Airbus Defence and Space, with partners Tesat, Fraunhofer HHI, Fraunhofer FOKUS, DLR-IKN, ADVA, and COLT, has begun two projects funded by the European Space Agency. The first will develop a System Simulator Testbed. The second will study the implementation of a HydRON (High Throughput Optical Network) Demonstration System. The ESA HydRON is an optical transport network concept based on the combination of space-based laser communication payloads in combination with extremely high-throughput optical ground, space, and inter-satellite links, complementing existing terrestrial networks. The objective of the HydRON Demonstration System is to push the development and validation of the HydRON “Fibre in the Sky” technology to pave the way for its realization and integration into terrestrial networks at terabit-per-second capacity. The HydRON Demonstration System seeks to demonstrate the end-to-end system, including critical key technologies and a minimum viable service. It will also include networking capabilities such as seamless integration in high-capacity terrestrial networks and the operational concept that will reflect an expandable HydRON concept. The demonstration system study will last 18 months and will propose an implementation concept for an end-to-end demonstrator of the HydRON concept, tentatively composed of two space-based laser communication payloads in LEO and GEO, interconnecting with each other, several optical ground stations, and the terrestrial fiber optics network. The study’s completion in 2023 will serve as the technical and planning basis for the subsequent HydRON demonstration implementation phase with a launch in 2026. The consortium has been awarded a second contract to develop a HydRON System Simulator Testbed to further demonstrate capabilities and refine the system.