What is it?
All-Optical Label Swapping ("AOLS") is a network switching technique in which each packet within an optical packet stream gets tagged with a label. This label will most likely have the same meaning as (in fact, be extended from) the definition of labels from the MPLS standard; it may also be 20-bits long and occur at the front of each packet.
Why is there a need for AOLS?
As bit rates on a given lambda (wavelength) become greater than 160 gigabits per second, a typical packet would be racing through a switch every 1 nanosecond. Given that using traditional design techniques and electronics from the year 2000, a packet will take about 100 nanoseconds to process using MPLS, traditional electrical methods cannot simply act fast enough.
How will it work?
First generation designs will first de-multiplex each lambda and then split it into two beams for a given switch path. A photodetector will decode just the label portion of the packet from the second beam and cause fast opto-electronics to switch the first beam light toward the proper egress port where it is re-multiplexed to travel along a trunk-line.
Next generation products will be able to decode the label and construct the proper switch path without using any opto-electronics at all. Research in this area is being driven by researchers at Princeton, the M.I.T. Lincoln Laboratory, and British Telecom, among others. Devices have already been contructed to perform simply binary instructions— such as AND, XOR, and NOT— on light in-band at speeds in excess of 250 Gb/s.