Holey fibers with small-core dimensions relative to the optical wavelength and large air-filling fractions offer tight mode confinement and are therefore attractive for highly nonlinear fiber applications. We investigated the role of confinement loss in these small-core fibers to optimize the design of practical highly nonlinear fibers. We found that silica holey fibers can exhibit effective nonlinearities as great as 52 W-1 km-1 and that the confinement loss can be less than the losses of standard fiber types. We show that the dispersive properties of some of the designs are suitable for a range of device applications.
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