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We propose and analyze a higher order polarization mode dispersion (PMD) compensator using a fixed differential group delay (DGD) section followed by a variable section. The performance limits of various PMD compensators are quantified and compared using dynamic PMD tracking. Compared with existing compensators with a single fixed DGD, the proposed compensator improves an nonreturn-to-zero 10-Gb/s link tolerance to average PMD from 28 to 44 ps. Alternatively, the tolerance increases to only 36 ps using a compensator with two fixed-DGD sections.