We consider meshed optical transport networks having multiple levels of hierarchy whereby cross-connects in different levels perform multiplexing and demultiplexing functions at different granularities. We present a traffic grooming approach that can be implemented in a centralized or distributed fashion, based on the novel design that takes advantage of algorithm efficiency and a simple threshold mechanism to decide when grooming is economical. Our approach allows nodes to perform grooming and

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... degrooming automatically, which is desired in the next-generation optical network where circuits are setup and torn-down dynamically through signaling. We present several experiments using different network topologies. The results indicate that the flow pattern influences the port requirement behavior, and that the flow thickness influences the optimal value of the threshold.