In future all-optical wavelength-division multiplexed (WDM) packet networks, the ability to detect the presence or absence of optical packets without regard to the transmission bit rate may be essential in achieving collision-free transmission. Using this feature, we present the use of baseband carrier sensing-the direct detection of baseband optical signals-to facilitate optical carrier-sense multiple access with collision avoidance (CSMA/CA) networks. Central to the technique is the use of baseband carrier-sense circuits (BCSCs) to perform carrier sensing. We investigate the physical limits of baseband carrier sensing, governed by the characteristics of the BCSC. Our investigations reveal that there exists a reliable operating range of received optical power at the circuit, bounded at the lower end by the sensitivity of the circuit and at the higher end by considerations of transmission efficiency. We further investigate the dependence of the reliable operating range on the bandwidth of the BCSC, demonstrating that there exists an optimum bandwidth that maximizes the operating range. Investigations performed over an order of magnitude change in bandwidth show that the BCSC has a sensitivity of higher than -50 dBm and operates reliably over a 25-dB range. There is enormous potential in employing our simple, nonintrusive, yet efficient baseband carrier-sensing technique to realize collision-free transmission in future optical CSMA/CA packet networks.