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We developed a carrier-based photonic cross-connect (PXC) system based on an optical switch, which provides wavelength-division-multiplexing transmission, generalized multiprotocol label switching, and optical-transport-network management. This system uses an overlay model in which the administrative authority between the client-network-element (NE) layer and the carrier's PXC layer is completely separated. The PXC system provides user-network interface signaling between the client NEs and the PXCs, which enables automatic optical path setting between the two client NEs through a PXC network. We considered new protection schemes for the PXC system and successfully carried out an experiment in a testbed network using one of the discussed schemes. The new concept of policy control in the control-plane management is introduced, and the feasibility of our PXC system is demonstrated. This system is promising as a prototype for a next-generation optical transport system. Furthermore, the PXC system will enable the creation of a new type of optical transport layer service, accommodate increased Internet traffic demand, and reduce network operation loads and costs for Internet service providers and carriers in the near future.