accomplished using an integrated optical modulator that incorporates a waveguide Mach-Zehnder interferometer fabricated on a slab of lithium niobate (LiNbO₃). The waveguide is created using a lithographic process similar to that used in the manufacturing of semiconductors. The waveguide region is slightly doped with impurities to increase the index of refraction so that the light is guided through the device (Figure 8-29).

Figure 8-29  External modulation using Mach-Zehnder waveguide interferometer

Light entering the modulator (via fiber pigtail) is split into two paths. One path is unchanged or unmodulated. The other path has electrodes placed across it. Because LiNbO₃ is an electro-optic material, when a voltage is placed across the waveguide its index of refraction is changed, causing a phase delay proportional to the amplitude of the applied voltage. When the light is then recombined, the two waves interfere with one another. If the two waves are in phase, the interference is constructive and the output is on. If the two waves are out of phase, the interference is destructive and the waves cancel each other. The input voltage associated with a 180° phase shift is known as V_p . The induced phase shift can be calculated using:

where V_in is the voltage applied to the modulator. Lithium niobate modulators are well developed and used extensively in both CATV and telecommunication applications. Devices are available at both the 1310-nm and 1550-nm wavelengths.