The primary obstacles to high-speed communication, namely, shot noise from ambient light, high-capacitance photodiodes and multipath dispersion, are reviewed, and ways to counter them are demonstrated for a prototypical infrared system. The discussion is limited to the physical-layer issues involved in the design of a single high-speed optical link. The focus is on the downlink (from base station to portable), which is a more challenging problem technically than the uplink for two reasons. First, the complexity of the portable receiver is much more constrained than that of the base station, due to power consumption and cost restrictions. Second, the downlink data rates are likely to be much higher than the uplink rates, because downlink communication will include downloading large executable files and possibly video services, whereas uplink communication will be used for transferring working files and keyboard commands which tend to be much smaller.
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