  The channel capacity of a nonlinear, dispersive fiber-optic link is
revisited. To this end, the popular Gaussian noise (GN) model is extended with
a parameter to account for the finite memory of realistic fiber channels. This
finite-memory model is harder to analyze mathematically but, in contrast to
previous models, it is valid also for nonstationary or heavy-tailed input
signals. For uncoded transmission and standard modulation formats, the new
model gives the same results as the regular GN model when the memory of the
channel is about 10 symbols or more. These results confirm previous results
that the GN model is accurate for uncoded transmission. However, when coding is
considered, the results obtained using the finite-memory model are very
different from those obtained by previous models, even when the channel memory
is large. In particular, the peaky behavior of the channel capacity, which has
been reported for numerous nonlinear channel models, appears to be an artifact
of applying models derived for independent input in a coded (i.e., dependent)
scenario.
