Today's dense wavelength division multiplexed (DWDM) (ILs), and arrayed waveguide grating (AWG) multiplexers and demultiplexers, support channel routing in several different directions, yielding so-called multidegree mesh ROADM. Transparently transporting high capacity DWDM channels through such an optical network is a challenge due to several physical impairments that are associated with the approach, and investigations are being continuously pursued to enhance the overall system performance.In this paper, we address the challenges in supporting 40 Gb/s at high SE by examining two promising modulation formats, namely, differential binary and quadrature phase shift keying (DBPSK and DQPSK). We examine the performance of the format under three typical physical impairments that are commonly encountered in transparent optical networks, namely, successive optical filtering at ROADM sites, coherent crosstalk originating at ROADMs, and polarization mode dispersion (PMD). We cover two types of ROADM architectures that are currently deployed, namely, a symmetric bandwidth allocated 50 GHz