As for what you have asked about the type of light source to use, the coherent light from laser would definitely be the best choice. However, because SAC-OCDMA systems are used in some applications such as Fiber-to-the-Home as a low-cost solution, sometimes LEDs are used as a cheaper light source along with FEC schemes to reduce the costs. The paper “A Comparison of Optical Sources for Spectral
Amplitude Coding OCDMA” which could be found easily by google makes comparisons between the two, but I guess the above explanation would suffice.