This chapter presents the processing of digital signals using higher-order spectral techniques [1,2,3,4] to evaluate the performance of a coherent transmission system, especially the bispectrum method in which the signal distribution in the frequency domain is obtained in a plane. The cross correlation as well as the signals themselves can be spacially identified. Thence evaluation of impairments and distortion can be evaluated, and the sources of causes and so on can be determined. Although equalization has not been described here in this chapter, the techniques for equalization using a higher-order spectrum can be found in Refs. [1,2,3].