the invention related to the system and method for optical communication using light of two polarization states . polarization distortion loss is compensated by implementation of polarization controllers at both the transmitter and receiver sides . the transmitter controller performs a mixing transformation of beam with two polarizations , while the receiver controller performs the same transformation in the opposite direction with exactly same sequence as in the transmitter part . a cross scrambling and a polarization rotation represented by matrix multiplication are examples of such mixing polarization transformations . the averaged pdl induced errors are corrected by the fec code plus interleavers .