Multi-layer IP-optical networking promises significant cost reductions for the same availability as today’s networks However, to realize these savings, it is necessary to Multi-Layer Capacity Planning for IP-Optical Networks change the planning process such that it is aware of the behavior of both layers. This article explains today’s nonintegrated planning process and its deficiencies. It then suggests a multi-layer router bypass optimization process. Next, it explains how different multi-layer restoration schemes work, and the required changes to the planning process to efficiently design the network in an optimized way for such schemes. The process is demonstrated on a small four-node example, and the resulting savings are compared to savings achieved for real-world networks that approximate the Multi-Layer Capacity Planning for IP-Optical Networks Deutsche Telekom and Telefonica backbone networks. The resulting IP layer links drive the demands of the optical layer. The optical layer design phase ensures that each of the links is feasible from a transmission perspective. Based on the output of this phase, it is possible to acquire transponders and regenerators and implement the lightpaths defined. At the same time, the required additional IP ports can be acquired and connected to the transponders. Once the IP layer is connected over these lightpaths, the topology is extended to include the new links. Multi-Layer Capacity Planning for IP-Optical Networks The network now enters an operations phase, where traffic data and IP and optical performance is collected This data is used to drive the next planning phase. bviously, this is an idealized iew of the process. In reality, different phases happen in parallel; for example, the network continues to operate during the next planning phase. The steps are sometimes not as distinct; for example, the IP planning team may interact with the optical planning team to ensure that the optical paths provided for the IP layer are sufficiently diverse. Multi-Layer Capacity Planning for IP-Optical Networks But overall, the interaction is manual and error-prone. One of the basic capabilities needed in a multilayer tool is the ability to optimize the IP layer given knowledge of the optical layer topology. This process typically starts with a basic IP topology, in which traffic has to go through many IP Multi-Layer Capacity Planning for IP-Optical Networks hops to reach its destination. The links are well utilized since the IP layer can re-groom traffic at every hop. In order to save router ports and transponders, thereby reducing network cost, the algorithm considers the traffic demands in the IP layer and identifies intermediate routers that can be bypassed. Only links that contribute to reduction of the overall IP+optical network cost are selected to ensure that expensive optical resources are not wasted. We call this process multi-layer bypass optimization or MLBO.