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A numerical investigation on the limits of the optical frequency shift keying (FSK) label coding technique is presented, as well as an optimization of the critical parameters involved into it. The principle of the technique concerns a typical FSK modulated label, combined with an intensity modulated (IM) payload on the same optical carrier, via four-wave mixing (FWM) in a semiconductor optical amplifier (SOA). Simulations have been carried out for an intensity modulated nonreturn to zero (NRZ) 10-Gbs payload combined with a 625-Mbs FSK modulated header. The influence of the key parameters of the method such as the extinction ratio (ER) of the signal, the dynamic range of the FWM module and the FSK tone spacing have been investigated in combination with the system limitations, related to the propagating distance and the number of intermediate label swapping nodes. A 2R regeneration stage responsible for …