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The main difference between OWC and FSO lies in the implementation and practical part. Talking about OWC, this technology is important for breaching the digital bottleneck. One of the ways around this bottleneck is via alternate transmission routes. You can set up alternate network links and transmit from building to building; without the need to tear-up streets to install underground optical cables. It’s also a perfect fit in dense urban areas, where large buildings (each with many customers) interconnect.
On the Other hand free space optics or Free-space point-to-point optical links can be implemented using infrared laser light, although low-data-rate communication over short distances is possible using LEDs. Infrared Data Association (IrDA) technology is a very simple form of free-space optical communications. On the communications side the FSO technology is considered as a part of the Optical Wireless Communications applications. Free-space optics can be used for communications between spacecraft, but this has not been put into practice.

I hope this is helpful.
Thanks

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