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The finite electrical bandwidth of digital coherent transceivers together with limited wavelength division multiplexing (WDM) channel spacing constrains the maximum forward error correction (FEC) overhead that can be advantageously applied to fiber optic transmission systems. We investigate through simulations of a 100 GbE system employing coherent polarization division multiplexed quaternary phase shift keying, the impact of these bandwidth constraints on the optimal code rate thereby minimizing the required optical signal-to-noise ratio (OSNR) at the receiver. The optimum FEC overhead is found to increase linearly with available bandwidth and the required OSNR is found to reduce for lower order transponder filters. Fabrication of transmitters with a broader spectral response than their receiver counterpart is found to be advantageous. The optimum electrical bandwidth is found to be approximately half the WDM channel spacing for nonreturn to zero (NRZ) transmission and slightly less for return to zero (RZ). There is shown to be no performance advantage in using RZ over NRZ modulation formats when the optimum FEC overhead and filter bandwidth is employed in each case. Nonlinear simulations demonstrate that transpacific transmission is attainable with a margin that increases as the spectral efficiency is relaxed.