Motivated by the recent emergence of ultra-high speed (e.g., 100Gb/s) optical networks, some researchers have recently started the study of optical encryption techniques that offer secrecy of information transfer over such networks. Despite significant attention to this problem, we are not aware of attempts made to define a formal cryptographic model for the study of such schemes. In this paper we fill this gap by proposing a formal model for the investigation of symmetric encryption with Shannon secrecy over a specific type of optical networks frequently studied in the related literature, where the security is imparted through all-optical signal processing. This model is then used to formally prove the Shannon secrecy of a construction obtained by carefully combining and improving ideas appeared in the optical network literature. In our construction the key stream rate is the same as the data stream rate, which is optimal for this level of security.