We theoretically analyze the performance of longhaul multichannel optical communication systems based on an integrated WDM power level compensator. By placing an array of Er/sup 3+/-Yb/sup 3+/ co-doped silica waveguides in parallel between a demultiplexer/multiplexer pair and preceeding it by an EDFA, we demonstrate the possibility of transmitting eight unequally spaced WDM channels over long distances, without electronic regenerators and using span lengths as high as 50 km. This technique allows substantial reduction of both four-wave mixing crosstalk and gain peaking.