This work addresses the problem of migrating the networking functionalities and intelligence down to the optical layer in IP/WDM netoworks. It examines the technological requirements and the feasibility for implementing a novel, simple, and scalable optical networking paradigm that can efficiently support fully automated, pure optical networking service at any bandwidth granularity. To realize such an ambitious initiative, the following innovations are needed: a) an intelligent and agile optical transport layer, b)a novel hybrid optical node architecture, c) an integrated control plane that manages both later 1 and layers 2/3 and d) a fully distributed integrated routing and signaling framework for dynamically provisioning on a per-call basis on the optical layer''s terms. Developing such an integrated routing and signaling algorithms and protocols for provisioning sub-lambda connection requests entirely on the optical layer''s terms is a new and challenging issue that has never been addressed before. This work also presents several significant and far-reaching practical applications enabled by the proposed optical networking paradigm.