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Polarization-mode dispersion (PMD) prevents the cost-effective upgrading of fiber networks to 40 and sometimes even to 10 Gbit/s. This paper reviews recent progress in its mitigation and compensation and points out where more research is needed. Electronic PMD mitigation is preferable at 10 Gbit/s, due to its low cost, even though it is accompanied by a considerable residual penalty. A lot of work takes place in the field of optical PMD compensation. Among the numerous detection methods for first-order PMD, we prefer a purely electronic, hence low-cost, arrival time detection method, with a linear readout and ps-sensitivity. Surprisingly, the most easily detectable higher order of PMD is the third order, indicated by a slope steepness difference. Both methods rely on a polarization scrambler at the transmitter side, which can be shared. Regarding PMD compensators, LiNbO3 devices are probably needed to guarantee a sufficient speed. A distributed PMD compensator allows to integrate a number of polarization transformers and differential group delay sections on one chip, thereby exactly emulating the way how the fiber accumulates, but in reverse order and orientation. We report on progress in using these devices, including their use for PMD compensation in a 40-Gbit/s carrier-suppressed return-to-zero differential phase-shift keying experiment. More work is needed to perfection the device, and to implement a fast endless polarization control. The theory of the distributed PMD compensator lends itself to a new definition of higher order PMD by a Fourier expansion of mode conversion, as an alternative to the familiar Taylor expansion of the PMD vector.