Progress toward 40-Gb/s polarization-mode dispersion (PMD) compensation is presented in several areas. A single-waveplate polarization scrambler that generates Stokes' parameters with just three harmonics has been realized. Together with an arrival-time detection scheme, it allows the detection of about 1 ps of PMD within 2.4 µs in a 40-Gb/s nonreturn-to-zero transmission setup. A scrambler that operates independent of its input polarization has also been realized. Both scramblers can be shared among a number of wavelength-division-multiplexed (WDM) channels for which PMD is to be detected. Furthermore, an inverse scattering technique has been implemented to determine differential group-delay profiles of an improved distributed PMD compensator in X-cut, Y-propagation LiNbO3 . In this context, the most common kind of higher order PMD is identified,which typically persists after compensation of first-order PMD. In a fiber link with polarization scrambling, it is shown to be measurable in a most efficient manner by comparing the rising and falling slopes of the detected signal using two oppositely poled one-way rectifiers placed at the output of a differentiator.
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