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In this paper we discuss the effect of physical impairments on manycasting service over the optical burst- switched (OBS) networks. Signal quality degradation in manycast networks is an important issue and it can occur due to fiber attenuation, splitter switch and amplified spontaneous noise in EDFA. These physical layer impairments causes the signal quality to be weak at the receiver and hence burst may not be detected or lost. Our objective is to select the manycast destinations based on the quality of signal received. We propose a new algorithm, impairment aware - dynamic membership (IADM) that takes into account of the physical layer impairments. Based on the simulation results we observe that IADM is more robust and practical, as bursts are scheduled not just on contention but also on the physical layer constraints.