Coherent detection with digital signal processing (DSP) significantly changes the ways impairments are managed in optical communication systems. In this paper, we review the recent advances in understanding the impact of fiber nonlinearities, polarization-mode dispersion (PMD), and polarization-dependent loss (PDL) in coherent optical communication systems. We first discuss nonlinear transmission performance of three coherent optical communication systems, homogeneous polarization-division-multiplexed (PDM) quadrature-phase-shift-keying (QPSK), hybrid PDM-QPSK and on/off keying (OOK), and PDM 16-ary quadrature-amplitude modulation (QAM) systems. We show that while the dominant nonlinear effects in coherent optical communication systems without optical dispersion compensators (ODCs) are intra-channel nonlinearities, the dominant nonlinear effects in dispersion-managed (DM) systems with inline dispersion compensation fiber (DCF) are different when different modulation formats are used. In DM coherent optical communication systems using modulation formats of constant amplitude, the dominant nonlinear effect is nonlinear polarization scattering induced by cross-polarization modulation (XPolM), whereas when modulation formats of non-constant amplitude are used, the impact of inter-channel cross-phase modulation (XPM) is much larger than XPolM. We then describe the effects of PMD and PDL in coherent systems. We show that although in principle PMD can be completely compensated in a coherent optical receiver, a real coherent receiver has limited tolerance to PMD due to hardware limitations. Two PDL models used to evaluate PDL impairments are discussed. We find that a simple lumped model significantly over-estimates PDL impairments and show that a distributed model has to be used in order to accurately evaluate PDL impairments. Finally, we apply system outage considerations to coherent systems, taking into account the statistics of polarization effects in fiber.
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