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A technique for optical pre-or postdistortion in order to compensate for fiber dispersion is discussed theoretically. The dispersion compensation device is based on differential time delay for the upper and the lower sideband of the modulated signal. The proposed scheme is primarily intended for high bit rate (> 10 GbiUs) time division multiplexed transmission, and in an ideal case the transmitting distance could be enhanced by a factor of 4 in a dispersive limited system. With more realistic demands on the dispersion compensation device, the gained distance is in the order of 2.5.

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