At Argonne National Laboratory the High Energy Physics and Center for Nanoscale Materials Divisions are working on a project to develop a new generation of detector readout using high speed data transfer optical devices that can be implemented in particle physics or for long distances. Free-space communications devices offer the potential for reductions in mass, power, and cost of data paths for on-board trigger and readout of tracking detectors. The project involves three areas of study: light modulation, the design and construction of MEMS optical devices, and the control systems for maintaining precise laser light positioning. We demonstrate an optical link in air over one meter and with low error rate at 1 Gb/s. We demonstrate steering of an optical beam over a meter with a precision of 5 micrometers utilizing a MEMS mirror and reflected light in the feedback loop. For early testing, light modulation tests with a fiber link using Li-Niobate modulators and a data generation and error checking chip are done at 1Gb/s. Many companies and universities are developing modulators which will be incorporated into CMOS chips. We are doing radiation hardness studies for one of the materials involved. Laser light will need to be steered on to and kept centered on the detector in the presence of thermal or mechanical motion, etc. This steering will be controlled by MEMS mirrors. Polycrystalline and crystalline silicon based mirror designs are being studied. We review the current status of the project and outline plans for the future development of the system.