A laser diode controller uses a programmed microcontroller to accurately control the process of turning on and selecting the operating point of the laser diode. The laser diode has a front facet for transmitting light, and a back facet for monitoring the laser diode's optical output power. Once the back facet of the laser diode is calibrated, the controller can accurately monitor the laser diode's operating characteristics, and can select the best operating point current based on the current operating characteristics of the laser diode. During calibration of the laser diode, the controller can check the linearity of the laser diode's optical output power as a function of drive current, and can thereby detect defects in the laser diode. In a full duplex optical link, the controller of the present invention prevents the laser diodes from generating light at their full normal intensity until the integrity of the link has been established, thereby preventing light from the laser diode's from accidentally damaging user's eyes. Furthermore, the controllers can use the full duplex link to establish lower operating point drive currents that would otherwise be used, thereby significantly lengthening the lifetime of the laser diodes. A laser diode's operating characteristics change over time in such a way as to enable the controller to predict when the laser will fail. The controller records the operating characteristics of the laser diode in a nonvolatile memory, analyzes changes in those characteristics, and generates a failure warning message when those changes match predefined failure prediction criteria.