  Orthogonal frequency division multiplexing (OFDM) has proven itself as an
effective multi-carrier digital communication technique. In recent years the
interest in optical OFDM has grown significantly, due to its spectral
efficiency and inherent resilience to frequency-selective channels and to
narrowband interference. For these reasons it is currently considered to be one
of the leading candidates for deployment in short fiber links such as the ones
intended for inter-data-center communications. In this paper we present a new
power-efficient symbol recovery scheme for dc-biased optical OFDM (DCO-OFDM) in
an intensity-modulation direct-detection (IM/DD) system. We introduce an
alternative method for clipping in order to maintain a non-negative real-valued
signal and still preserve information, which is lost when using clipping, and
propose an iterative detection algorithm for this method. A reduction of $50\%$
in the transmitted optical power along with an increase of signal-independent
noise immunity (gaining $3$[dB] in SNR), compared to traditional DCO-OFDM with
a DC bias of $2$ standard deviations of the OFDM signal, is attained by our new
scheme for a symbol error rate (SER) of $10^{-3}$ in a QPSK constellation
additive white gaussian noise (AWGN) flat channel model.
