In all-optical networks, traffic is carried end-to-end in the optical domain, without any intermediate optical-electrical-optical conversion. The promise of such networks is the elimination of a significant amount of electronic equipment, as well as added capabilities, such as the ability to transport any type of data format through the network. Fiber optic communications has been growing at a phenomenal pace over the past twenty years, so rapidly, in fact, that its impact is increasingly felt in nearly all aspects of communications technology. The design of such a system involves many aspects such as the type of source to be used (LED, LASER), the kind of fiber to be employed (multimode or single mode), and the detector (PIN or APD). This work emphasizes the basic requirements and design approaches of an optical fiber communication link. For designing such system the main concern is the optimization of cost, maximum link length and stability of performance characteristics. For a given bit rate, link length and typical bit error rate, the cost effective design is chosen here with software implementation.