Nonlinear frequency division multiplexing (NFDM) techniques encode information in the so called nonlinear spectrum which is obtained from the nonlinear Fourier transform (NFT) of a signal. NFDM techniques so far have been applied to the nonlinear Schrodinger equation (NLSE) that models signal propagation in a lossless fiber. Conventionally, the true lossy NLSE is approximated by a lossless NLSE using the path-average approach which makes the propagation model suitable for NFDM. The error of the path-average approximation depends strongly on signal power, bandwidth, and the span length. It can degrade the performance of NFDM systems and imposes challenges on designing high data rate NFDM systems. Previously, we proposed the idea of using dispersion decreasing fiber (DDF) for NFDM systems. These DDFs can be modeled by a NLSE with varying-parameters that can be solved with a specialized NFT without approximation errors. We have shown in simulations that complete nonlinearity mitigation can be achieved in lossy fibers by designing an NFDM system with DDF if a properly adapted NFT is used. We reported performance gains by avoiding the aforementioned path-average error in an NFDM system by modulating the discrete part of the nonlinear spectrum. In this article, we extend the proposed idea to the modulation of continuous spectrum. We compare the performance of NFDM systems designed with dispersion decreasing fiber to that of systems designed with a standard fiber with path-average model. Next to the conventional path-average model, we furthermore compare the proposed system with an optimized path-average model in which amplifier locations can be adapted. We quantify the improvement in the performance of NFDM systems that use DDF through numerical simulations.
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