We propose and analyze a promising surface-normal optical modulator for use in optical interconnects. The device is based on n-AlGaAs materials, operating with red light, and is therefore fully compatible with silicon photodetectors. The operation principle is based on current-induced electron heating, with redistribution of carriers between conduction band valleys playing a significant part. Calculations predict efficient absorption modulation with operating voltages <1 V and switching times of units of picoseconds.