The transparent WDM optical networks in absence of electrical regenerators reduce the overall network cost. The Quality of Service (QoS) in such networks can be guaranteed if and only if the Bit Error Rate (BER) and the crosstalk induced power penalty is significantly reduced. In this paper we have studied the wavelength assignment mechanism based on BER blocking probability and power penalty blocking probability. The blocking probability is found to be the function of node count and wavelength count as well while considering the scalability of optical crossconnect (OXC). A wavelength assignment strategy is analyzed based on knowledge of crosstalk component, BER and power penalty at each node. ©2010 IEEE.