neous power of the signal according to the Schrodinger’s equation [8]. It is shown in Fig. 2 that the PAPR performance of the DFT-spread OFDM signal is better than both the clipped and unclipped OFDM signals. This means that for a given average transmit power, the peak power of both the clipped and unclipped OFDM signals will be larger than that of the DFT-spread OFDM signals; and hence they are more susceptible to nonlinear distortion than the DFT-spread OFDM signals. On the other hand, various effective nonlinear impairment compensation methods have been proposed [9]. Hence one can envision that if these techniques are applied to the system, only linear channel distortion needs to be considered, under which we have shown the DFT-spread OFDM offers better BER performance than the clipped OFDM. We have considered the optical DFT-spread OFDM system with polariza- tion division multiplexing and coherent detection. Compared with the con- ventional single-carrier systems, the DFT-spread OFDM system has the ad- vantages of flexible bandwidth allocation, high spectral efficiency and low sampling rate, and low-complexity equalization. Compared with the opti- cal OFDM system with amplitude clipping, the DFT-spread OFDM system offers both better BER performance and a much lower PAPR, with little attendant increase in the transceiver complexity. 5 Conclusions 10