In this paper, a novel dual-polarization differential quadrature phase shift keying (DQPSK) system is proposed,
which does not need polarization de-multiplexing like the conventional polarization division multiplexing QPSK, but
bases on just one receiver. Its performance including the tolerance to chromatic dispersion (CD) and to polarization mode
dispersion (PMD) is analyzed. The result shows that the tolerance to CD and PMD of the novel system is nearly same to
that of DQPSK system with the same bit rate, but it can bring down the electrical signals rate at the transmitter.
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