In this paper, theoretical analysis for metropolitan optical networks is performed. First, analytical optical SNR is derived assuming each node consists of an EDFA, an optical filter, an optical switch, and a VOA, and then the relationship between OSNR and BER is studied. In a metropolitan optical network, an optical signal can be dropped to deliver data, and we also studied the effect of drop loss on system performance. When the drop loss is relatively small, the receiver structure of the node can be treated as a preamplifier receiver which is widely used in long-haul systems. In that case, ASE noise from EDFAs is the dominant noise source in the receiver. However, system performance is relatively insensitive to OSNR when the drop loss is significant because of the noise sources in the receiver (thermal and shot noise).