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Several optical modulation and detection schemes are compared by computing their spectral efficiencies over additive white Gaussian noise channels. The bandwidth savings of differential quadrature phase-shift keying (D-QPSK) over both direct-detection on-off keying and differential binary phase-shift keying suggest that D-QPSK can improve the reach and efficiency of wavelength-division multiplexing systems. To test the theory, Reed-Solomon and low-density parity-check forward error correction codes are designed and evaluated. The codes generally behave as expected, except that for D-QPSK the gains are hampered by the differential detector. It is further shown that neither multiple-symbol differential detection nor decision-feedback detection is attractive when using strong codes.