In accordance with the invention, an optical communication system is provided with one or more automatic dispersion compensation modules. Each module has an adjustable dispersion element, a data integrity monitor and a feedback network whereby the monitor adjusts the dispersion element to optimize system performance. In a preferred embodiment the dispersion compensating modules comprise chirped fiber Bragg gratings in which the chirp is induced in the grating by passing a current along distributed thin film heaters deposited along the length of the fiber. The magnitude of the applied current determines the dispersion of the grating. A data integrity monitor is configured to sense the integrity of transmitted data and to provide electrical feedback for controlling the current applied to the grating.