The exponential growth in the rate at which information can be communicated
through an optical fibre is a key element in the 'information revolution'.
However, as for all exponential growth laws, physical limits must be consi
dered. The nonlinear nature of the propagation of light in optical fibre ha
s made these limits difficult to elucidate. Here we use a key simplificatio
n to investigate the theoretical limits to the information capacity of an o
ptical fibre arising from these nonlinearities. The success of our approach
lies in relating the nonlinear channel to a linear channel with multiplica
tive noise, for which we are able to obtain analytical results. In fundamen
tal distinction to linear channels with additive noise, the capacity of a n
onlinear channel does not grow indefinitely with increasing signal power, b
ut has a maximal value. The ideas presented here may have broader implicati
ons for other nonlinear information channels, such as those involved in sen
sory transduction in neurobiology. These have been often examined using add
itive noise linear channel models(1) but, as we show here, nonlinearities c
an change the picture qualitatively.