In this research a suspected "gray" area in computer network performance that might exist between the network's optimum performance and complete network failure was investigated. Changes in performance were studied as seen by the application layer of the network as attenuation was introduced at the physical layer of the network. The network performance was measured for four groups of tests running over TCP and UDP. Various scripts emulating different network applications were used. Ultimately the performance was evaluated at different optical power levels, based on throughput, transaction rate, response time, and lost data. Additionally, the bit error rate characterization of the attenuated optical fiber link was analyzed. Ultimately, performance of the fiber optic ATM-based computer network as seen by the user was correlated with optical power degradation introduced in the physical layer. A decrease in performance was found as attenuation was increased, even in the range of "normal" operating conditions. As expected, TCP, although not immune to soft failures, performed better than UDP. A description of the investigation, tests, scripts, methods and results are included. / Master of Science