Abstract-A novel multilevel coherent optical system is proposed. It is based on the exploitation of the property that the electromagnetic field propagating in a single-mode optical fiber can be represented by a four-dimensional vector whose components are the phase and quad- rature terms of the two polarization components of the electrical field. This allows a wider use of the resources of the electromagnetic field for information transmission so to obtain a spectrally efficient modulation format with a limited penalty. The different states of the transmitted field can be viewed as points in a four-dimension Euclidean space whose positions are optimized so to minimize the bit-error probability. The polarization state fluctua- tions due to conventional single-mode fiber propagation are compen- sated by means of a pure electronic algorithm allowing the state of polarization of the transmitted field to be recovered without additional optical processing. The net performance gain with respect
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