The dispersion compensation characteristics of the chirped fiber grating (CFG) for different dispersion compensation positions are analyzed in externally modulated cable television (CATV) lightwave system and the analytic expression of the composite second order (CSO) distortion is derived. The analyses give a reasonable explanation for the position-dependent effect of CFG dispersion compensator, which was found in practical systems. Moreover, the theoretical result is also verified by an experiment. It is believed that the theory will be helpful in designing optical CATV fiber links with nodes at proper positions both for intensity amplification and dispersion compensation.