Optical impairments such as dispersion and fibre nonlinearity are compensated by generating a pre-distorted electrical signal at the transmitter. This signal is modulated onto a carrier signal, so that it is upconverted in frequency. This up converted signal is then used to modulate an optical source. Generally the optical signal will have two sidebands, one of which has the correctly pre-distorted information and the other which is unwanted. Information in the unwanted optical sideband is either filtered optically or electrically. In the preferred embodiments, the transmitter uses a tunable semiconductor laser with an integrated electroabsorption modulator to modulate the light. The preferred receiver is a coherent receiver with a tunable local oscillator laser. The receiver uses an electrical filter to remove the information in the unwanted sideband.