Nonlinear Polarization Evolution on the Time Scale of a Single Bit Period in a Fiber-Optic Transmission Line

We observe a power dependent evolution in the state of polarization of a transmitted channel in a WDM system with five 10 Gbit/s channels. The changes occur on the time scale of a single bit period and cannot be compensated easily through polarization-tracking. When a polarization-sensitive receiver is used to improve adjacent channel rejection, a significant reduction in the power margin of the system is found. Experimental evidence suggests that cross-phase modulation from adjacent channels is responsible for this phenomenon.