  We demonstrate a polarization-managed 8-dimensional modulation format that is
time domain coded to reduce inter-channel nonlinearity. Simulation results show
a 2.33 dB improvement in maximum net system margin (NSM) relative to
polarization multiplexed (PM)-BPSK, and a 1.0 dB improvement relative to time
interleaved return to zero (RZ)-PM-BPSK, for a five channel fill propagating on
20x80 km spans of 90% compensated ELEAF. In contrast to the other modulations
considered, the new 8-dimentional (8D) format has negligible sensitivity to the
polarization states of the neighboring channels. Laboratory results from
High-density WDM (HD-WDM) propagation experiments on a 5000 km
dispersion-managed link show a 1 dB improvement in net system margin relative
to PM-BPSK.
