  We propose using a nonlinear phase shift interferometric converter (NPSIC) (a
new device) for lumped compensation of the nonlinearity in optical fibers. The
NPSIC is a nonlinear analog of the Mach-Zehnder interferometer and provides a
way to control the sign of the nonlinear phase shift. We investigate a
potential use of NPSIC for compensation of the nonlinearity to make a
dispersion-managed system closer to an ideal linear system. More importantly
NPSIC can be used to essentially improve single channel capacity in the
nonlinear regime.
