A detailed theoretical analysis is given for the impact of finite frequency deviation on the sensitivity of dual-filter heterodyne Frequency Shift Keying (FSK) lightwave systems. Our analysis provides closed-form signal-to-noise ratio (SNR) results for estimating the bit-error-ratio (BER) performance of the system. These closed-form results provide an insight into the impact of finite frequency deviation 2Afd, laser linewidth Am, bit rate R 6 , and IF filter bandwidths on the system

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... It is shown that there is a well-defined relationship between the choice of frequency deviation and the tolerable amount of laser phase noise. When there is no phase noise, a frequency deviation of 2Afd = 0.72R6 is sufficient for 1 dB sensitivity penalty with respect to infinite frequency deviation case; whereas for a linewidth of Am = 0.50R6 the required frequency deviation increases to 2Af 4 = 3.42P6 for the same sensitivity penalty. The sensitivity degradation can be very severe for a fixed linewidth as the frequency deviation gets smaller: for a linewidth of 20% the sensitivity penalty is only 0.54 dB when the frequency deviation is infinite whereas it is 3.48 dB when the frequency deviation is 2Afd = R. We also quantify the impact of finite frequency deviation on optimum IF filter bandwidths. For a fixed linewidth, the optimum IF filter bandwidth decreases as frequency deviation becomes smaller: for Am = 0.5R the optimum IF filter bandwidth reduces from 714 to 3R1 when 2Afd reduces from very large values to 314.