NRZ coding stands Non-Return Zero coding. When a “one” bit is transmitted, there is light in a fiber; otherwise, no light in the fiber. This technique seems quite simple. Nonetheless, a big challenge is how to recover the clock of bit stream at a receiver. After an optical signal is transmitted for a certain distance, the shape of the signal is not a square any more. It is distorted by some non-ideal factors of fibers such as dispersion and nonlinear effects, which cause more difficulty in recovering the clock of the bit stream. An approach called “Digital Phase locked loop” (DPLL) has been proposed to overcome the difficulty.

NRZI coding stands Non-Return Zero Inverse coding, which is a more advanced coding technique than the NRZ coding. The NRZI coding generates more transitions between bits when sending a bit stream. The NRZI coding is the most popular coding technique in most digital communication systems. A “zero” bit is signaled when a receiver finds that there is a transition from light to no light or from no light to light. When there are two continuous pulses of light or two continuous periods of no light, then a “one” bit is transmitted. To avoid a long stream of “ones,” which causes no transitions for a long period, some coding techniques can be implemented in the upper layer (i.e., Data Link layer) to insert “zero” bits in a continuous “one” bit stream, e.g., code conversion from 4-bit “nibbles” to 5-bit “symbols.”

RZ coding stands for Return Zero coding, which has more frequent transitions of signals. More accurately, there is a transition in each transmission of a “one” bit. For every bit time, there is half a bit time for a laser to be “ON,” and the remaining half time to be “OFF.” Although easier to recover the clock of bit stream at a receiver, the disadvantage of this coding technique is a larger bandwidth requirement compared to the NRZ coding. In a restricted bandwidth environment, the RZ coding may not be an efficient option. However, in optical communication, because the bandwidth of fiber is not an issue, the RZ coding is also a viable solution. For example, the RZ coding is proposed in some optical time division multiplexing (OTDM) transmission systems.