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The company makes two pieces of the system: a laser diode that shoots a signal at the player, recognizes her motions and reflects them back to the console, at which point they hit a second JDSU part, an optical filter.
FORBES: Magazine Article
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Then, they move on to clean rooms, where the Dragon sensor and new optical low-pass filter are installed.
ENGADGET: After hours at NAB: A closer look at Red's Dragon upgrade operation (video)
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Though there is no reason to use Dr Knight's invention to replace existing optical fibres, it could, by varying the spacing of the air-filled tubes, make a handy filter allowing selected wavelengths (and the messages they carry) to enter or leave the waveguide while the others are contained.
ECONOMIST: New-age crystals