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A 1.3 μm-wavelength high-speed surface-emitting DH LED, with 0.6 ns rise time and 1.3 ns fall time, has been developed by optimal design of both the LED parameters and driving circuit. A 500 Mbit/s RZ pseudorandom pulse transmission experiment using the high-speed DH LED has been performed with a 5.7 dB level margin over a 2.7 km optical fibre. The 500 Mbit/s LED system feasibility has been confirmed.