A new approach to FTTx solutions is proposed, in the framework of which a hybrid TDM/WDM system using cascaded FWM-generated optical signals is eva-luated by calculating the BER parameter and the optical power budget. Computer simulation is employed as the main method of calculations, with the results presented both in numerical and graphical forms. The results show that the use of a forward error correction allows the power margin of 4 dB to be achieved for the system to work reliably. The system can provide the total number of users up to 128 (8λ×16 TDM users) with a bandwidth of multiple hundreds of Mbit/s p.u. by means of the existing passive optical networking infrastructure, with only minor improvements needed
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