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We theoretically investigate the performance limitations of subcarrier multiplexed (SCM) wavelength-division-multiplexing (WDM) systems using optical double-sideband (DSB) modulated, 16-quadrature amplitude-modulated (QAM) signals. The performance limitations are investigated using crosstalk power and SCM channel spacing for various transmission conditions, including impairment factors such as dispersion and fiber nonlinearities for a single wavelength channel first. The effects of WDM channel spacing on SCM systems with multiwavelength channels are also evaluated via the calculated bit error rate (BER) performance, based on the performance limitations found in the single-wavelength simulation. This enables us to provide guidelines for the design of SCM/WDM systems for fiber-to-the-home (FTTH) network in WDM-passive optical network (PON) architecture, based on the performance limitations.