This paper is directed at the analysis of the basic operating principles, design, operation, and performance of a different type of optical modulator, capable of large phase modulation through the change of the optical index of refraction. This is achieved by modification of waveguide boundary conditions by incorporating quantum wells that can be charged or emptied of electrons at the planar dielectric waveguide boundaries, by application of gate voltages. Such an unconventional way of achieving the desired modifications in the optical refractive index will provide attractive alternative and more versatility than the conventional means of realizing such modifications, such as electro-optical effects (electroabsorption, Franz- Keldysh effect, optical birefringence), carrier induced effects (band filling, band gap renormalization), and free carrier absorption (plasma effect). Furthermore, the technology (e.g. molecular beam epitaxy, metalorganic chemical vapor deposition, ion beam etching, and other micro machining techniques) of fabrication of these new devices is already in place, so the proposed concept can be tested to facilitate further development. Based on these projections, we propose a planar-based dielectric waveguide having confined electrons in quantum wells at the boundaries. Microstructure devices made from semiconductors, e.g. CoSi2 or GaAs/Ga1-xAlxAs, are the most practically fabricated in the form of planar structures. Moreover, it is well adapted for various gate electrode geometries for activation and control of the quantum wells.