This paper describes the operation of a new type of fiber optic local area network (LAN) that has most of the advantages of both the contention and token systems. The new system, called PRENET, is basically a contention system; it has no collisions, no message size or cable length limitations, and no stability problems. It can be loaded up to 80-85 percent of its bus capacity and it has bounded delays. The PRENET system has active stations and can be operated with two or four fiber optic cables. When operating with four cables the advantage of PRENET over other networks is its robustness against station failures and open-cable problems. The PRENET system uses a new media-access protocol called Preemptive Contention. It is shown that with this new protocol a packet- or station-based priority scheme can be readily included in the operation of the system. The computer simulation of a two cable system using the Preemptive Contention protocol is also presented. It is shown that for such a system operating at 2 Mbits/s with 80 percent bus utilization the mean waiting time is under 1 ms. It is also shown that the waiting time of a four-cable PRENET system is still smaller. It is pointed out that the new media-access protocol of the PRENET simplifies the behavior of this contention system to one that can be approximately predicted using an M/D/1 queueing model with batch arrivals.